Chapter 6, Problem 3SC

Summary Introduction

Case summary:

Company U is Multinational Transportation Network Company of Country U which provides ride sharing services by connecting the independent drivers with the help of an application. It understands its target markets and maintains a strong marketing mix.

The main reason for Company U application is popular because the users to contact the drivers near the area or surroundings. The business model takes an advantage of smartphone to connect with independent drivers and their cabs.

The target market of Company U is Millennials and Generation Z because of their interests, lifestyle and low interests on auto ownership. Company U operates its services in locally as well as it expands operations globally also.

It operates in an industry where trust between the strangers are important. The trust of comfortable and safety rides. Proper rating system helps to assure this trust and reliability.

Company U follows cost leadership for determining the prices and it also uses algorithm for estimating fees when the demand is high. It spreading awareness and creating buzz in the market to promote their brand and it faces the competition from Company O and Company L. It has widely popular among consumers and independent contractors.

To discuss: Reasons that consumers question Company U’s pricing strategy.