Uber Technologies Inc. Overview

Uber Technologies Inc.

Introduction

Uber Technologies Inc. is an American app-based transportation platform. It is a ridesharing company that hires independent contractors as drivers. It matches riders with drivers, hungry people with restaurants and food delivery service providers, and shippers with carriers. This global ride-sharing application disrupted modern transportation as we knew it and at one point grew to become the highest-valued private startup company in the world.

It was founded in March 2009 and is headquartered in San Francisco, California. It operates in over 72 countries with over 110 million users that order rides or food at least once a month. Approximately 76% of its gross revenue comes from ride-sharing and 22% from food delivery.

Uber is best known for pioneering the ride-hailing business. It does not own any vehicles but receives a commission from each booking. Its fares which vary by using a dynamic pricing model based on local supply and demand at the time of the booking are quoted to the customer in advance.

The company operates across four segments: mobility, delivery, freight, and advanced technologies group (ATG) and its other technology programs. The mobility segment includes ridesharing services, Uber for business (U4B), financial partnerships, transit, and vehicle solutions offerings. The delivery offer allows consumers to search for and discover local restaurants, order a meal, pick up at the restaurant or have the meal delivered. The freight segment connects carriers with shippers on its platform giving carriers pricing and the ability to book a shipment. The ATG and other technology programs segment are responsible for the development and commercialization of autonomous vehicles and ridesharing technologies.

It acquired Silicon Valley startup Otto and incorporated its hardware and software systems into a self-driving truck, which then successfully delivered 50,000 cans of Budweiser, demonstrating the viability of autonomous trucking. CEO Travis Kalanick’s vision is that Uber would operate a fleet of autonomous trucks that could deliver goods anywhere and anytime.

Though the journey has not been easy, Uber remains a major company in the ride-sharing space. Uber has been so prominent in the sharing economy that commoditization of service industries using computing platforms has been referred to as Uberisation, and several startups have described their offerings as “Uber for X”.

Types of Uber rides

Despite the fact that Uber Technologies Inc. is now one of the world’s largest ride-hailing apps, it wasn’t always this way. At first, the company only offered a single type of ride but now with expansion and growth, so have the offerings.

Uber offers a variety of cars ranging from standard to luxury. Having options to choose from makes it possible for you to request a specific type of ride based on your personal preference.

Here are the different rideshare options available:

UberX: Uber X is the standard Uber ride and the most common Uber ride option for riders. The cars under this service are typically sedans, such as Honda Accord, the Mazda3, Chevy Impala, Ford Fusion, and many others. This car transports 1-4 passengers excluding the driver and is available in most destinations globally.

UberXL: UberXL is suitable for transporting five to six people. It comes in a minivan or SUV such as Ford Explorer, Honda Pilot, Hyundai Santa Fe, among others. It is also an excellent choice for someone with a lot of luggage, or someone looking to sprawl out a bit during the trip.

UberPool: UberPool is basically modern-day carpooling. If you request an UberPool, Uber will compare active routes in the area. If another rider is in the same general area or headed in the same direction, Uber combines your ride and splits the bill between the two of you. Compared to UberX prices, riders that use UberPool usually save about 40% to 55% off on a single ride.

With this ride, there are several pickups around the way and it takes a little longer due to the pickups and drop-offs. Also, you cannot change your destination so that the driver can know how to schedule his pickups and drop-offs.

UberPool also has a passenger restriction. Riders that request the service are only allowed to bring one other person with them. This rule is put in place to ensure there is enough room for everyone during the trip.

Uber SUV: Uber SUV is basically a fancy version of the UberXL as it uses luxury SUVs to get your crew to your destination. It gives you the feeling of riding with class as you are picked up with high-end vehicles such as Cadillac Escalade, Infiniti QX80, Lincoln Navigator, and Hummers. The interior and exterior should be black and in excellent condition. This ride is also significantly more expensive than other common Uber rideshare services.

Uber Black: Uber Black is another luxury ride that sits up to 4 passengers. It is suitable for classy events and helps you make a lasting impression. It comes with cars such as Maserati Quattroporte, Lexus LS, Mercedes-Benz E-Class, and the like.

It is not as expensive as Uber Black SUV but it is still notably expensive.

Uber Select: This is a type of luxurious UberX. It is known as Uber Plus in some locations. The rides come in luxury sedan models such as BMW, Audi, Mercedes, Cadillac, and the like. The vehicles should also have leather or vinyl interior. It is affordable but more expensive than the usual fare price.

Uber Express Pool: Uber Express Pool is basically an Uber pool without door-to-door service. When you request and confirm a ride, you’d have to wait for your pickup spot, you then walk to your pick-up spot and get dropped off at a select drop-off spot close to your destination. This is Uber’s most affordable option.

Uber Lux: Uber Lux is the most expensive Uber ride option. It features only the crème de la crème of the luxury cars in the market with vehicles such as Mercedes-Benz S-Class, Audi A8, Porsche Panamera, and Lexus LS, among others. All vehicles used in the Uber Lux service must be considered full-size luxury vehicles.

Uber WAV: Most Uber cars are not suitable for wheelchairs or mobility scooters. In selected cities, riders who use motorized wheelchairs or scooters can request a wheelchair-accessible vehicle (WAV). WAV drivers are certified by a third party in safe driving and assisting persons with disabilities. The ride also costs the same as it would on an UberX, the standard ride option.

Some additional types of Uber rides include Uber car seat, Uber Ski, and Uber Pet.

How does Uber Technologies Inc. work?

Uber uses your smartphone to connect drivers and riders. Its smartphone app takes care of the entire ride-hailing and payment process. You can also use your credit or debit card to pay right in the app, with no need for cash.

You must be 18 years or older to have an Uber account and use the service. In the U.S, Uber drivers must be at least 21 years old, have at least one year of licensed driving experience, and drive an acceptable four-door vehicle.

In cities where Uber operates, you can use your rider app to request a ride. After installing the app on your smartphone, you’ll provide information about the credit card you plan to use to pay for the rides, so you never need to bring or handle any cash except if you want to tip with cash.

When selecting a ride, you can use the app to tell Uber your pickup location. After picking your ride option, Uber will locate drivers in your area, find a driver for you and tell you how many minutes away your driver is. Once the ride has arrived, Uber alerts you and the app will also show you the driver’s details, such as name, photo, and type of car so you know what to look for.

After the ride, the app handles the payment and the app will ask you to rate your driver on a scale of 1-5 (politeness, safety, and cleanliness). Uber pays close attention to these ratings. Drivers are also asked to rate riders. Uber’s feedback system is designed to foster a community of respect and accountability for everyone.

Features

If using the Uber app, there are several features that are designed to make sure your ride goes as smoothly as possible. Some of these features are;

SHARE YOUR TRIP: This is a function that you can use to make sure your friends and family always know where you are. When you request a ride or during a trip, simply swipe up and you’ll see a send status option- this creates a notification with your driver’s name, vehicle name, and location which you can share with your friends and family.

MULTIPLE DESTINATIONS: This feature allows you to add extra stops along your route. It lets you easily pick friends on the way and then drop them home again without any hassle. You can add up to two additional stops either when a ride is requested, or while you are on your journey.

SCHEDULED RIDES: This feature helps you book your ride up to 30 days ahead of time. When requesting a ride, just make sure to use the clock to set your preferred pick-up time and location, as well as your destination and the type of ride you want. You can still reschedule or cancel it up to 15 minutes before your ride. You will also be sent a reminder on the day.

SPLIT FARE: This feature helps you divide the fare amount with up to three people directly in the app simply by tapping your selected payment method and then choosing ‘Fare Divide’.

FARE ESTIMATE: You can find out roughly what your trip will cost before you request. Just select your pickup location, enter a destination and tap Fare Quote- the app will calculate an approximate amount based on the expected time and distance, so there are never any surprises on your receipt.

Challenges faced by Uber Technologies Inc.

From being banned from airport curbs to increasing operational risks, it is not shocking to learn that Uber Technologies Inc. is facing quite some challenges as it grows.

Classification of drivers: Uber has faced the continuous challenge of whether they should be classified as employees or independent contractors. Uber maintains that its sole function is to connect drivers and passengers. This helps the company in the sense that, it can start operating in new markets easily and doesn’t need to concern itself with employer-employee laws and the related responsibilities and obligations, the company also isn’t obliged to pay Social Security taxes, unemployment insurance, or worker’s compensation and it is not required to reimburse drivers for mileage.

Some drivers also welcome the freedom and flexibility that comes with not being an employee however other Uber drivers complain about being treated as independent contractors, their working conditions, and the earnings that often amount to less than minimum wage. The company has even had major class-action lawsuits launched by drivers in Massachusetts and California.

Tax issues: If Uber loses its status as a technology company and instead is classified as a livery company, governments can argue that the entire ride payment is revenue for Uber and subject to city and state taxes.

Uber is already faced with complaints from various governments that it shirks its tax liabilities onto its drivers and that the drivers are often non-complaint about paying their taxes. More tax legislation could exacerbate the problem and will also mean either an increase in ride fares or the end of Uber operations in that particular city or state.

Security: This is one of the biggest challenges being faced by Uber as new reports are made frequently on sexual assaults, trafficking, and car crashes. The company is trying to curb this by also frequently including new safety measures such as background checks on drivers, emergency help, RideCheck, and auto insurance.

Uber bans: In various countries, Uber is outright forbidden while in some others, there is a call for regulation in the industry or for the governments to declare the car-sharing app illegal.

Risks of International expansion: As Uber continues to expand outside of the United States, it also increases its operational risks. With more reliable and cheaper service abroad than in the U.S, it seems unlikely that there is a strong market for Uber abroad. As the company expands and is met with governmental opposition, protests, and cheaper alternatives, it will find it harder to get drivers to compete against established taxi companies.

Sustainability

Recently, the rise of climate crises has driven a shift in the global market, shifting industries’ focus to sustainability. In 2020, Uber announced global commitment to becoming a zero-emission mobility platform by 2040. Since sustainable businesses has become the new norm, many businesses are working on ensuring they fulfill at least one of the SDGs. Consumers are also partaking in the drive for more sustainable businesses.

One of the ways Uber pursues sustainability is with its Uber Green ride option. By choosing Uber Green, you are helping to make your city more sustainable as each Uber Green trip is done in a hybrid or electric vehicle which produces at least 25% fewer carbon emissions than the average trip.

Studies have also shown that carpooling in ride companies such as Uber is better for the environment as it reduces less gas emissions.

Finances & Funding

Since its launch, Uber Technologies Inc. has raised a total of $25.2 Billion in funding over 32 rounds. Their latest funding was raised on September 14 2020 from a Post-IPO Debt round. The company is funded by 116 investors. PayPal and Asas Capital are the most recent investors.

Uber has made 22 investments, with their most recent investment being made on December 6 2021, when Serve Robotics raised $13 Million. The company has also acquired 13 organizations. Their most recent acquisition is Drizly which was acquired on February 2, 2021 for $1.1 Billion.

Uber’s revenue as at 2021 was $17.46 Billion, a 56% increase year-on-year and better than its 2019 figures. Its Total assets were $38.77 billion and Total equity, $1.27 Billion.

The company’s Market Capitalization as of September 2022 is $58.35 Billion. This makes Uber the world’s 244^th most valuable company by market Capitalization.