Uber uses different pricing models including flat fares and surge pricing that adjusts prices based on supply and demand, and has expanded into various delivery services; the ride-hailing market in China saw competition between Didi and Kuaidi that eventually merged as Didi outcompeted rivals; the document discusses questions about Uber's pricing models and strategies for balancing global standardization with local adaptation in different markets like China.

2. How Does Uber Work?
UBER RIDERS UBER DRIVERS

3. Pricing Model
• Flat fares – charged for direct trips between specified
locations at a fixed rate
• Base fare plus fare-per-mile and fare-per-minute when
the car is not in motion, similar to the way taxis
calculate fares.
• Surge pricing, the most controversial model, is designed
to balance supply and demand in real time by adjusting
prices accordingly.

4. Product Extension
• UberRush
• UberBoat
• UberEat
• UberKitties
• UberChopper

5. The Ride-Hailing Market in China
• Demand for Taxis Outruns Supply
• The Rise of Ride-hailing Apps
• Kuaidi , Didi , and Didi Kuaidi
• Head-to-Head: Didi vs. Kuaidi
• From Foes to Friends
• The Race Between Uber and Didi
• People’s Uber—a Localized Trial
• Didi Kuaidi Responds—an Eye for an Eye
• Uber’s Local Partner
• Specialised vs. Inclusive Services

6. How attractive was the taxi industry
(before uber and ride- hailing
players entered the market)?
• Ans:- Before Uber and other ride-hailing players entered
the market, the taxi industry was an attractive industry for
several reasons.
• The taxi industry was a highly regulated industry with
high barriers.
• The taxi industry provided a necessary service for
customers who needed transportation but didn't have
access to a car or public transportation.
• The taxi industry had a low level of technological
disruption.

7. 2. What is uber's value
innovation ? how did it create
a blue ocean?
• Ans:
• Uber's value innovation is centered around its ability to
disrupt the traditional taxi industry through its ride-
hailing platform and innovative business model.
• Uber's ride-hailing platform uses technology to match
riders with nearby drivers and provide a more
convenient, affordable, and reliable alternative to
traditional taxis.
• Uber has also focused on low cost by using dynamic
pricing algorithms to adjust prices based on supply and
demand.

8. Cont’d
• Uber created a blue ocean by disrupting the
traditional taxi industry through its innovative
business model and use of technology.
• Before Uber, the taxi industry was characterized by
high prices, inconsistent service, and limited
availability
• By offering a differentiated value proposition that
combined lower prices, higher quality service, and
greater convenience, Uber was able to create a
blue ocean in the ride-hailing market.

9. Q 3-How does creating and maintaining competitive
advantages in a platform business like Uber's differ
from a vertical chain business like a taxi company?
Uber takes very
small
commission
ranging
between 5 to
20%.
Cost leadership
advantage is
working in the
favour of Uber.
By adding convenience
to the services, the
brand has been able to
generate a higher level
of popularity and a
better brand image.
Technology-based
differentiation.
Customer
convenience
became a point
of
differentiation.

10. Question 4: What should Uber do
regarding its surge pricing model? Would
you keep the surge pricing model?
Why/why not?
• The surge pricing model is a dynamic pricing strategy that Uber
uses to balance supply and demand during peak hours.
• Being criticized by some riders as being unfair and unpredictable.
• Some actions that can be taken by Uber to solve major problems
associated with surge pricing includes:
1. Putting a cap on the surge multiplier: reasonable cap of 5X.
2. Reducing the frequency of price fluctuations.
3. Remarketing as “ reliable rides with shorter wait times during
higher demand”.

11. 5 a.) Comparing the
screenshots of Uber’s
and Didi’s App interface,
would you agree that
Didi needs to be more
focused on its servicing
offerings, instead of
over-diversification?
Why/Why not?

13. • Initial Value Proposition
• Uber China - Uber entered China and set out to provide an
outstanding service experience and a variety of high-end vehicles
as an important part of its service offerings. Uber targeted
somewhat extreme customer segments (high end) because it did
not want to cause trouble with Chinese taxi unions.
• DiDi - Offers a simple ride service for groups of customers who rely
on taxis because they do not have cars. Therefore, from the
beginning, DiDi started by targeting the demand that could
substitute taxis. These customer segments did not overlap with
Uber. DiDi chose a strategic position focused on satisfying these
customers’ needs.
• DiDi in the coming years focused on the needs of the
customers which proved to be the right decision as there
was different kinds of needs in the Chinese mobility
market unlike Uber.
• Yes DiDi’s interface can be confusing but this strategy
worked in DiDi’s favour.

14. b.) Would you agree with Uber’s argument that
advanced booking model in the ride-hailing
market? Why or why not?
Advantages of advanced booking model:
•Riders: can plan their trips in advance and ensure that they have a
ride when they need it.
•Drivers can also plan their schedule and workload better, leading to
increased efficiency and reduced idle time.
•The advanced booking model can help reduce surge pricing during
peak hours, as riders can book their rides ahead of time.
Disadvantages of advanced booking model
•The advanced booking model may not be suitable for all riders, as
some people prefer the flexibility of being able to request a ride on-
demand.
•It may also be challenging to predict the exact pick-up time, leading to
inconvenience for riders if the ride arrives too early or too late.
•The advanced booking model may not work well in markets with high
demand fluctuations or where ride-hailing services are relatively new.

15. Q 6 How did Uber balance global standardization and local
adaptation? What do you think about the initiatives/products
Uber developed in China?
● Uber has successfully balanced global standardization and local adaptation
by adopting a strategy of "think globally, act locally.
● Uber has adapted its services to local markets by tailoring its marketing,
pricing, and service offerings to meet the needs of customers in different
regions.
● In China, Uber faced fierce competition from local ride-hailing company Didi
Chuxing.
● Overall, Uber's approach to balancing global standardization and local
adaptation has been successful, as evidenced by its growth and success in
various markets worldwide.