WHY IS UBER WINNING THEIR COMPETITION ?
Uber or Uber’s rivals – Find the industry’s most powerful player. Although first-mover advantage is advantageous at first, it is not necessarily sustainable.
Have you used Uber before? What are your thoughts on its business model and the competition from Uber? As a driver and as a third-party spectator, does it appear to be a profitable venture? Let us assist you by discussing this business venture and finding answers to these issues if all of these inquiries result in confusion or ambiguous responses.
Uber, for example, is known for bringing in innovative and new ideas to the market. This company pioneered the concept of ride-sharing, which is now employed by a variety of local and international businesses all over the world. “Sometimes freedom from regular rules is what provides you competitive edge,” says Reid Hoffman. As a result, this one-of-a-kind approach could be deemed a competitive advantage for the company. But not after everyone else had copied it.
Uber’s business strategy is unique, and it has achieved a lot of success in a short period of time. However, it is no longer the sole ride-sharing company in operation. In this post, we’ll go through Uber’s business strategy and how competitors are losing market share to the company.
Let’s start with a quick overview of the firm and its competition so we can see why Uber is outperforming its competitors.
BRIEF INTRODUCTION OF UBER:
In 2009, an American startup was founded that pioneered the concept of peer-to-peer ridesharing. It began as a taxi service and then evolved into a peer-to-peer ride-sharing business that can be hired through a smartphone application. Garrett Camp and Travis Kalanick proposed and launched the company. Uber has thus far expanded to 63 countries, serving more than 780 cities.
Uber has developed a meal delivery service in response to its widespread success in other parts of the world, particularly the United States, and the company is profiting from it in the local US market. The number of Uber users globally has surpassed 110 million. It emphasises the clients’ strong acceptability. Uber has a 69 percent market share in the ride-sharing business in the United States, with Uber competitors accounting for the remaining 31 percent.
In 2019, the company that began as a private corporation became a public company. The firm’s first initial public offering raised money for it, but since then, Uber has been losing money, causing concerns for the stockholders who bought into the company during the IPO.
BUSINESS MODEL OF UBER AND UBER COMPETITORS:
We’re confident that almost all of you have a basic understanding of how Uber works. Passengers order rides with a mobile application. In exchange for the money, the driver closest to the passenger picks them up and leaves them off at their destination. Uber is less expensive than taking a cab. As a result, it is becoming increasingly important in the transportation business.
Uber hires contract drivers on the supply side. People who want to make money by driving go to Uber’s offices, meet the company’s requirements, and gain access to the company’s mobile application, which allows them to find riders and earn money.
Not everyone is eligible to work for Uber as a driver; you must meet specific criteria, including vehicle safety and availability of a driver’s licence, before being approved.
As soon as the riders and drivers accepted this business model, more companies with the similar business strategy began to enter the market. Lyft, Ola, Careem, Didi, Taxify, and Yandex Taxi are just a few of the biggest Uber competitors around the world. All of these companies are based on the ride-sharing and peer-to-peer model.
Apart from ride-sharing vehicles, personal mobility choices and self-driving vehicles are also a threat to Uber and other market competitors. Aside from all of these competitions, traditional cab services are one of the most important things that none of these ride-sharing firms can overlook. Traditional taxi services still account for a major portion of this industry’s revenue.
WHAT ARE SOME OF THE FACTORS MAKING UBER PROMINENT FROM ITS COMPETITORS?
Even when we’re talking about another ride-sharing company, most of us still refer to Uber. How many times have you mistakenly done something like that? You’ll be surprised that you weren’t even aware of this inadvertent error if you start counting. So, what makes Uber stand out among Uber competitors in our minds? In this part, we’ll go over these considerations.
1 – ADVANTAGE OF THE FIRST MOVER:
People with a marketing background are familiar with the concept of the first-mover advantage. That first-mover advantage has come into play in the case of Uber and Uber competitors. For those unfamiliar with the word, it is a basic term that describes the advantage that the first entrant in a market has over the remaining participants.
“The Internet moves very fast. In the old world, we could afford to sit and analyze forever. But in the new world, the first mover has the advantage.” — Raymond Kwok
When it comes to technology, the importance of having a first mover advantage increases even more. Some of the benefits of being a first-mover include capturing the majority of the market share without having to compete, increased odds of user acceptance, and the likelihood that our brand name will remain in the minds of consumers indefinitely. Furthermore, because you are the first, most customers can relate to your brand. This makes creating brand loyalty easier.
As a result, Uber’s entry into the market as the first player received all of these advantages, and this is why Uber’s competitors have been unable to detract from its image, despite the fact that the company has been losing money for the previous few months. However, as Reid Hoffman points out, “First mover advantage goes to the company that scales up, not the one that starts out,” and Uber has been unable to preserve that advantage.
2 – THE COMPETITION PERSPECTIVE:
Another thing to note is that when discussing Uber and Uber competitors, the perspective of competition differs. Other ride-sharing companies, as well as cab services, are certainly competitors for Uber.
Uber has consistently surpassed cab services since its inception, which is why it has dominated the industry. When it comes to competition in the ride-sharing market, however, some of the nations where Uber began operations have forced the company to relocate. One of the best examples is China, where one of Uber’s competitors drove it out of business.
3 – EXTREMELY EXCESSIVE MARKETING:
Uber, as one of the transportation industry’s behemoths, can afford to sell its services effectively. This increases the company’s share of mind among customers, increasing the likelihood of them using it. Local Uber competitors that cannot afford to run large marketing frequently lose market share. It’s useful in the short term, when Uber is actively selling its services.
However, as Uber’s competitors have matured, marketing costs have been less of a concern for the company. Furthermore, even for Uber, tackling the competitive efforts made in aggregate by all of the tiny companies operating in the local market becomes tough.
4 – CONVENIENT SERVICE PROVISION:
Uber and Uber rivals’ services are simple to use in comparison to traditional taxi services. In just a few clicks, your car may be with you in minutes. Furthermore, due of the company’s strong check and balance in these areas, the quality of the car, service, and safety features are all fully maintained.
This is, nevertheless, a crucial consideration for all of the ride-sharing systems now available. As a result, it can only be regarded a complement to the traditional cab services that once dominated the market.
5 – KEEPING PRICES LOW:
Uber was rumoured to be subsidising rides until recently. This was done to ensure that clients become accustomed to the service and became loyal, hence displacing taxi services. The company’s approach was intended to limit the appeal of taxi businesses in the industry. Once the firms or individuals who are losing money quit the industry, the way is free for Uber to become a monopoly.
Although half of the consequence of this action was seen, the public switched from taxi services to ride-sharing services, it still did not achieve monopoly status due to the emergence of new players. As a result, this strategy of keeping rates low can be considered one of the ways to outclass cab competitors, although it has not performed as intended.
HOW HAS UBER OUTPERFORMED ITS COMPETITION?
The answer, in our judgement, is a resounding no. The key reason for this response is local competition in the ridesharing business. You can see that the players who aren’t Uber are gaining a lot of traction. In reality, the industry’s customers are not brand loyal. They can switch between services without incurring any further charges. This low cost of switching actually tarnishes Uber’s reputation as the industry’s pioneer.
Customers appreciate a company that is inexpensive, whether it is Uber or one of its competitors. Clients have clung to this point, and they are using it on Uber as well, as this was the purpose of capturing the initial customers from the cab sector.
Uber entered the market with a fresh and innovative concept. It gave clients more convenience and decreased expenses. As a result, this model and the company’s services were accepted. However, the introduction of competitors using the same business model as Uber has caused to lose market share, and as a result, it has not been able to maintain the monopoly that would have allowed it to make exclusive revenues.
What do you think some of Uber’s main competitors are? Which of these rivals is your favourite, and why? Please share your own experiences so that we may gain a better understanding of how the competition operates in the industry and how customers view the various services that the competitors provide.