Uber mission statement & V.A.R.S analysis

TO:  Mr. Dara Khosrowshahi, CEO of Uber

FROM: Ibrahim AbdelMoteleb, Coursera student

DATE: May 16, 2020

SUBJECT: Uber mission statement

 Researches have shown that mission statements have a very strong impact on an organization’s success. The presence of a mission statement helps the organization to clearly communicate the reason of its existence and what it is doing to its stakeholders, it acts as a great tool to inspire employees and to make them believe that they are a part of something bigger which motivates them and helps them reach higher potentials, and it is supposed to subtly represent the organization’s core values which acts as a reference point for future disputes.

 Mission statement

My suggestion for the mission statement is “Uber’s mission is to become the world’s number one personal transport option by offering safe and timely rides at high availability”.

I believe that this mission statement covers the four criteria for a good mission statement.

It emphasizes the creation of a value which are the safe rides with high availability which is crucial in this era.

 It focuses on the need which is the personal transport in whichever form it takes (Uber business, Uber X, Uber Black, etc)

It is achievable and it is short and memorable

TO:  Mr. Dara Khosrowshahi, CEO of Uber

FROM: Ibrahim AbdelMoteleb, Coursera student

DATE: May 16, 2020

SUBJECT: Uber business model

 Researchers have shown that companies that focus on business model innovation have had very large increases in profitability. It also provides companies with a clear vision of how their organization functions, and it can help figuring out new business opportunities and threats.

Business model innovation became a competition as organizations now try to come up with new and better business models that satisfy the same consumer’s needs. We have seen it with several giant organizations that went out of business due to a better business model such as the case of Blockbuster and Netflix.

 Business Model

I will provide my analysis of Uber’s business model through a framework named VARS that consists of four key elements that together compromises a business model:

V:  value proposition delivered by the model

A: activities, resources, and capabilities needed to implement the business model (ARC)

R: realization of value

S: scope of the organization which entails which consumers segments are served, what products or services does the organization provides (horizontal scope), and the organization’s value chain (vertical scope)

I believe that Uber’s business model has to be taken from two sides: one is the rider’s side and one is the captain’s side. As these two sides act as a client for Uber, they both directly or indirectly provide revenue for Uber.

Starting with Uber’s value proposition for passengers:

Safety: one of the most critical reasons for Uber’s success is safety as it provides several details about the car’s owner and the ride can be tracked by you or someone else. It made Uber a high-ranking choice for tourists.

Availability: Uber was created because Travis Kalanick and Garrett Camp couldn’t find a ride. Uber now offers ride timely rides with high availability. Just a click of a button, GPS tracks your location and orders the closest ride to you based on complex algorithms (No more exhausting attempt trying to describe where you are)

ETA for arrival and ETA for pickup: this helps a lot in scheduling your day.

Upfront pricing: helps in calculating expenses.

Lower prices: in general it’s cheaper than taxis especially with UberPool.

Pay however you want: cash or credit.

Drivers don’t expect tips.

For drivers:

Work flexibility: Work whenever you want and as long as you want. Also, no boss!

Easy to get started.

Extra income.

Ease to access more passengers: limousine rental service can now use their cars in idle time.

Activities Resources Capabilities:

Political activities: Uber has suffered from Government intervention and regulation in almost all countries as it is a new concept that no country has a law for. Uber needs to communicate with Government and authorities to reach a deal.

Marketing: Uber needs to attract both riders and drivers as it cannot function without any of them.

Advancement in technology: this is a resource that Uber doesn’t own, but it heavily affects the business model. The high availability of smartphones and mobile internet made Uber more accessible to a larger segment of customers. The wide coverage of the mobile. The precision of GPS.

Uber must also invest in its technology team to be able to augment its service and be able to earn from the data it collects.

Uber’s algorithm and data.

Customer support: for both drivers and riders.

Skilled and friendly drivers: I believe that the drivers are Uber’s ambassadors, they are the client’s first experience. If they are good, Uber wins a customer. If they are bad, Uber loses a customer.

Revenue model:

Ride transaction fees

Surge pricing:  everyone actually wins from this. Driver: more money, riders: quicker ride instead of long waiting time, and Uber from the higher ride price.

Other services: such as UberWORK UberCARGO, UberEATS, etc

Cancellation fees:

Scope:

Customer segments: Anyone with a smartphone.

Drivers: anyone with a car who needs extra income, people who love to drive, people looking for a flexible work schedule.

Riders: people who need premium rides, people who don’t own a car, people who need an affordable ride (Uberpool)

Horizontal scope: more than 85 countries. All of Uber services (work, elevate, freight, eats, etc)

Vertical scope: Uber outsources software and web services such as GPS data service, mapping, data storage, etc