Uber SWOT Analysis 2021: Detailed Overview

Uber is probably the biggest “start-up” that has managed to have an impact on our daily lives in the past 5 years. Today we are going to perform a SWOT Analysis on Uber and go over all the company’s details.

Uber Strengths 2021:

  • One of Uber’s bigger strengths is the huge brand name it has created. They are essentially the synonym of ride-sharing. They are the benchmark to which every similar company is compared to. They are already offering their services to more than 50 countries and growing. They are the biggest company in the ride-sharing market with more than 80 million active users.
  • Lower prices compared to all other transportation services. This was Uber’s key strength when it was originally launched, and still is the company’s ace. Customers usually have to pay double or even triple the amount depending on the city, the time of the day, etc for the same route when using a taxi. Not only that, but they have to wait even longer for the taxi to arrive.
  • Pricing methodology. Uber has managed to keep the drivers happy by utilizing a system where the price of a route changes based upon the demand. When a driver is working Saturday night shifts, the price of each trip he completes is going to be significantly higher.
  • Finally, Uber riders have the ability to rate their trip and the driver. This ensures that the service is always top-notch as drivers are always trying to improve their ratings.

Uber Weaknesses 2021:

  • The competition is rising as the concept of the app is pretty simple. There are no huge start-up costs like owning a car fleet or operating stations. 
  • Drivers are not very happy with their earnings. In some cases, the operating costs they have to cover are so high that the room for profit is minimal.
  • Uber is heavily dependent on its drivers. They are essentially Uber’s brand ambassadors 24/7. However, their behavior is unpredictable and the company’s image is hurt every time a new story reaches the news. Many drivers have been accused of harassment and abuse.
  • Finally, Uber is heavily dependent on the internet. Combined with all the other unpredictable variables, the whole business model is of questionable longevity. Investors can’t be reassured that the company won’t be surpassed by another competitor next month or next year.

Uber Opportunities 2021:

  • One of the biggest edges Uber has over the normal taxi and transportation services is the shorter waiting times. By utilizing even more drivers, they can double down on their strength and further minimize waiting times.
  • They can incentivize the use of lower operational cost vehicles. Thus, increasing the profitability of the drivers and keeping them happy. 
  • Uber can also expand into the markets of developing countries like Asia and India.
  • The could also diversify their offers by niching down to new sub-categories of transportation.
  • A good example could be the transportation of animals and pets.

Uber Threats 2021:

  • The biggest threat to Uber is the changing laws and regulations of every country. A simple change in the law can ban Uber from operating in the whole country.
  • At the same time, the communities of traditional taxis are pushing heavily on the enforcement of some type of regulation. They can’t compete with Uber in terms of pricing.
  • The dissatisfied drivers are a big threat as they join forces and file lawsuits against the company. Leading to monetary losses and damaged brand image at the same time.
  • Finally the fierce competition is starting to catch up. Riders and drivers have an ever increasing choice of platforms to use, which eventually lowers the prices. Uber has to strive in order to continue to be competitive and hold and edge amongst the other platforms.
  • The sudden increase on demand after the pandemic and the 2021 lockdowns has found Uber with a shortage of available drivers. As a results, the price for fairs has gone up noticeably. As a result customers are looking for alternative ways to commute.
  • If Proposition 22 won’t remain in effect, Uber and other ride-sharing apps might have to pay back billions of dollars in benefits, sick leave and benefits. The drivers would no longer be classified as contractors, but employees.

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