Service Marketing Mix of Uber

Founded in March 2009 by Garrett Camp and Travis Kalanick, Uber has become the largest ride hailing company in the world. It offers its services across 90 countries and more than 10,000 cities in the world. Uber is an innovative technology brand that connects riders with independent drivers through its app. The company has enjoyed swift and excellent growth over the past several years driven mainly by its focus on innovation and affordable pricing. It uses a dynamic pricing strategy and provides different types of rides to cater to the needs of different user segments.

The company has also extended its services beyond its core ride hailing services and included Uber Freight and Uber Eats to achieve more growth. Over time, the company has been able to strengthen its competitive advantage through a strong focus on product, pricing and customer experience. Dara Khoshrowsahi is the current CEO of Uber, and the company is headquartered in SanFrancisco, California, United States. The company has experienced impressive improvement in its financial performance in fiscal 2023.

In this marketing mix post, we will analyze the seven Ps of the service marketing mix of Uber, the largest ride hailing company in the world.

Product/Service

The core product/service offered by Uber technologies Inc is taxi or ride hailing services. The company offers various types of rides to cater to the different needs and preferences of various user segments. In the ride category, it offers several types of rides including the following:

Apart from these, Uber also offers Uber Eats which is its food delivery service that allows users to order food locally from nearby restaurants through the app.

Uber also offers Uber Freight and Uber for Business. Uber Freight is a logistics platform that connects trucking companies with shippers that need freight transportation services. Uber has designed its Uber for business for corporate clients to provide employee travel solutions, meal programs and cater to other corporate needs.

The Advanced Technologies Group of Uber is focused on development of autonomous driving technology as well as aerial ride sharing through initiatives such as Uber Elevate. In this way, Uber has continued to widen its portfolio of services starting from cabs to providing food delivery, freight services and much more designed for different customer segments.

Pricing

The pricing strategy employed by Uber is a dynamic pricing strategy commonly termed as surge pricing or price surging. There are various factors that affect the prices of cab services throughout the day including demand and supply as well as a mix of other factors. It does not employ a static pricing model under which prices are fixed based on the distance to be traveled. So, charges can vary for similar trips based on the time of day, availability of cabs, level of demand and more factors like traffic.

Its dynamic pricing model uses advanced algorithms to calculate prices based on supply and demand in any given area. For example, when the level of demand is high in an area compared to the supply of cabs in that area, the prices will automatically rise leading to surge pricing. The algorithm reduces the prices as the availability of cabs in that area increases as more drivers are drawn by increased prices.

However, surge pricing does not mean that the users are always charged higher prices because the algorithm is designed to offer competitive prices in most conditions unless the demand is quite high compared to the supply. Increased prices in such a case work to increase supply and balance demand. Uber also offers promotional discounts to regular travelers. Prices also vary by the type of services utilized such as prices can be higher if you are traveling by Uber Black instead of the regular Uber taxi.

In fiscal 2023, Uber completed 9,448 million rides which was 24% higher compared to the prior year. It had total gross bookings worth $137,865 million which was 19% higher compared to the prior year. Its total net revenue in 2023 increased 17% compared to the prior year reaching $37,281 million. The company generated a positive net income of $1,887 million, compared to a net loss of $9,141 million in the prior year (Uber fourth quarter report 2023).

Placement

Uber has increased its global footprint impressively in recent years. It provides its services across 90 countries and connects riders with independent drivers across more than 10,000 cities. With Uber you can request a ride to and from more than 700 airports.

Uber has its headquarters at San Francisco, California, United States. The company has opened offices across the world in various corners as it has continued to increase its international footprint. Uber completed a total of 9,448 million trips in fiscal 2023.

Uber’s services are mainly focused on the urban areas where the level of traffic is higher and the demand for transportation is also higher. The company generates a significant part of its revenue from transportation to or from airports worldwide.

In several regions, Uber has also partnered with local entities including governments, businesses, and local transport authorities to provide seamless transportation solutions while adhering to local laws.

Promotion

As the world’s leading taxi services provider, Uber enjoys strong brand awareness in most corners of the world. The company has advanced a lot through word of mouth marketing and through referrals. It has also enjoyed its fair share of positive and negative publicity and media coverage. However, the company has been able to successfully establish itself as the largest player in the ride hailing market. The company utilizes mainly digital channels for marketing including social media channels and its own app and website.

Social media marketing features prominently in its marketing strategy since the company uses social media channels actively to promote its services as well as to offer customer service. Moreover, social media networks provide a low cost option for promotion of its services before a wide group of customers from different demographics.

Uber also ruins loyalty programs for users to engage and retain them. It also offers discounts and other loyalty rewards through its app and loyalty programs.

People

According to the 2022 annual report of Uber Technologies, the company had 32,800 employees globally and operations in approximately 70 countries and 10,500 cities. Just like any other technology company, the success of Uber technologies also depends on its ability to attract and retain talented people. To attract and retain the best talent, the company strives to establish a highly diverse work culture where people from different backgrounds can work in harmony.

The company does not focus on its own employees and their well being only but also on the independent drivers and merchants. Since it depends to a large extent on the drivers, it has also started training and education programs to promote their growth and well being and provide them opportunities of advancement. For example, it partnered with Arizona State University in 2018, and more than 5000 drivers and family members have benefitted from online programs under this partnership. The company has also partnered with leading insurance companies around the world to provide protections for independent drivers.

Processes

Consumers can avail of Uber’s services through its apps. The company has created user friendly apps that provide a seamless user experience. It depends on advanced algorithms and data and analytics to provide its app based services. The company also depends on data centers and third party cloud services for offering its services.

Users can easily book a ride with a few taps using the Uber app and can pay online cashlessly using card or UPI payments. Moreover, they are allowed to rate their drivers based on the quality of service. Apart from that, they are also provided customer service and support through the app. They can raise complaints via the app and get them easily resolved through the customer support team of Uber. Uber also onboards new drivers through the app. New rider verification and vehicle onboarding is carried out seamlessly through the app.The company uses data and analytics to continuously refine its operations and the web based application.

Physical Evidence

In this era of digital services, the need for physical evidence has diminished as everything from booking a service to payments is carried out online with the help of digital applications and processes and without any face to face interaction. However, apart from its corporate locations and offices, the company’s branding on Uber vehicles and the user friendly app etc all provide physical evidence to the quality and user friendliness of the brand.

The taxi cabs that provide the services to take riders to their destination following the booking also count as physical evidence. Uber provides its drivers the training and education required to provide services properly and to interact with passengers. Uber has also implemented some safety features for the customers like ‘share the ride’ so that one can keep his near and dear ones informed about the ride and the route.