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CAPSTONE PROJECT UBER TECHNOLOGIES INC.
Capstone Project Uber Technologies Inc.
Student’s Name
Institutional Affiliation
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CAPSTONE PROJECT UBER TECHNOLOGIES INC.
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Contents
Executive Summary.........................................................................................................................3
Introduction......................................................................................................................................4
Problem statement.......................................................................................................................5
Industry Analysis Models................................................................................................................5
SWOT analysis............................................................................................................................5
PESTEL Analysis........................................................................................................................7
Porter’s Five Forces Analysis......................................................................................................8
VRIO Analysis.............................................................................................................................9
Company Analysis.........................................................................................................................10
SWOT analysis..........................................................................................................................10
PESTEL Analysis.......................................................................................................................11
Porter’s Five Forces...................................................................................................................12
VRIO Analysis Uber..................................................................................................................12
Social Benefits and Costs of Uber.................................................................................................13
Issue Analysis................................................................................................................................14
Leadership Considerations.............................................................................................................16
Ethical considerations....................................................................................................................17
Conclusions....................................................................................................................................17
Recommendations..........................................................................................................................17
Transparency..............................................................................................................................18
Embrace diversity......................................................................................................................18
Redefine company values..........................................................................................................18
References......................................................................................................................................19
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Executive Summary
The current project is aimed at analyzing the business context of Uber Technologies Inc. The
company has been facing challenges in its reputation from law suits and cases of sexual
harassment both at the corporate and employee level. As such, the project focuses on the
corporate culture issues that lead to the challenges that Uber faces today. Three business analysis
models are used to assess the company and include SWOT, PESTLE, VRIO, and Porter’s Five
Forces analysis. The project assesses the corporate culture issues faced by Uber Technologies
Inc. based on the models as well as past research on the company. In addition, the report
evaluates the leadership approach of the company and provides recommendations aimed at
improving the reputation and public image of Uber. The report concludes with the main issues
facing the company and provides substantive recommendations to deal with them.
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Introduction
Uber Technologies Inc. was founded in 2009 by Travis Kalanick and Garrett Camp under the
name Uber Cab. According to Mittendorf (2017), the company became a renowned unicorn
within the economy of “there is an app for that” at the start of 2015. It was swiftly adopted by the
consumers considering its ease of use, increasing product offerings, and an extensive geographic
reach. As a result, the company appealed to the investors due to its ability to disrupt industries
and its extraordinary development. The phenomenal development of the company was attributed
to Travis Kalanick and his ability to empower others, maintain flexibility, envision, and
anticipate. He was therefore responsible for the strategic direction of the company, managed its
resource portfolio, determined its ethical culture, and sustained its corporate culture. Mr.
Kalanick considered Uber as an opportunity for reducing the cost of black-car services by
introducing a mobile app. As such, the subscribers could download the app to their phones which
would then enable them to easily order a cab and meet the driver at a designated location.
Despite the fact that the service cost more than an ordinary cab, the ease it offered for the users
to request a cab through the click of a button made the company a major hit.
Travis and his team therefore saw the potential of the company and its capacity to rapidly
develop considering its initial success. The company therefore adopted a ‘hustle-based’ corporate
culture that involved implementing several controversial yet effective strategies that it would use
to forge ahead. The strategies included moving ahead of the competition at all costs in launching
its service offerings, combating the regulations that hindered the progress of the company, and
inspiring meritocracy at the workplace. Consequently, the strategies inspired rapid growth in the
company’s revenue and attracted the interests of different investors. However, despite the rapid
development and global expansion efforts, the company has faced a myriad of threats within the
past few years. Uber has had to come against increased competition, contentious cultural
practices, and international regulations have adversely impacted the company’s ability to expand.
These challenges also affected the finances of the company, with Uber reporting more than $3
billion in losses in 2016 alone (Calo & Rosenblat, 2017). Besides, Kalanick’s managerial
approach has been subject to increased criticism with his tactics being ethically questioned. His
managerial approach exposed the company to a fair share of scandals including various lawsuits
and legal fines. These outcomes have had detrimental impact on the image of the company and
resulted in Kalanick’s resignation and consequent replacement by Dara Khosrowshahi in 2017.
The company’s continued troubles and their impact can be seen in the $8.6 billion in losses
recorded in 2019.
Even in the wake of the above mentioned challenges, the company was still able to increase
its revenues in the first two quarters of 2017 and reducing is losses by an approximate 9%.
According to Perera & Albinsson (2020), the company was valued at $70 billion as of March
2017. However, regardless of the valuation, investors have still been cynical regarding the
company’s capacity to generate profit in the long-term. These challenges highlight the
importance of corporate culture to the performance of an organization. According to Calo &
Rosenblat (2017), corporate culture is important in developing a sense of community with
companies using eccentric language and strategies to develop their corporate community.
Corporate culture defines the identity of a corporate entity as well as its image and reputation.
For Uber, the company suffered both public and internal criticism considering its toxic
atmosphere and the public behavior of its previous leader Travis Kalanick. Besides, the persistent
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attempts by the company to sidestep government regulations by ignoring privacy laws, operating
in illegal areas, and failure to report sexual harassment claims while disrespecting the privacy
rights of the victims. Generally, these outcomes gave an indication that the company had a lot of
‘growing up’ to do that did not do well for its reputation and corporate image.
Problem statement
Uber Technologies Inc. has been dogged by the implications of its toxic workplace culture
regardless of the efforts of its CEO Dara Khosrowshahi to change the story of the company. The
problems currently facing the company can be traced back to 2017 when a former Uber worker
went public on how the company condoned sexual harassment in the workplace. The revelations
affected the public image and reputation of the company as the resulting outcry over the
company’s toxic culture was followed by investigations. According to Cook, Patel, & O’Rourke
IV (2019), the company had to fire over 20 workers over their contribution to the behavior as the
company faced criticism over its “growth-at-all-costs mentality.” The ouster of the former CEO
and co-founder Travis Kalanick was the highlight of the consequences faced by the company as a
result of its toxic workplace culture. Furthermore, the toxic corporate culture of the company was
confirmed through federal investigations where according to the Equal Employment Opportunity
Commission, there was acceptable cause to believe that the company allowed a culture of sexual
harassment with the individuals who complained about it facing retaliations (Cook, Patel, &
O’Rourke IV, 2019). The outcome of the toxic workplace culture was a $4.4 million fund the
company had to pay in compensating former and current employees who were subject to sexual
harassment in the workplace. The current project is therefore based on the need for the company
to fix the structural inequalities attributed to the poor corporate culture and toxic workplace
installed by the former leadership.
Industry Analysis Models
Industry analysis models are important instruments used in assessing the business context of a
company to determine its current situation. They are important in this case because they enable
the researcher to evaluate the company to understand its strengths and weaknesses that form the
basis for developing recommendations. According to Anton (2015), industry analysis models
such as SWOT and PESTLE are important theory-based instruments that are fundamental in
assessing the internal and external organization of a company. Through these models, it is
possible to understand how the company interacts with the various aspects in its business
environment. Four different models are used in this project to evaluate the business and corporate
context of Uber Technologies Inc. These models will be SWOT, PESTLE, VRIO, and Porter’s
Five Forces analysis.
SWOT analysis
SWOT analysis is a strategic tool used in evaluating the strengths and weaknesses as well as
the external opportunities within the environment of an organization. According to Helms &
Nixon (2010), the internal analysis in conducting a SWOT analysis is important in identifying
the resources, capabilities, core competencies, and competitive edge intrinsic to the company.
The external analysis is important in identifying the market opportunities as well as threats
through an assessment of the market competition in terms of their resources, the industry context,
and the general environment. For Helms & Nixon (2010), the objective of SWOT analysis is to
exploit the knowledge possessed by an organization in relation to its internal and external
environment to develop the appropriate strategy.
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Analysis of the internal Strengths and Weaknesses of a company is important in understand its
source of competitive edge. According to Sammut‐Bonnici & Galea (2015), internal analysis
enables the management of a company to pinpoint the resources needed for development and
sustenance so that it can maintain its competitive advantage. Competitive advantage should be
unique for the company in order to ensure that it generates revenue above the industry average.
Therefore, a SWOT analysis is an important part of the strategic management process that
involves a comprehensive assessment of the organization. This process begins with an evaluation
of the internal resources of the company and its capabilities, which includes the source of the
organization’s core competencies that form the basis of its competitive advantage.
According to Helms & Nixon (2010) the main element of an internal evaluation of a
company’s strengths and weakness include its resources. These are divided into functional
categories of innovation, marketing, distribution, manufacturing, suppliers, infrastructural,
managerial, and financial resources. According to Sammut‐Bonnici & Galea (2015), completing
an internal analysis of the strengths and weaknesses of a company involves different challenges.
For instance, when considering the strengths and weaknesses of a company, management
practitioners list all the elements through which the company is believed to be most vulnerable or
robust. This means that they end up with an array of factors that may not be easy to analyze and
translate into strategic action. Whereas developing such a list may be relevant to the context, its
contribution to the development of effective strategy is narrow. It is therefore important for the
management practitioners to focus on the main source of competitive advantage the company
seeks to establish.
As Helms & Nixon (2010), state internal analysis is based on a critical commandment “know
thyself” that marketers need to follow. This means that it is vital to understand the internal
strengths and weaknesses of the company. The Strengths indicate the inherent resources or
conditions that may be used by a firm in exploiting opportunities. They are core competencies as
well as organization capabilities that offer it’s a competitive advantage for being superior to
market rivals and favorable to the customers. A company should therefore strive to advance
proficiency in the areas that valuable, relevant, and important for its current and target customers
and in the areas that define its competitive assets that help in competing favorably in the market.
The Strengths section of a SWOT analysis needs to focus on the customer-relevant strengths of
the company rather than on listing all of its strengths. These strengths should have a unique
advantage compared to those of the rival companies in the market. Weaknesses entail the
company capabilities and core competencies that are inferior to those of the rival companies
within the industry. According to Helms & Nixon (2010), weaknesses encompass the areas for
which the company is deficient. Organizations need to strive to improve their weaknesses in the
areas that are valuable and important for the customers as well as in the areas where the market
rivals have considerable advantage against them (Cook et al., 2019). The process of identifying
company weaknesses requires that company managers understand the needs of the customers in
relation to all the competitors within the industry. They also need to understand the competencies
that provide a company with a unique advantage in relation to its market competition. As Helms
& Nixon (2010) state, a company may have to address the improvement of the required
competencies in order to stay in the game and enhance its unique capabilities to ensure its stays
ahead of the market rivals. Ignoring the significant weaknesses of the company may hinder its
progress and ability to remain profitable.
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External analysis as Helms & Nixon (2010) describe involves an evaluation of the external
opportunities and threats that a company faces. These include the factors within the external
environment of the company that it cannot control, yet it must respond to them. Good
management involves the finding, development, and exploiting opportunities within the external
environment of the business. Changes in the external environment of the business creating new
needs form the customers, opportunities for entry to new markets, and introduce new
technologies that potentially increase efficiency and save costs. Therefore, the analysis of
opportunities in SWOT analysis is important in evaluating the favorable developments or trends
within the external environment of the business that may result in increased profits and sales.
Whereas a company may not control the external opportunities, it may exploit them to advance
its business goals. In assessing the external factors of the company, it is also important to assess
the threats it faces due to those factors. Changes in the external environment of a business may
restrict access to markets, increase the level of competition, or reduce the desire of the
consumers for the company products. therefore, the threats section of a SWOT analysis should
evaluate the unfavorable developments and trends that potentially threaten the current financial
standing of the company or preclude it from taking on new opportunities. Whereas the company
may not have control of the threats it faces, it may change strategy to ensure that it everts their
adverse outcomes.
The goal of conducting an external environment analysis is to facilitate the identification of
the main developments and future outcomes in the general context of the business. For Helms &
Nixon (2010), the external environment is made up of variables that are not under the control of
the company, yet they need to be evaluated to align organization strategies to the dynamic
business environment. Therefore, an external analysis is important in the identification of the
potential opportunities for further development and threats to the company. According to
Sammut‐Bonnici & Galea (2015), the implications of an external analysis for a company’s
strategic management are twofold: considering the perspective of the I/O (industrial
organization), the company should identify and pursue the markets that offer the best chance for
profitability and competitiveness. This is because the geographic and industrial markets that a
company decides to operate in pose a significant influence on performance than the internal
strategic decisions Helms & Nixon (2010). The second perspective is the RBV (resource-based
view) where the company needs to identify a competitive advantage position within the market
where it can have control over rivalry, substitutes, buyers, suppliers, and new market entrants or
where it may shield itself from their threats. Therefore, a company with a greater capacity to
impact the industry context is more likely to earn profits above the industry average (Sammut‐
Bonnici & Galea, 2015).
PESTEL Analysis
Pan, Chen, & Zhan (2019) state that PESTEL analysis is a popular instrument for strategic
management that is used in helping evaluate the Political, Economic, Social, Technological,
Legal, and Environmental issues affecting a company. According to Shatskaya, Samarina, &
Nekhorosheva (2016), the purpose of a PESTLE analysis is to enable the management of a
company to look around and assess the broader economic and business environment. Therefore,
the tool is important in analyzing all the fundamental elements that may affect the failure or
success of the business. PESTEL analysis is an important tool for managers as it enables the
identification of the key macroeconomic factors that may significantly affect the future
development of an organization. However, despite being a powerful tool for business analysis,
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Shatskaya, Samarina, & Nekhorosheva (2016) aver that PESTEL should represent only one
element of an in-depth strategic analysis process. As such, the current project uses the tool
alongside three others with the view of achieving a comprehensive analysis of Uber and develop
recommendations accordingly.
Political factors: it is always important for a company to keep track of potential changes in
policy in the government. This is because even when the political environment is quite stable,
policy change may have different implications on the business (Pan, Chen, & Zhan, 2019).
Changes in government priorities may lead to the introduction of new initiatives including
changes in taxation of trade regulations. For companies such as Uber operating within different
jurisdictions, political may be the most important consideration.
Economic factors: this involves evaluating the changes in the excise duties, trade regulations,
exchange rates, interest rates, and inflation which are important elements of an economy. In
relation to the operational efficiency of a company, it would also be important to considers
different economic factors such as trends in labor costs, working practices, skills level,
unemployment, wage patterns, and availability of expertise (Shatskaya, Samarina, &
Nekhorosheva, 2016). Besides, a company may need to consider the cost of living in assessing
the economic viability of a market. A company can therefore develop strategies that align with
the economic condition of a market.
Social factors: analysis of different social factors that potentially affect the market within
which a company operates. Some of these factors include religious beliefs, social and cultural
conventions, income statistics, employment levels, age distribution, and population growth rate
among others. According to Pan, Chen, & Zhan (2019), social factors are important for global
and internal markets while the success of a company will depend on the depth of its research on
these elements.
Technologic factors: in the modern world of technology, technologic factors have become
fundamental for companies in assessing and determining the issues that may potentially affect
their operations and could be crucial for their future in the long-term. Technologic advancements
are rapidly being realized and often the changes that affect the market may emanate from
unexpected sources.
Environmental Factors: these factors relate to the concerns linked to the protection of the
environment that has become increasingly important in the past few years. these factors have
become crucial for businesses with globalization as the impact of a company’s activities may be
experienced beyond its native country and may incur extensive financial penalties (Shatskaya,
Samarina, & Nekhorosheva, 2016).
Legal factors: a company should consider both impending and current legislations that may
potentially affect the industry. Some of these regulations are linked to health, competition, safety,
and employment. An organization also needs to assess expected changes in legislations within
the main trading partner countries (Pan, Chen, & Zhan, 2019). Besides, the past few years have
seen a significant increase in the number of regulatory bodies that have been put in place to
monitor the compliance of organizations with the relevant policies in their areas of operation.
Different government institutions now monitor the compliance of companies with taxation laws,
waste disposal, employee welfare, and consumer protection (Shatskaya, Samarina, &
Nekhorosheva, 2016).
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Porter’s Five Forces Analysis
Porter’s five forces is an industry analysis model use in the analysis of the competitive level
within an industry. The model is also an important tool for strategic management as it helps in
the development of strategy for an organization (Wu, Tseng, & Chiu, 2012). Porter’s five forces
model is based on the IO principle of economics and evaluates five main factors that affect the
competitive intensity in a market and help in determining its attractiveness. According to Grundy
(2006), attractiveness refers to the profitability of the overall industry. Therefore, an industry is
considered unattractive if the combination of these forces do not influence the overall
profitability of the industry positively. In this context, a very unattractive market would be one in
which the organizations that operate within it experience almost pure competition where all the
profits are driven towards normal profit. According to Porter Wu, Tseng, & Chiu (2012), these
forces entail the micro environment of the organization under consideration that help contrast its
performance with the more general macro-environment. The five forces defined by this model
include:
The threat of new entrants: an industry that is profitable and yields high returns attracts new
businesses. As a result, there are numerous new entrants that eventually leads to a decline in the
profitability across all the businesses operating in the industry (Grundy, 2006). If the incumbent
organizations fail to block the entry of new entrants, then the high yield will be driven towards
zero.
The threat of alternative products: when there are numerous product offerings in the
market, the chances for the customers to switch between different products increases. Some of
the potential factor for this include decline in quality, switching costs between products for
customers, ease of substitution, and the availability of close alternatives (Wu, Tseng, & Chiu,
2012).
Buyer bargaining power: this involves the capacity of the customers to drive the prices
down by putting pressure on the company. Buyer bargaining power may be countered through
different strategies such as enacting a customer loyalty program (Grundy, 2006). When there are
many alternatives within the market, the buyer bargaining power is high, however it remains low
if they act individually.
Supplier bargaining power: this is also referred to as the market of inputs. Company
suppliers of services, components, and raw materials have a higher bargaining power if there are
few alternatives. A company faces the risk of being charged very high prices for unique resources
or the suppliers may refuse to work with the company altogether (Wu, Tseng, & Chiu, 2012).
Level of competitive rivalry: the intensity of competition within an industry determines its
attractiveness. Some of the potential factors in this context include innovation for sustainable
competitive advantage, degree off advertising expenditure, robust competitive strategy, and firm
concentration ratio (Wu, Tseng, & Chiu, 2012).
VRIO Analysis
According to Cardeal & Antonio (2012), the resource based view (RBV) is based on the
notion that a company’s competitive advantage is founded on value, rarity, inimitability of
resources, and organization (VRIO). VRIO analysis is therefore an analytical tools used in
assessing the resources of a company and its competitive advantage. It constitutes an acronym
from the initials of the aspects of evaluation including Value, Rareness, Imitability, and
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Organization (VRIO). VRIO analysis is an important tool for evaluating the resources of a
company.
Value: resources create value when they enable the organization to develop and implement
strategies that help enhance its effectiveness and efficiency. Therefore, company resources create
value and become resources if they enable the neutralization of threats and exploitation of
opportunities (Lin, Tsai, Wu, & Kiang, 2012). According to Cardeal & Antonio (2012), it is
fundamental for a company to have access to sufficient capabilities in order to exploit their
resources. This means that despite the company’s resources having the potential to create value,
they remain latent until the company has the ability to exploit them.
Rareness: when the valuable resources of a company are also available and possessed by its
market competition, then they cannot serve as its source of competitive advantage. According to
Lin et al. (2012), in such a situation, all the companies have the capacity to exploit the resources
and implement a common strategy negating any competitive advantage. However, organizations
still maintain similar but valuable resources as they help in their survival and achieving
competitive parity. Evaluating this aspect of a company therefore involves answering the
question of how many competing companies currently control similar resources to the
organization under consideration.
Imitability: according to Cardeal & Antonio (2012), it the valuable and rare resources of the
company are easy to imitate, then the competitor would easily copy them and negate its
competitive advantage. Therefore, resources that are difficult to imitate are ambiguously related
to enhance competitive edge and are path dependent. In addition, such resources are socially
sophisticated, involve a lengthy process to imitate, and are legal property rights (Lin et al., 2012).
According to Cardeal & Antonio (2012), an organization with valuable and rare resources have
the opportunity to exploit the first mover advantage through innovation as allowed by its
resources. Competitive advantage is therefore maintained only when the resource cannot be
obtained by the market competition through substitution or direct duplication.
Organization: as Lin et al. (2012) aver, competitive advantage comes from the approach used
by an organization in operating and interrelating both its strategic and non-strategic resources in
exploiting processes to produce intermediate products between its final products and primary
resources. This element involves evaluating whether the other policies of a company and its
procedures are organized to support the exploitation of its valuable, rare, and inimitable
resources.
Company Analysis
SWOT analysis
Uber Technologies Inc. follows the on-demand-service business model. This means that the
company only provides that include food delivery, transportation and other services only when
the customers need them. Under this model of business, there are minimal customer cost
acquisition, while the pricing framework is dynamic and determined by the offered services, and
does not require intensive capital investment which makes the company’s expansion easier.
Therefore, one of the strengths for the company lies in its model of business operation. The
target customers for the company are professionals and business people seeking spontaneous
cabs. The major assets of the company are in its customers where it successfully keeps them
satisfied by swiftly addressing their issues via proactive customer support. Some of the
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company’s biggest competitive edge lie in its healthy brand equity that attracts the attention of
the investors, the company’s strong financial standing, effective marketing, innovative
advertising, and superior technology as is seen on its mobile app.
The leading weakness for the company is its corporate culture. The company’s employees
have a history of being unethical and unprofessional which has negatively affected the image and
reputation of the company. Sexual harassment issues have been a regular occurrence at the
company, which have caused numerous law suits and the ultimate resignation of the previous
CEO. The company is highly dependent on technology which limits the services it can offer.
The company’s presence in both the developed and developing economies provides it with
various opportunities. Some of these include the opportunity to integrate logistics within its
existing business model, and increasing service offerings by providing other transport facilities.
Besides, considering the persistent increase in smartphone and internet consumption the
company has the potential of increasing its customer base even further.
The company is facing threats from increasing competition. This is evident in the way Lyft
has affected the market especially in the wake of Uber’s controversies and negative public image
due to its corporate culture. As a result, the customers and the drivers can easily switch to the
rivals within the market who offer better services and better technology. The table below
provides a highlight of the company’s SWOT analysis.
Strengths
 Advanced and easy to use
mobile app.
 Low operational costs that
increase profit margins.
 Proactive customer support.
 Favorable business model.
 Healthy brand equity.
Opportunities
 Potential to dominate
emerging markets.
 Increasing smartphone usage
and internet penetration.
 Car pooling and electric car
usage.
 Opportunity to change strategy
and improve corporate culture.
Threats
 Increasing market competition.
 Changes in government
regulations considering the company
operates in different jurisdictions.
 Autonomous electric cars.
 Protest from local players and
taxi drivers.
Weaknesses
 Poor corporate culture.
 Poor relations between the
company and its drivers.
 Vague and meaningless
values.
 Toxic workplace ethics.
 Overreliance on technology.
PESTEL Analysis
Political factors: Uber has been the subject of political debates worldwide. Various
governments have been concerned with the regulation of the sharing economy. The advent of
Uber caused disruption within the traditional taxi industry, which has been subject to increased
opposition that has turned political. The company has also faced lawsuits considering its
approach to treating the drivers as contractors rather than employees.
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Economic factors: the company is affect by different economic factors. Sharing economy has
been important in creating employment opportunities on a large scale. Besides, the company has
reduced the costs for the customers seeking a cab and made the process easier.
Social factors: the company’s strategy has been subject to criticism as a result of its socially
unacceptable outcomes. As such, the company has sought to rectify this and maintain a reputable
image to the public.
Technological factors: Uber is major reliant on technology considering it provides services to
its customers through a mobile app. Through its innovative technology, the company has been
able to control a large share of the ride sharing market.
Environmental factors: modern business are increasingly embracing the concept of
sustainability. Through ride sharing and carpooling services, the company has indicated its effort
towards embracing eco-friendly initiatives.
Legal factors: Uber has on many occasions crossed paths with legal authorities as a result of
its wanting corporate culture and tendency to subvert the law. The company has faced law suits
and federal investigations relating to both human resources and taxation regulations.
Porter’s Five Forces
Threat of new market entrants: from its inception, Uber has been enjoying considerable
profits in the provision of transport services. As previously discussed, any profitable industry is
attractive and is therefore a target for new market entrants. Uber faces this risk as different
companies may blatantly duplicate its services or offer even better services, especially when the
company is creating a negative public image. However, entry into the market is capital intensive
which along with other entry barriers may hinder new market entrants.
The threat of substitutes: different companies may provide the services offered by Uber. The
company faces competition from the traditional taxi services. Besides, Uber faces competitive
quality services from taxi services with more ride-sharing operations providing cheaper services
that limit the Uber’s monopoly in the market.
Bargaining power of suppliers: Uber faces the threat of the availability of driver suppliers
within the market. The company does not own cars and is therefore reliant on the driver-car
owners. The company faces poor access to drivers considering the numerous requirements and
the lack of appeal to drivers due to its workplace culture. Besides, the switching costs of the
suppliers are significantly low.
Bargaining power of the buyers: the bargaining power of Uber customers is high. This is
because of the high market competition and availability of alternative transport means such as
taxis. In addition, the switching costs for the customers are relatively low.
The level of competitive rivalry: Uber faces high competition despite operating in different
markets all over the globe. Services like Lyft in the US increase the level of competition
considering they operate the same business model as Uber.
VRIO Analysis Uber
Value
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Analysis of Uber indicates that its financial resources are valuable as they enable the company
to exploit external opportunities and combat external threats. The company’s offerings are a
valuable resource considering their high differentiation. Another valuable resource for the
company lies in its distribution network. The company has extensive geographical reach that
enables it to have a wider base of customers than its market competition. However, the cost
structure and corporate culture are not valuable resources. The company’s approach to
production costs lead to higher costs while its corporate culture opens up the company to
numerous threats.
Rarity
The valuable financial resources of the company are rare. Very few companies have the strong
financial standing of Uber. The valuable differentiated local products of the company are not rare
as the competitors can easily substitute or duplicate them. However, its patents and distribution
network are rare valuable resources.
Imitability
It would be costly for competitors to copy the financial resources of Uber. The company has
achieved its financial position through consistent profit generation through the years. However,
its local products are easy to imitate as rivals can provide alternatives. The company’s patents
and distribution network are not easy to imitate.
Organization
The financial resources of the company are organized to capture value. The company uses its
financial resources to strategically invest and exploit opportunities while averting threats. The
corporate culture of the company is however not organized as it is clearly not being exploited to
full potential to create a competitive edge.
Social Benefits and Costs of Uber
For better assessment of the issues facing the company, it is important to understand its
business model. To begin with, the rise of Uber within the transportation industry has accrued
some benefits including Airbnb along with other sharing-economy firms. According to Verschoor
(2017), through sharing-economy, Uber indicates the potential to facilitate increased efficiency in
the use of capital and improve the welfare of the customers. For instance, the company reduces
the incentives of the customers to buy automobiles, which almost certainly saves them money
and reduces pollution. As fewer automobiles are purchased, the company creates an important
potential for parking spaces to be used in new and ecofriendly ways. Besides, the company
provides potential for reducing drunk driving that leads to accidents, which along with the other
social benefits are important social outcomes. Nevertheless, the company has faced increased
criticism under at least six spheres. To being with, the company is seen to compete unfairly with
taxi drivers after entering their market without any regard to fare schedules and regulations.
Secondly, the company has sought to be a monopoly in the market while its cars and drivers are
not safe and adequately insured. In addition, there have been concerns that the company may
invade the privacy of the consumers and undermine the working standards of the taxi drivers by
poorly compensating its own.
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According to Chee (2018), it is unquestionable that Uber has always sought to undermine the
traditional taxi industry. It is apparent that it is an unfair competition for taxi drivers operating in
the same market with Uber considering the prices it offers the customers and its drivers being
subject to different rules. This is more apparent when the company moves to flood the market
with part-time drivers at peak periods. In addition, it is also apparent that Uber is seeking to
dominate the ride-sharing industry while pursuing the logistics market at the same time. For
Verschoor (2017), undue power within these industries by the company would threaten the
welfare of the consumers. However, it does not justify regulating the company out of existence
on the basis of these factors alone. One thing noted through these considerations is that enhanced
vertical and horizontal integration may accrue some public benefits. Furthermore, it is not
apparent that Uber steadily occupies the top of the ride-sharing sector, considering the surge of
Lyft as its leading competitor. While Uber provides a revolutionary application, it faces the threat
of being copied. Already, Uber faces high competition within the ride-sharing market, which
considering the continued public relations blunders, should continue to increase. As the analysis
above indicates, while the success of the company is based partially on network effects, the costs
of switching between drivers and riders for the customers is considerably low. This therefore
reduces the weight of the concerns for the company being a monopoly in the industry as it may
be a pioneer that fails to maintain its market position if its ethical and corporate culture is to go
by.
Other concerns for the company are more sophisticated. For instance, the company has faced
concerns in different jurisdictions such as Germany in relation to safety. These concerns have not
been baseless as an Uber driver hit and killed a girl after allegedly being distracted by the app
(Chee, 2018). In addition to the safety concerns, the insurance of the drivers may not cover the
accident victims as the company’s commercial coverage were not in effect when a driver is not
carrying a fare. Safety concerns have also been accelerated by the company’s drivers assaulting
passengers and committing other crimes. Ube shares some mora and causal responsibility for the
crimes committed against its customers as it plays the role of linking up the passengers and the
drivers. This may form the basis for the company to institute comprehensive background checks
on its employees. Another concern for the company, is in its handling of rider data. According to
Baj-Rogowska (2017), Uber’s handling of customer information became subject to concern after
a potential plan for spying on journalists was extensively covered. As a result, some of the
company customers stopped using its services marking one of its many reputation blunders as
will be discussed in the next section. The data safety concern was not unwarranted however as
the ride data on elected officials, businessmen, and journalists among others may be exploited for
wrong reasons such as corporate espionage. Another concern for the company lies in
discrimination. According to Verschoor (2017), discrimination is a potential risk to the riderfeedback model of Uber as it requires drivers to maintain a certain level of score or lose their job.
This model faces the risk of passengers giving bad reviews based on racial inclinations. As a
ripple effect, racial discrimination in the rating of drivers may cause them to choose to work with
the wealthier customers (Baj-Rogowska, 2017). According to Chee (2018), discrimination
against black drivers is especially infamous.
Issue Analysis
For a while, the priority for Uber Technologies Inc. was on growth at all costs even at the
expense of ethics. This involved doing all it takes to win, a strategy that according to Verschoor
(2017), bled over into the culture of the company. Under the leadership of the former CEO, the
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company implemented a set of 14 yet vague company values that have had negative outcomes on
the culture of the organization. The overbearing theme across the company’s values was the
notion of doing all it takes to win, even when it implies ignoring moral and ethical values.
Despite the strategy resulting in considerable growth of the company, ignoring ethics led to a
toxic workplace culture as the vision of the company was misinterpreted. The dysfunctional
workplace culture of the company caused extensive media turmoil that led to inevitable changes
in the top management. Uber has been subject of both public and internal criticism as a result of
its toxic workplace atmosphere and the conduct of its former CEO Travis Kalanick. Initially, the
company explicitly employed a start-up corporate culture, one that has been termed “Win-at-anycost.” Therefore, the corporate culture of the company as Cook et al. (2019) describe, was highly
decentralized and emphatic of autonomy between regional offices. The outcome of such a
strategy was the lack of a corporate identity which made various stakeholders left out of the
company’s corporate culture.
The company was the subject of public criticism concerning its values that may be seen from
some of the slogans such as “making bold bets,” “meritocracy and toe-stepping,” and “principled
confrontation” among other controversial statements (Baj-Rogowska, 2017). Besides, the
company workers perceived it as a “blood sport” having to undergo 70-80 working hours per
week. Here, the problem is how the company values were perceived and were not impressive to
many individuals within the company. In addition, Mr. Kalanick was regularly perceived as
insensitive as a result of his conduct towards the company employees. His comments during
company retreats indicated that he encouraged a “hook up” culture in the organization, a serious
concern considering the sexual harassment issues at the company. As mentioned previously, the
company was found guilty of encouraging and condoning sexual harassment, a feat that saw
more than 20 employees get fired when the company was finally put under scrutiny (Cook et al.,
2019).
According to Chee (2018), employees naturally grow confident when the company
appreciates and protects them instead of reprimanding them for the actions. In the case of Uber,
the company has failed to protect female employees in the wake of increasing sexual harassment
concerns. As a result, the company developed a toxic culture in the workplace with the female
workers significantly at risk. The outcome of having such a culture has been a negative image to
a company considered a world leader in the rental and cab services business, which has hurt is
growth and share of the market. According to Verschoor (2017), despite the tremendous growth
of Uber, the company has been subject to criticism considering the manner in which it treats its
employees. As research has shown, the workers at the company do not have opportunities for
voicing their problems to the top management (Baj-Rogowska, 2017). One of the events that
highlights the toxic workplace culture of the company is the sexual harassment of Susan a female
engineer in the company. When she reported the issues, the company management chose to
threaten her job and ignore her sexual harassment claim. On the same note, Mr. Kalanick the
former CEO of the company was caught on camera arguing with a company worker over
payment, an indication that the company employees could not reach out to the top management
when they were facing challenges.
From 2017, Uber has experienced a series of challenges as a result of its toxic corporate
culture. The problems have included lawsuits for operating within jurisdictions that it was
banned and Mr. Kalanick’s support of Trump that resulted in a campaign for deleting Uber’s app.
In addition, employees resigned from the company which only added to its troubles after
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steaking technology from Google. These outcomes have had a negative impact on the Uber
workers which is seen by the resignation of the company vice president Jeff Jones due to the
questionable morals of the company. According to the former vice president, the company does
not conduct its business in line with his leadership values. This further highlights the way the top
management of the company conduct its business in an unethical way. Delving deeper into the
corporate culture of the company in an attempt to identify the main source of its problems, it is
clear that it is not one, but a combination of several.
One of the reasons identified as the cause for the misfortunes of the company was its failure to
identify cultural issues. The company’s ineffective human resource management was the main
contributor to this failure for being a threat to the reputation of the company, worker retention,
customer relations, and integrity. Besides, the company failed to sufficiently address complaints
and issues relating to the sexual harassment of some of its employees. The company ignored
such complaints based on the notion that the accused employee was a top performer. Such
conduct from the human resource management of the company failed to protect and empower
employees which developed a toxic workplace culture and a difficult place for female employees
to work. The company only decided to act after these issues were made public creating backlash
and public outcry. While addressing these issues, the company turned to its investors, workers,
and insiders rather than independent bodies which indicated a lack of transparency in the
company. In addition, it is clear that the company does not have a clear, direct, and strict strategy
for enforcing ethics and company values. As stated previously, the company’s values are defined
by relatively vague statements that are open to misinterpretations. Slogans such as ‘be yourself’
for company values among other controversial may be open to misogynistic interpretations and
poor judgement that may have encouraged the company workers to perpetrate the toxic
workplace culture.
An analysis of the company indicates that Uber has failed to bring its top management and the
workers together. This highlights the internal struggles of the company that poses negative
outcomes for its public image and corporate social responsibility. The main contributing element
to this challenge is the poor communication within the organization. There is lack of proper
correspondence between the managers of the company and its employees. This means that the
workers could not seek out the top management for help when they encounter challenges at
work. As such, most of the problems facing the company workers remained unresolved
contributing to the ultimate failure in the workplace culture of the company. Such an attitude
among the employees constitutes the main hindrance to internal communication. According to
Chee (2018), the HR of Uber may be to blame for most of the problems it faces. The top
management of the company expected its HR department to deal with the complaints and issues
relating to the workers, but the department failed terribly leading to the poor workplace culture.
As Verschoor (2017) states, the HR department of Uber completely failed to perform its
responsibilities. Furthermore, the department failed to take any stringent actions on the culprits
and perpetrators of sexual harassment of female workers. To the contrary, the department
threatened to fire the employees who complained about the issue. Besides, the department failed
to take any delays and complaints seriously, a move that would prove to be detrimental in the
public outcry and investigations that would later follow. HR is mainly responsible for the
company being considered among the top three multinational corporations that are not safe for
women to work in.
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Most of the leading multinational corporations consider company values an important part of
their business and operations. However, for Uber, the company chose to base its values on vague
statements indicative of its preference of performance to ethics. The company has no clearly
defined values on how employees should go about their daily tasks and navigate challenges
while working. Employees lack the idea of what their colleagues are assigned to do and how to
approach it creating confusion in the company. Customer service for Uber was also affected by
the poor communication between the top management and company employees. The preference
of profits to ethics resulted in the company ignoring ethical values so long as they are performing
better. This makes the environment in the organization competitive, yet its ‘winning at all costs’
mentality would prove detrimental to employee relations leading to a lack of clear company
values. In addition, these outcomes also point to the lack of transparency within the organization.
The top management would rather ignore the plight of the employees in the workplace. The
approach used to resolve issues was not clear considering the top management decided to
develop their own investigation team to address the sexual assault complaints. This constitutes a
clear indication of the lack of transparency within the company and its management.
Leadership Considerations
The leadership approach of Uber has been subject to concerns since the start of 2017. For
instance, in 2017, several company executives resigned from the company due to leadership
concerns (Cook et al., 2019). However, the hallmark to the company’s wanting leadership is in
the resignation of the former CEO Mr. Kalanick. This was in the wake of public outcry as a
result of the toxic corporate culture and the conduct of the former CEO that encourage and
tolerated sexual harassment in the organization (Cook et al., 2019). Considering the failures of
the company in leadership, the Holder report assessed he company and encouraged an overhaul
in the top management of the company. The report encouraged the resignation of six executives
in 2017 due to differences in leadership approach and beliefs. As such, the current project advises
the company based upon the findings of the report, where it recommends the company to seek an
independent board alongside an independent chair. These should be supported by an oversight
committee that uses compensation as a way of holding the senior executives accountable. The
company should also add a diversity coordinator into its leadership ranks to help in addressing
the inclusion issues.
Ethical considerations
The workplace culture of Uber Technologies Inc. became compromised when it chose
performance at the expense of ethics. From the previous analyses of the company, it is clear that
neither the HR department nor the top management of the organization paid attention to
implementing ethical standards. This has been a major contributor to the negative outcomes to
the workplace culture of the company. According to Chee (2018), the hyper-competitive nature
instilled among the employees by the top management and the consequent lack of supervision
and proper leadership resulted in an aggressive working culture that created ethical challenges in
the system. The primary value expressed by the company and potentially a major contributed to
its failure in ethical culture is the notion of meritocracy. Meritocracy as Verschoor (2017) states
is “the idea that the best and brightest will rise to the top based on their efforts, even if it means
stepping on toes to get there.”
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Conclusions
From the analysis conducted in this report, it is clear that the corporate culture of Uber has
been the source of numerous problems for the company. These problems have been assessed
through various analysis models including SWOT, PESTEL, and Porter’s Five Forces. Despite
pointing to various issues facing the company, the overarching challenge the company has to
deal with lies in its corporate culture. This is because through its corporate culture, the company
ignored serious issues facing both its employees and customers such as sexual harassment. The
strategies used by the company have also been subject to criticism considering the fact that they
were not fully appreciated internally. The analysis therefore indicates that it is time for the
company to aggressively change its corporate structure to improve its reputation and public
image. the following issues were discovered as the cause of the company’s challenges:



Toxic workplace culture.
Vague and meaningless company values.
Reluctance to own up to its problems.
Recommendations
The current project therefore develops some recommendations for Uber in relation to its
corporate culture and leadership strategy. These include:
Transparency
One of the leading factors accelerating the toxic workplace culture of the company is a lack of
transparency. Therefore, the company should begin by embracing the willingness to be
transparent and direct. This will help the company change improve its reputation and become
equitable to everyone working there.
Embrace diversity
The company should embrace diversity, which should begin by releasing a diversity report. A
diversity report may not in itself develop a more inclusive culture, but it gives a signal that the
company is owning up to its problems and is working towards changing them (MacDuffie &
Schipani, 2017).
Redefine company values
According to MacDuffie & Schipani (2017), for a tech company, company values are
definitive elements that make it unique in term of culture. For Uber, there are company 14 values
which include vague statements such as “always hustling” that as mentioned before, have been
considered immature. The company should therefor focus on developing maxims that mean
something and point toward a better corporate culture.
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