A tactical approach at helping Uber decide on which countries to enter into
With a raving presence in over 80 countries, Uber is one the world’s most successful mobility service provider.
In this article, we are taking a tactical approach that can aid Uber’s management to decide which countries it can expand to in its upcoming plans.
Assuming, the ultimate goal for Uber is to grow revenues via expansion into different geographies.
- Profits © = Total revenue- Expenses
- Total revenue(A) = total no. of rides(x) * (price/km(y) * total distance driven(z))
- Expenses (B) = Initial setup cost*(m) + Payments(n) + Promotions(p) + others(t)
The overall focus would be to increase A and keep B as minimum as possible.
The factors taken into consideration are given a significance-rating(high/medium/low) depending on the kind of impact they might have on A/B/C.
Factors that will determine x component :
- Prospect customer base (High) : Total no. of daily + medium travelers
- Location brownie points(High) : if the city in question is a major tourist spot, connection hub (hosts major bus depots, railway stations, airports, etc.)
- Expansion avenues (Low) : services of auto, cab, ferry, bikes, etc.
- Market saturation (medium) : if there are too many service providers already present.
- No. of competitors
- % of repeat customers of those competitors
Factors that will determine component m (cost = time + money ) :
- Availability and temperament of local players : do they see cab service providing companies as job opportunities or competition (% breakup)
- Available vehicle acquisition options (ease + cost)
- Ease of governance, socio-political volatility
- Competition’s service costs
1 — Given a city name, Uber should be able to determine if it shall enter into the city :
2 — Given a set of cities, Uber should be able to prioritise which cities to enter first: The city that earns the highest rating on the below matrix should be chosen first and likewise
