2. • Course Title: Marketing Management
• Course Instructor: Mam Samra Malik
• Presenter:
Sajid Sharif
33-MB2.5-18-33
3. Agenda:
• About
• How Uber Works
• Uber Offerings
• Pricing Strategy
• Type of pricing strategy
4. About
• Uber is a transportation network company (TNC) headquartered in San
Francisco, California.
• Uber is not a casual transport company but a software.
• Uber offers services including peer-to-peer ridesharing, ride service hailing,
food delivery, and a bicycle-sharing system.
• The company has operations in 785 metropolitan areas worldwide.
5. Background:
• Founded in March, 2009 as UberCab.
• Founders: Garrett Camp & Travis Kalanick.
• Originally a private car service for executives.
• Communication through emails and codes.
• Started growth in 2010.
• Use technology to bring together passengers and drivers.
6. How Uber Works.
• Uber is a technology platform. Our smartphone apps connect driver-partners
and riders.
• Booking of ride through an Uber app using Internet.
• Pickup Location and destined location can be set on the app.
• Near by drivers can be seen on the app.
• Estimated time and information about the driver can be seen on app.
• In other countries fare can be paid by credit cards as well.
• In Pakistan it is paid by cash.
9. Facts and Figures(Statistics):
• 75 Million riders and 2 Million drivers
• 10 Billion Trips completed world wide.
• Operational in 65 countries and 600+ cities worldwide.
• 15 Million trips completed each day.
• 0ver 16000 employees at Uber as of 2017.
• Uber launched in Pakistan in March,2016.
14. Customer Classification.
• UberX– Least expensive (economy customers) .
• UberXL –For larger groups (moderate customers).
• UberBlack–Black town cars only (roughly 35% higher fares); Targeted customers
who could not afford a full-time driver, but who wanted more luxurious
transportation than a taxi.
• UberSUV–Worked well for large parties; priced higher than UberBlack.
• UberTaxi–Connected users with a regular taxi.
15.
16. Uber in Pakistan
In Pakistan Uber has these types of vehicle rides which are available.
• Moto- Affordable Motorcycle rides
• Auto- Auto rikshaws
• Mini- Affordable Compact rides without AC
• UberGo- Rides with AC
• Now a days in Pakistan Uber is running a campaign for empowering Pakistan’s Passion
for Cricket starring “Sana Mir”
“Har Ball hai Opportunity”
#HarBallHaiOpportunity
17. Fare Structure for Uber in Multan
Fare for uberMOTO
• Base fare Rs. 25
• Per KM Rs. 6.85
• Per Minute Rs. 1.65
• Minimum Fare Rs 40
Fare for AUTO
• Base fare Rs. 45
• Per KM Rs. 5.00
• Per Minute Rs. 1.15
• Minimum Fare Rs 50
Fare for UberMini
• Base fare Rs. 60
• Per KM Rs. 5.00
• Per Minute Rs. 2.50
• Minimum Fare Rs 70
18. Pricing Strategy Type:
Pricing strategy is a huge element of an overall marketing strategy.
Uber use a dynamic pricing system often called "surge pricing.
Dynamic pricing, also referred to as demand pricing, or time-based pricing is a
pricing strategy in which businesses set flexible prices for products or service
based on current market demands.
19.
20.
21. Surge Pricing
• When prices are surging, you'll see a multiplier to
the standard rates on the map.
• Surge pricing is a tool that Uber uses to maximize
the potential of their industry’s relative supply-
and-demand.
• For example, you might see surge at 1.8x or 2.5x.
This is how much your base fare will be multiplied
by, so a fare that is usually $10 would be $18 when
it's at 1.8x Surge.
22. How Uber’s
Surge Pricing
Operated
• Fares calculated according to algorithms, which
helped match supply with demand
• Higher prices during peak usage/demand
• Fares continually adjusted (+/-seven or eight times
the normal Uber rate)
• Benefited passengers by incentivizing drivers to
make more pickups
23. Why surge
pricing is used?
• Uber states that this policy exists in order to get
more drivers on the road during times of peak
activity, helping meet instances of higher
demand.
• Furthermore, the surge pricing is supposed to
help moderate the demand for rides, as some
riders will choose to wait (or move to a different
area) if the pricing is higher than they want to
pay.
24. Pricing
Concepts to
Support Uber’s
Pricing Model
• Perceived Value: Uber is reasonably priced
compared to the “next best alternative”, creating a
True Economic Value
• Price Customization: To control supply/demand,
pricing will fluctuate to during peak hours.
• Price Sensitivity: Moving to quoted prices
(without mention of “surges”) should reduce any
price sensitivity
25. Factors
Challenging
Uber’s Pricing
Strategy
• Regulators & Legislators
• Strict guidelines regarding passengers, fare
structure, appearance of vehicles
• Competition entering the market (Lyft, Careem)
• Psychological effects (customers thinking they are
getting “ripped off” during peak demand
• Ridership demand decreases (7% -27%) during
price surges
• With close competition (from Lyft, Careem), and
customer “friction”, surge pricing is becoming
problematic.
27. Uber’s
Profitability
2018 Financials
• $11.3 billion (gross bookings 1st Quarter 2018)
• $12.0 billion (gross bookings 2nd Quarter 2018)
• $11.3 billion (net revenue –Y,2018 Uber’s share)
$2.6 Billion Revenue in 1st Quarter of 2018-
Profit $2.5 Billion
$2.8 Billion Revenue in 2nd Quarter of 2018
But lost 891 Million
28. Uber’s
Profitability
Is Uber’s Pricing Strategy
Sustainable?
• Although Uber has yet to make a profit, there
losses are historically decreasing annually
• As the company grows, overhead will become less
expensive
• Even now on updating the app they do not show
the multipliers and just show quoted prices but
still customers create problem.
