Analysis of Uber on the International Stage and

Recommendations for Improvement

IMS3310.002
Group 8
Joseph Long, Garin Moi, Noah Mills, Meredith Montenegro

Executive Summary
Uber was founded in 2009 and has become the worlds largest ride sharing
company. Uber is one of the worlds fastest growing companies, and can be found in over 64
countries around the world. Even with their rapid success and expansion, there are countries
around the world where Uber is facing issues breaking into their markets. Our goal is to analyze
these problems, and suggest recommendations so Uber can be successful in competing against
formal and informal institutions around the globe.
Analysis: Uber is currently having trouble entering the markets in China, India, Brazil
and other Southeast Asian countries. We have investigated and realized that there are a few
issues that have to be resolved before Uber can flourish in these countries. The first problem
would be that Uber is expanding too quickly, and the company is not spending enough time
researching the markets before they enter. Secondly, Uber needs to evaluate the competitors
who already exist in these countries. Next, the firm needs to look at social and cultural
differences, which is important because Uber needs to understand the needs and wants of
customers in foreign countries. Lastly, Uber is facing multiple lawsuits when it comes to their
drivers. Uber has been classifying their drivers as contractor in order to cut cost and forgo
paying benefits.
Recommendations: After completing our analysis, these are the recommendations that
Uber should execute when the company enters a foreign market. Ubers CEO reasoning for
quick expansion is that the ride sharing business model can be easily imitated. Our group
believes that Uber should put more effort on correcting issues in existing markets before
expanding into new markets. When it comes to combating other competitors, Uber should
generate business in other countries by providing promotions or incentives to advertise their

brand. Next, Uber needs to recognize the importance of cultural and social differences in other
countries, and the firm should adjust their business model based on each nation. For example,
Uber should take cash payments in Asian countries because customers there feel more
comfortable paying with cash instead of credit cards. The final recommendation would be to
give Uber drivers more benefits so they do not leave for a competing company.
Conclusion: We believe Uber will be successful in expanding into other foreign markets
if they implement our recommendations. With more competitors entering the ride sharing
market each year, it is important for Ubers brand to be recognized in those countries first. In
order to continue being the market leader, Uber must address the issues of contractors, foreign
competitors, cultural and social differences, and quick expansion so the company can continue to
thrive.

Introduction
Uber is a software company in charge of making ride-sharing applications and
implementing them in nations all across the world. Uber was originally started in San Francisco
by Travis Kalanick and Garrett Camp in 2009; and is now estimated to be worth around $62.5
billion. Uber started by offering its ridesharing services in major cities across the United States
and then went multinational in 2012 when they began operating in Paris, with services offered in
major cities across six continents.
The standard concept of Uber used normal drivers in the target city and gave them a
commission off rides they gave using their app. All a driver would have to do is give some basic
personal and insurance information and then use their app to find, drive, and charge their clients.
This system is setup so that Uber can claim their drivers as independent contractors, not
employees, and avoid having to give the typical government-mandated employee benefits.
Uber has been well received among the millennial generation especially because of their
simplistic, easy-to-use app design and because out of work people can now make good money
without much training or regulations. Standard taxi companies are typically harder to get because
of often mediocre app design and a comparative lack of drivers. Uber represents steady work for
people who lack the training or opportunity to pursue a career, and is one of the few jobs you can
do without a manager or fixed schedule to respond to. An out-of-work person just has to drive
around a few hours a night and they can make more money than they would working a full shift
at McDonalds. Uber has also been accredited with declines in DUI arrests and accidents with
intoxicated drivers by giving intoxicated individuals an easy and quick way to get home without
risking anyones life.

Uber has also received plenty of negative criticism from people across the world.
Standard taxi companies are resistant to the change and find it difficult to match the pricing and
ease of use of Uber. Governments and Employee-Interest Groups are opposed to Ubers
classification of drivers as independent contractors because it leaves drivers exposed without
insurance or protection from Uber. There have been many reports of robbery and harassment
from both riders and drivers and complaints about Ubers lack of accountability for their users.

Analysis & Recommendations

One of the international challenges facing Uber is the risk associated with their
aggressive global expansion. Uber is already in 60 countries, despite being only 7 years old, and
is facing struggles in seemingly every one of them. It seems that it would be difficult to properly
manage going concerns in so many different regions. In order to get a better understanding of the
risk involved, weve done a SWOT analysis of Ubers rapid expansion.

Strengths
o

Uber has massive reserves of cash, totaling $4.15 billion in mid-2015, which they
can use to address to legal and regulatory problems. Uber also has the backing of
major funding efforts, totaling in over $9 billion by mid-2015. On top of their
financial resources, Uber also has the strength of a fulfilling a universal need,
there will seemingly always be people who need car rides and dont have a friend
to drive them. Taxi companies exist all over the world, which means that Uber
will have a market all over the world.

Weaknesses
o

As Uber reaches farther and farther out, their expenses also go up by huge rates.
Their GAAP expenses grew from $671.4 million in 2014 to $987.2 million by the
first half of 2015. Another weakness is that a major source of their financial
resources is the result of ongoing funding efforts which is a fragile source of
income; and if perception about Uber gets too bad, that source would disappear.

Opportunities

The biggest opportunity Uber has is their rampant popularity and their hip
perception. Most people have probably heard of Uber by now; either from huge
amounts of marketing and product placement in media, or from friends or
acquaintances who have used their services. By being in over 400 cities across the
world, Uber is has become a household name through social media. Uber also has
the perception of being a new, more attractive alternative to standard taxi
companies. Getting a ride with Uber is done simply through one app that has a
modern design; compared to standard taxi companies which often seem outdated
with their technological options.

Threats
o

Uber is facing threats in seemingly every market they enter; either being outlawed
in some countries in Europe, facing over 160 lawsuits in the United States, or
fighting through endless regulations and heavy competition in China. Uber is
having to fight through the liability of foreignness all over the world
simultaneously, leaving them spread incredibly thin.

Overall, Uber has good reason to be so aggressive in their international expansion; but we
would advise some constraint. Ubers huge cash pools and position as a household name in
countries all over the world give them a degree of safety despite being so spread out. Uber seems
likely to succeed in a multitude of new markets; and if they do happen to fail in a few of them,
they have the cash to absorb some losses. Despite these advantages, Uber is still playing a
dangerous game by expanding so rapidly. They have to fight through competition and regulation
in markets across the world; and if they cant win enough fights, then they could face financial
shortages. In the lecture notes, its said that resource view dictates that you need to use an

overwhelming amount of resources to overcome to the liability of foreignness, and it follows that
Uber could face resource shortages if theyre using large overwhelming amounts in multiple
markets. Also, if Uber starts losing lawsuits and more people are robbed using their services,
investors could back out or consumers could lose trust in Uber.
Wed recommended Uber to practice more restraint in their expansion in order to reduce
their risk of failure. Obviously, Uber wants to be as big as possible and their executives are
worried about entering markets to people who emulate Uber and other ridesharing services; but
there are currently no major competitors in the ridesharing market who are anywhere near as
globally minded. Even if someone does enter the market first, Uber does get advantages for
moving second: like fewer negotiations, less regulation, and getting to learn from the mistakes of
the first mover. If Uber was to focus less on China, where they have $1.2 billion funding, and put
those resources towards handling the countless lawsuits they have in the United States or their
banning in Europe; but handling everything at once would leave less time to handle each specific
issue optimally. A more risk-averse option that would still allow for expansion would be to
partner with local corporations or governments to help run Uber-esque services in otherwise
infeasible markets. This method would be a fair compromise for Uber, getting less revenue to
reduce their risk that would still expand their brand.
Another issue that Uber is facing as they try to expand globally is competitors in other
countries. Uber operates in 64 countries around the world, but has found it hard to break into
some of the larger markets such as China, India, Brazil and other southeastern countries. In
China, Didi Kuaidi dominates the ride sharing market, owning 80% of the market, and is
available in over 300 cities. The Chinese government and two Chinese tech companies, Tencent
and Alibaba, back Didi Kuaidi. In India, Uber faces Ola, which was founded back in 2010 and is

available in 102 cities across India. Uber is only accessible in 22 cities in India and 15 cities in
China. GrabTaxi is Ubers major competitor in Southeast Asia and can be found in countries
such as Malaysia, Singapore, Thailand, Vietnam, Indonesia and the Philippines. In Indonesia,
Go-Jek is a motorcycle taxi service, which accepts cash payments and provides helmets, jackets
and training to their drivers. A motorcycle taxi service is a necessity in Indonesia because of bad
traffic, cheaper cost and motorcycles can get customers to where they need to be quicker. Lastly,
four of the largest competitors to Uber have entered a partnership, Lyft, Ola, Didi Kuaidi, and
GrabTaxi will allow users to book cabs using each others apps.
There are a few recommendations that we would like Uber to implement as they try to
expand into these other markets. The first recommendation would be to give back to the local
community. This could be donating to a local charity, or funding a local project such as a new
school or clean water. Showing that the company cares about the community can spread good
karma, and get Ubers brand recognized by the locals. Secondly, Uber should run some type of
promotion to get people to use their app. For example, Uber can give new customers a free first
ride in these countries after they download their app. Uber can also start an incentive program
where the customers earn a free ride after using the app ten times. Having an incentive program
would attract customers who are looking a reason to try Uber instead of using their local share
riding company. Lastly, we would recommend Uber to start taking cash payments in all of these
cities. Many Asian customers do not feel comfortable using credit cards and prefer paying with
cash instead. By understanding cultural norms in Asia, Uber will be gain a larger market share
in these foreign markets.
As a result of its rapid growth and innovative technologies, Uber has generated a lot of
controversy. Uber has revolutionized transportation by introducing its ride-sharing concept.

However, because this is a new idea, it is butting heads with more traditional means of
transportation such as taxis. Additionally, Ubers tendency toward wanting to dominate the
market has led to clashes both domestically and internationally with other companies, and the
law.
Didi Kuaidi, the Chinese equivalent to Uber, is a major rival of Ubers. Indeed, Uber
spends more than $1 billion a year on the Chinese market trying to beat out Didi Kuaidi and
capture the majority of the market. One of Ubers biggest problems is that the Chinese people are
more accepting of local companies than outside companies. This gives Didi Kuaidi the home
field advantage. Additionally Didi Kuaidi is supported by the Chinese powerhouse companies
Alibaba, and Tencent. The nationalistic tendencies of the country, coupled with the
governments ability to regulate the material that citizens see makes it difficult for Uber to
capture the majority of the market. In other countries, especially those in the west, Uber is facing
stiff opposition from more traditional taxi companies. The taxi companies are complaining that
Uber does not meet the standards of a traditional taxi company; and that its services lack safety
and its drivers lack experience or proper training. An example of this is a complaint by London
based black cab drivers that Uber vehicles are not accessible to disabled people. Unlike
traditional cabs, Uber drivers are not obligated to maintain WAV or wheelchair accessible
vehicles. Another complaint is that Uber drivers in London are allowed to skip many of the
trainings that cab drivers must participate in. This includes activities such as passing a test that
shows a drivers proficiency at navigating the streets of London. In essence, Uber drivers do not
meet the high standards expected of London cab drivers, but are still allowed to operate. This has
led to conflicts and court cases against the company.

To combat these social and cultural differences, Uber must adapt its policies and
standards in different countries. In China, Uber should try to ally itself with local Chinese
companies. This will portray them in a more positive light and help them compete with the
poster child of Chinese ride-sharing, Didi Kuaidi. Additionally, Uber could use formal channels
such as lobbying the U.S. government to adopt foreign policies with China that could help them
get a leg up. In London, Uber could implement a similar test to the one taken by black cab
drivers. London based Uber drivers, or anyone wishing to operate within the city must pass the
test, which would be similar to the one already available, in order to operate there. Additionally,
Uber could add an option to their app that allows disabled customers to contact Uber vehicles
that are classified as WAV. These changes and others like them would need to be implemented
by geography. This is because some of these changes could actually have a negative effect on
business in other countries. An Uber that can adapt to the needs of each individual country is the
type of company that will come to dominate the ride-sharing market without needed to resort to
bullying and brute-force tactics and will gain them a loyal consumer market.
Uber has been facing problems with employees, contractors as they call them, with many
legal battle regarding how they are being treated as employees. These people are claiming that
Uber labels them as contractors rather than employees, but are being treated as true
employees. These lawsuits are mainly focusing on regulations, expenses, benefits and wages,
which are mainly given to employees rather than contractors. There is also a lawsuit that alleges
that Uber does not ask for gratuity from the customer since is included on the charge and tells
them to not include a tip, yet this gratuity is never received by the contractor. Uber still claims
that they are independent contractors and not employees. As doing so it takes away their
expenses reimbursements and gratuity. This kind of legal battle has been taking place in various

places throughout the U.S. such as California, Massachusetts and Oregon. The Labor
Commission of these state's claims that the company is treating this people as employees rather
than contractors and under the law the company has to reimburse their employees for expenses
that were stumbled upon working for the company. In many of the cases Uber seem to be in a
really tight spot as the law seems to be on the employees side rather than the companys. Many
have concluded that indeed Uber should be considered an employer instead of a business partner.
Take it as bus drivers or cab driver; even if they are against Uber, for example they are not
consider individual contractor but employees. Recently the company has settled with almost
384,000 people by agreeing to pay about $100 million to drivers to cover expenses. Yet in the
end Uber is settling to the payout as the company will be able to continue hiring new drivers and
keep labeling them as independent contractors.
As we can see Uber does not want to let go off the fact that the drivers they hired are not
contractor, and this will lead them into more legal battles in the future. Even though as a new
driver for Uber, it specifies that you become an independent contractor for Uber. The company
should specify what they want on a contract. Mainly state their gratuity issues since the drivers
do expect that money to be given to them. Yet we believe that Uber should consider their drivers
employees as they are being treated as such and they are being classified as such by law.

Conclusion
In conclusion we can see that Uber has a lot of potential yet there are issues that they
need to focus in order for them to succeed in the market. Overall we were able to see that the
company faces a lot of different issues depending on the country. When it came to the US there
were issues regarding employees, or independent contractor as the company calls them. Europe
and Asia is more about competition and the fact that they come for overseas and encounter the
liability of foreignness. We have suggested a few recommendations that would help out the
company. Uber has potential to become one of the best companies worldwide yet their ambitions
to acquire and be the best of all their markets is actually causing them problems. They should
stop and think more on the issues that the company is facing in order to make it work. As we see
today, there are many people that are getting more interested in the company and they are using
the application even just for curiosity. This tells us that the company has a future because it is
being used more and more.
To start with the company has legal problems where it was founded, in our opinion, is
where the company should start solving their issues. As they move overseas they would have a
stable and supportive headquarters so it might influence the other countries to trust the company
more. Then move overseas and find alternative ways to overcome the obstacles they face and
succeed on those markets. Yet they have to understand that overseas they dont have the same
advantage that they have here in the US. They want to expand and take over the markets in other
countries yet they have competitors that are older in them in these places.
The ambition of the company is good yet they have to see that its going to take time for
them to accomplish all of this; from becoming the best ride-sharing company, to overcoming
their competitor, to being accepted overseas and finally resolving their legal issues. Uber has

grown so much through the course of 8 years and look where they are they now. This should
give them a view of the things that they are able to accomplish. Its been only about 4 years since
the company has expanded overseas so they should give them more time and they should find
strategies to accomplish what they want.
Even though we didnt cover one specific issue of Uber within a country, we are able to
analyze a few issues that are currently affecting the company as a whole and a couple of them
that are costing them money at the moment. Sure they do have the money yet they should work
on a better way to expand it while benefiting the company. Uber so far is a successful company
worth billions of dollars and can be worth more and be a worldwide success as long as they have
the mindset and the patience to solve the problems placed before them, and become the best
riding sharing service available.

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