Uber Strategy

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| | [uber] – HOW A TECHNOLOGY FIRM IS changing the traditional transportation model | | By Mark Boeckel, Brent Sprunger, Kevin Smith, and Emily WorkMarch 6th, 2012 | Executive Summary Uber is an App-Powered on-demand car service provider for smart phones. Notwithstanding its very unique name, investors have begun to take note of Uber during the past year as it has stolen market share from traditional transportation companies. We will analyze the value proposition of its technology and examine the differentiation Uber creates to stay ahead of both potential competition and the various cab laws and regulations across the United States and Europe. Based upon this analysis, we will provide detail to investors about…show more content…
Uber is a software company and does not own any of the cars which transport Uber customers. Instead, Uber has negotiated contracts with drivers and takes 25 percent of the fare. The initial launch city was San Francisco in 2010 and Kalanick has been busy raising capital ever since. Kalanick and co-founder Garrett Camp invested $200,000 as seed money, followed by $1.25 million in angel capital by First Round Capital, an $11 million Series A round led by Benchmark Capital, Founder Collective and First Round Capital, and finally $32 million Series B with Menlo Ventures, Jeff Bezos, Goldman Sachs and Benchmark in December 2011. As of March 2012, Uber service was available in Chicago, New York, Boston, San Francisco, Paris, Seattle and Washington D.C. The firm was also conducting test services in Los Angeles and Toronto. Upon a launch, Uber benefits from various means of social media such as Twitter and Facebook, as users share their experiences. As a result, the firm has experienced rapid user proliferation of 30-40% per month. Pricing & Experience Uber has three main pricing structures; fixed airport rates, standard fees which include a per mile/minute charge, and dynamic pricing. For example, the fixed airport fee from downtown Chicago to Midway is $65 and $75 to O’Hare, slightly less than two times that of cabs. This pricing structure does not differ much from other car

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