UBER IN SOUTH AFRICA NEW ROADS

Transcription

1 UBER IN SOUTH AFRICA NEW ROADS EDGE CONSULTING University of Alberta

2 ISSUE IDENTIFICATION How can Uber modify its operations to remain competitive with Zebra Cabs?

3 SOLUTION UBER IS LEKKER Increase safety Invest in South Africa Meet customer payment demands Competitive

4 Assumptions Uber / Driver takes : 70 / 30 Uber costs 30% less than traditional taxi Market is big enough for 2 competitors Car for hire market is growing at 5% per year

5 ANALYSIS Strengths Weaknesses - Entrepreneurial - Foreign Company - Uber + Uber Eats - Undercutting KEY TAKE AWAY: Major opportunities in South Africa SWOT Opportunities Threats - Economic growth - High crime rates - High use of public transport - Poor media coverage

6 CURRENT COMPETITIVE SPACE Government 3/10 Entrants 6/10 Economy 4/10 Supplier 1/10 RIVALRY 7/10 KEY TAKE AWAY: Substitutes, Social, Tech and Rivalry factors are key Buyer 4/10 Tech 8/10 Social 9/10 Substitutes 7/10

7 CUSTOMER EXPERIENCE UBER - Lower Cost - Foreign Brand - Pay without credit Think and Feel Hear Say and do See - Increased presence - Zebra has more options KEY TAKE AWAY: Customer needs - Driver safety - Taking cash now require attention - Uber may not be for me

8 CUSTOMER EXPERIENCE ZEBRA - Higher fares - Safe, proud, local Think and Feel - Company cares about customers - Listens Hear Say and do - Promote to friends/family See - South African company - Traditional cabs KEY TAKE AWAY: Expensive but positive public sentiment

9 ANALYSIS Household quintile Lowest income quintile Quintile 2 Quintile 3 Quintile 4 Highest income Quintile Total Public transport Main mode Private transport Car Walking all the Train Bus Taxi Car driver passenger way Other Total Number Percent Number KEY TAKE AWAY: Focus on the 3 lower quintiles Percent Number Percent Number Percent Number Percent Number Percent

10 ALTERNATIVES Option Consumer Driver Competition 1. Business as usual 2. Change business strategy 3. Completely withdraw

11 ALTERNATIVE 1: Business as usual PROS - No immediate cost - Economies of scale - Does not affect profit margin CONS - No adaptation - Negative public sentiment - Not addressing competition

12 ALTERNATIVE 2: Change business strategy PROS - Adapting as needed - Build up reputation - Appeal to local sentiment CONS - Cost - Implementation is important - Change management is key

13 ALTERNATIVE 3: Completely withdraw PROS - Quick - No overhead costs CONS - Loss of revenue - Strengthens competition - Not consistent with Uber strategy

14 RECOMMENDATION UBER IS LEKKER Awareness Campaign Strategic Shift Community Investment

15 IMPLEMENTATION Awareness Campaign Procure Debit machines Partner with Stores Deploy Debit Machines Implement Fare Increase Month 6 Month 12

16 IMPLEMENTATION PLAN Action Timeline Key Performance Indicator(s) Awareness campaign Uber is lekker Procure debit machines for smart phones Partner with stores for Uber Pay Card 1 3 months Current customer awareness 100% by Month 3 General awareness 60% by Month months Partnership with Cube payment system 1 6 months Available in 50% of major stores Deploy debit machines 3 12 months 100% deployment by end of year Implement fare increase 3 months + 20% fare increase by Month 3

17 OBSTACLES Impact on UBER Probability Customers Security Competition

18 MITIGATIONS Obstacle Losing customers Security of drivers and customers Competitors actions Mitigation Increase awareness Poll customers though app (1 question) Introduce panic button in app Introduce messaging in the awareness campaign Leverage economies of scale Lower fares and donate to drivers Giving back to the community

19 SUMMARY Increased safety Giving back Meeting customer needs

20 APPENDIX ZEBRA UBER Cash Women Exclusive Local Mobile App Credit in Cab Debit in Cab Cash Women Exclusive Local Mobile App Credit in Cab Debit in Cab

21 APPENDIX : MAIN MODES OF TRANSPORT 25% 5% 12% 12% 7% 6% 33% Taxi