Uber: Current Situation and Corporate Governance

Uber Case Analysis
Uber Case Analysis
Uber is among the startups in the past five years that have instilled notable impacts in people's daily lives. The emergence of Uber in transportation has revitalized the industry. More people are motivated by the swift influx of technology in that industry longed for operational efficiency. With Uber, movement from one point to another has attracted a new dimension, a dimension that attracts innovation and competition. However, even amidst the impacts that it has created in the transportation industry, it is still worth exploring whether the organization is sustainable beyond its current success. This case analysis will explore Uber through the organization's key elements, including its current situation, corporate governance, external environment, and internal environment. The case analysis is vital in understanding Uber as a possible innovative startup that could change the future of transportation globally. 
Current Situation
Past Performance
Uber is ride-hailing application software that allows its subscribers to order private or shared car rides. The application has been successful, bearing its convenience compared to the traditional taxis and its lower prices. Uber's operations have been efficient, albeit with notable changes that could revitalize its success trajectory. The latest statistics indicate that Uber is present in 6 continents and over 700 cities (Insardi & Lorenzo, 2019). The company operates in three service portfolios and completes at least 14 billion trips each day. Uber has also paid $78 billion to its drivers. In the past five years, the growth of Uber has been significant, considering that it had 1 billion trips in 2016, 5 years after its launch. The increasing number of trips meant that Uber scaled faster to the market leadership of the industry. 
Uber's motivation to maintain market leadership is evident in its aggressive pursuance of the diversification strategy. Over the years, Uber has introduced prospects such as peer-to-peer rides through UberProp. The organization also introduced UberPool that allows its customers to share the rides. Ultimately, Uber also introduced luxury options such as Uber Copter that keep changing the organization's operational portfolio. The management at Uber is already focusing on various prospects. The advancements in 5G technology and the possible expansion of the internet of things have steered Uber into investing heavily in innovating driverless cars. Notably, while diversification gives Uber an avenue to strengthen its grip in the industry, the company faced challenges in 2020 with the emergence of the global COVID-19 pandemic. Uber recorded a $1.8 billion loss in the second quarter of 2020. The losses are explainable, and the organization intends to revitalize its position as the pandemic restrictions soften.
Strategic Posture
Uber operates within a defined strategic posture. The organization operates within a mission statement that intends to bring transportation to everyone everywhere. That mission statement is accompanied by Uber's intention to operate in almost every major city of the world with the lowest prices that the industry can offer (Insardi & Lorenzo, 2019). Uber also bears a vision statement that aims to make transportation as reliable as running water. Their noted motivation to invest in future transportation technology confirms their intent towards achieving the vision statement. To achieve its mission and vision statements, Uber has instilled policies that include operations within its resource limits. Uber also intends to be compliant with the laws that govern transportation in their operational settings. Some of the strategies that Uber has employed in its operations include diversification, innovation, and employment of talent to deliver futuristic outcomes. The application of the above strategies is evident in their innovations in smart rides and expansion of their operational base to accommodate most countries in the world. Uber's strategies are simple and smart, which leads to their pursuance of the organizational objectives.
Corporate Governance
Board of Directors
Uber's corporate governance is dependent on the efficiency of its board of directors. The board oversees the daily governance of the organization. The board also elects the chief executive officer. Currently, the Uber board of directors consists of 10 members. The board is chaired by Ronald Sugar, who was the former chairperson and CEO for Northrop Grumman. The other notable members of the board include Yasir Al-Rumayysn, the managing director of Saudi Arabia's public investment fund, Ursula Burns, the chairman and former CEO of VEON Dara Khosrowshahi, who is the current Uber CEO. The board also consists of partners and co-founders of Uber. The board's significant input was the change of voting rights following the scandals that faced the CEO. Still, the board remains the ultimate decision-making organ at Uber. 
Top Management
Uber's management structure is hierarchical with identifiable members of the top management. Remarkably, it is at the top management that corporate decisions are made. The top managers also oversee the strategic development in the organization. Top managers oversee operations in various key performance prospects of Uber. Currently, the top management at Uber consists of eleven members who are led by Dara Khosrowshahi, the CEO and the overall overseer of organizational operations. The top management also constitutes Nelson Chai, the chief financial officer, Tony West, the chief legal officer and the company secretary, Nikki, the chief people officer. And Andrew Macdonald, who is the senior vice president of mobility and business operations. The top management members include Pierre-Dimitri Gore-Coty, Sundeep Jain, Jill Hazelbaker, Bo Young, Raquel Sotil, Michael Strickman, Travis Freeman, and Janelle Sallenave. All the top managers above participate in the development of the competitive strategy besides playing vital roles in leading their departments. 
External Environment
Natural Environment
Uber affects just as much as it is affected by the natural environment. The union of concerned scientists indicates that Uber and Lyft rides bear 69% worse outcomes for the environment than the alternatives they replace (Sun, Ren, & Sun, 2020). That is because an overreliance on Uber and Lyft rides trigger more pollution than alternative rides. The impacts of Uber on the natural environment can be witnessed in how it affects the physical resources. Uber relies on physical resources such as roads that are degraded when overused. The other physical resources that the emergence of Uber has affected include storage, manufacturing resources, and factory facilities that have faced revitalizations due to the technological changes. The ride share industry also affects the climate. It is estimated that Uber and Lyft contribute to 5.5-12.5 tons of greenhouse gases in the atmosphere, which is a significant contribution to climate change/global warming (Chan & Humphreys, 2018). It is worth remarking that industry leaders such as Lyft and Uber, like most motor vehicle service platforms, rely on fossil fuel energy that is known to affect the climate through greenhouse gas emissions. Ultimately, with climate change and the degradation of physical and natural resources, wildlife is affected. Life in the wild demands a continuous supply of fresh water and other foods, something that can barely be sustainable with a continued depletion of the ozone layer. Overall, the ride share industry is presently bearing some serious adverse impacts on the natural environment. 
Societal Environment
The impacts of Uber in the societal environment are visible in various aspects. Primarily, Uber bears notable economic impacts. The transportation industry has changed to be more efficient with the influx of Uber rides (Chan & Humphreys, 2018). The efficiency on the roads combined with low traveling costs makes Uber quite economical in its usage. It is also worth noting that transportation and activities in the transportation industry, as initiated by Uber, such as the employment of drivers, create new revenue sources. Uber operates in a sharing economy, which means that prospects such as intellectual and physical resources are shared. In this industry, Uber's growth has been exponential. However, the company has been faced with economic challenges, especially bans, on the basis of unfair competition like in Italy, Germany, and Bulgaria. There is also an increasing debate on whether this type of economy creates career opportunities. Bearing the rate of growth that Uber has experienced, there is economic potential for this market. There are also political and legal prospects that have affected Uber. Bearing their unique operational strategy that focused on low costs, Uber faced resistance in almost every market in which they ventured. Countries such as Germany and Italy have proceeded to ban Uber based on the legality of their competitiveness. Ultimately, Uber has affected the sociocultural environment significantly. People are dissociating from traditional transport platforms and are adopting new technologies. With such changes come new perceptions and interactive cultural avenues. Take, for instance, gender equality; Uber applications give both men and women an equal opportunity in the competitive workplace environment. The changes are sounder in the U.S. where, in Massachusetts, 7000 out of 20000 RSS drivers are women. It is possible that Uber will bear even more sociocultural impacts in society if its growth continues at the present pace.
Task Environment
Uber's growth in the transport industry has come with significant changes in its task environment. Primary among the changes is the threat of new entrants. The industry has attracted more transportation applications, some of which are coming at even lower prices (Chan & Humphreys, 2018). Consequently, more power has been invested in buyers who are subjected to a variety of choices. In the industry, the buyers have the power to dictate prices. There are no switching costs, and a range of competitors are developing. It is also worth remarking that the threat of substitute products, like Easy Taxi, Gett, and Free Now, keeps increasing as the industry becomes more attractive to new entrants. Some of the substitute products like Free Now are as much as 20% cheaper than Uber. That also enhances the power of suppliers, such as software developers and software engineers, who can direct their services to a wider competitive environment. The other notable change in the task environment is the increased rivalry as competition increases, and potential new entrants threaten their influx. The other stakeholders, including governments, have taken the opportunity of the changes to instill their legal power to benefit from the changing transportation industry. Countries such as Hungary, Canada, and Denmark have consistently changed their laws to frustrate the growth of Uber.
EFAS
External Factors

Weight

Rating

Weighted Score

Comments

Opportunities





New niche markets are yet to be explored.

0.15

3.0

0.45


Advantage of a sharing economy.

0.12

5.0

0.6

Uber taking full advantage.

Leverage its unlimited number of vehicles.

0.14

5.0

0.7

Increase of active customers.

Threats





Pollution and degradation of the climate.

0.1

1.0

0.1

No notable response from Uber yet.

Barriers of entry and bans.

0.15

2.0

0.3

These continue to increase globally.

Fierce competition.

0.14

3.0

0.42

Continues to increase. Strength of brand maintains Uber's lead.

New entrants.

0.2

3.0

0.6

Many new entrants. Response happened through diversification.

Total Scores.

1.0


3.17


Internal Environment
Organizational Structure
The structure refers to the organization of different departments in a business outlet. Structuring occurs depending on the goals and objectives of the organization. Uber employs a matrix structure. A matrix structure is a mixture of divisional and functional structures where employees are grouped according to their areas of specialization while the top management still bears a significant overseeing role. At Uber, the top management plays a significant role in strategy development and implementation. However, it is the functional units that instill the innovation that the company demands its success. 
Organizational Culture
The corporate culture implies the climate within the operational environment of an organization. Business entities employ the corporate culture to define what they intend to engage and what they do not intend to engage (Wheelen, T. et al., 2018). At Uber, the culture is majorly adhocracy. Adhocracy is a dynamic and innovative culture that allows leaders to cooperate with employees to steer organizational goals. Uber has been a market leader in innovations, something that is primarily rooted in the collaboration between employees and the top managers.
Corporate Resources
Uber bears a unique strategy in using its corporate resources. The primary area of resource allocation is marketing. Being a technology-based company, Uber engages its customers and potential customers through new media outlets such as social media (Sun, Ren, & Sun, 2020). Uber also markets its products through its application software that gives it a platform to engage customers directly. Pricing has been one of Uber's strengths as it has approached a lower pricing strategy to attract more customers. Even with lower pricing, Uber still positions its services as a premium, especially if compared to the traditional taxis. In finance, Uber has invested heavily in creating an established brand. The organization has been profitable, especially in the past five years, culminating with a 26% growth in revenues in 2019 compared to 2018 (Sun, Ren, & Sun, 2020). Most of Uber's resources are directed to research and development. Uber is motivated to diversify for sustainability, something that it can only achieve through extensive innovation. The organization has also invested in human resources. With its motivation to be an innovation leader, Uber bears a steady pipeline of talent flow. The organization's H.R. is also culturally diversified to accord it the global view besides opening more innovative avenues. Ultimately, Uber depends on its information systems' efficiency to interact with its customers and continue growing. The information systems allow Uber to understand the needs of their customers and to innovate towards those needs.
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