Uber’s mission statement is to ignite opportunity by setting the world in motion.
Aspect
Description
Analysis
Mission Statement
“To ignite opportunity by setting the world in motion.”
Uber’s mission is concise, focusing on enabling opportunities and global mobility, reflecting its role as a market disruptor in the transportation industry.
Business Model
Uber operates as a two-sided marketplace connecting drivers and riders through a user-friendly platform. It generates revenue by collecting fees from gross bookings.
The platform model simplifies transportation, offering convenience and efficiency to riders while providing income opportunities for drivers.
Uber Eats Expansion
Uber has expanded its business model to include Uber Eats, a three-sided marketplace for food delivery connecting restaurants, customers, and delivery drivers.
Diversification into food delivery demonstrates Uber’s adaptability and ability to leverage its existing technology and network.
Market Disruption
Uber revolutionized the mobility industry through ridesharing, introducing a new way of transportation. It created a market and expanded its services globally.
Uber’s innovative approach to business disrupted traditional taxi services, reflecting its ability to change market dynamics.
Network Effects
Uber leverages network effects, where the platform becomes more valuable as more drivers and riders join. It has established a massive global user network.
Network effects drive Uber’s growth, creating a self-reinforcing cycle of increasing value as the platform attracts more participants.
Moonshot Thinking
Uber embraces moonshot thinking, setting ambitious goals that are at least 10 times greater than conventional goals, fostering innovation and bold strategies.
Moonshot thinking encourages creative problem-solving and challenges Uber to push boundaries and achieve extraordinary goals.
Core Elements
Uber’s foundation includes a massive network, advanced technology, operational excellence, and deep market knowledge, crucial for its global success.
These core elements empower Uber to deliver reliable and efficient transportation solutions across diverse markets.
Cultural Norms
Uber has established eight cultural norms guiding its actions and decisions, emphasizing values like customer obsession, ownership, and boldness.
These norms shape Uber’s corporate culture, driving its commitment to customer-centricity, accountability, and innovation.
Market Potential
Uber recognizes significant growth potential, with only 2% of the population in the 63 countries it operates in. It aims to expand further globally.
Uber’s expansion opportunities indicate its intention to capture a more substantial share of the global mobility market.
Challenges and Future
Uber has faced challenges related to regulation, competition, and public perception. Its future lies in continuous innovation and expansion into new markets.
Overcoming challenges requires Uber to stay adaptive, customer-focused, and responsive to evolving market dynamics.
Table of Contents
A short analysis of the Uber business model
Uber is a two-sided marketplace, a platform business model that connects drivers and riders, with an interface that has elements of gamification, that makes it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.
Uber’s business model has become one of the most mentioned in the business world, as it managed to change the way mobility works.
While Uber still represents a small percentage of the global mobility market, it is still an incredible case to look at.
When you build a new industry, market, and a whole new business model, you need to tweak it over and over to find a balance, which aligns value creation, with value capturing.
Uber now has expanded and stretched its business model, via Uber Eats.
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner, and a customer with the Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay the small delivery charges, and at times, cancellation fees; Drivers earn through making reliable deliveries on time.
Moonshot thinking is an approach to innovation, and it can be applied to business or any other discipline where you target at least 10X goals. That shifts the mindset, and it empowers a team of people to look for unconventional solutions, thus starting from first principles, by leveraging on fast-paced experimentation.
Our mission is to ignite opportunity by setting the world in motion.
The ambition of Uber’s business strategy emphasized first creating a whole new market (ridesharing).
And then take over the mobility market itself.
As pointed out in its financial prospectus Uber “just got started” with only 2% of the population in the 63 countries where it operates the company looks to expand further.
Several factors drove the Uber phenomenon.
In the letter to shareholders in 2019, CEO Dara Khosrowsha pointed out how Uber got there and where’s going next!
Source: Uber Financial Prospectus
The foundation of the Uber platform moves around a few key elements:
Massive network: consists of tens of millions of Drivers, consumers, restaurants, shippers, carriers, and docklesse-bikesand e-scooters, as well as underlying data, technology, and shared infrastructure
Leading technology: proprietarymarketplace, routing, and payments technologies
Operational excellence: extensive market-specific knowledge to rapidly launch and scale products in cities
And product expertise: contextual, intuitive interface, continually evolving features and functionality
That’s how Uber brings people from point A to point B, which is the unit of the Uber business model.
Based on its mission Uber formulated eight cultural norms:
We do the right thing. Period.
We build globally, we live locally.
We are customer obsessed.
We celebrate differences.
We act like owners.
We persevere.
We value ideas over hierarchy.
We make big, bold bets.
Key Highlights
Platform Model: Uber operates as a two-sided marketplace, connecting drivers and riders through a user-friendly interface. This platform model facilitates transactions and interactions between the two sides.
Revenue Generation: Uber earns money by collecting fees from the gross bookings made through its platform. This includes a portion of the fare paid by riders for each trip. Additionally, Uber’s expansion into Uber Eats adds a new revenue stream by connecting restaurants, customers, and delivery drivers.
Market Disruption: Uber revolutionized the mobility industry by introducing ridesharing, changing the way people think about transportation. Its ability to create a new market and then expand its services reflects its innovative approach to business.
Expansion: Uber has extended its platform model to Uber Eats, creating a three-sided marketplace for food delivery. This diversification leverages the existing technology and infrastructure.
Network Effects: Uber has harnessed the power of network effects, where the value of the platform increases as more drivers and riders join. This has allowed Uber to establish a massive network of users globally.
Moonshot Thinking: Uber embraces moonshot thinking, setting ambitious goals that are at least 10 times greater than conventional goals. This approach encourages innovative solutions and pushes the boundaries of what’s possible.
Bold Mission: Uber’s mission is to “ignite opportunity by setting the world in motion.” This overarching goal has guided the company’s strategies and expansion plans.
Market Potential: Despite its global presence, Uber recognizes that it still has significant growth potential. With only 2% of the population in the 63 countries it operates in, Uber aims to expand further.
Key Elements: Uber’s success is built on a foundation of a massive network, advanced technology, operational excellence, and a deep understanding of local markets.
Cultural Norms: Uber has established cultural norms that guide its actions and decisions, emphasizing customer focus, global-local approach, accountability, and a willingness to take bold risks.
Value Proposition: Uber’s core value proposition centers on providing convenient and efficient transportation solutions for riders while offering income opportunities for drivers.
Challenges and Future: Uber has faced challenges related to regulatory issues, competition, and public perception. Its future lies in continuous innovation, adapting to changing customer needs, and expanding into new markets.
Uber is a two-sided marketplace, a platform business model that connects drivers and riders, with an interface with gamification elements that make it easy for two sides to connect and transact. Uber makes money by collecting fees from the platform’s gross bookings.
As of 2022, on net revenues of $31.87 billion, Uber posted a net loss of $9.14 billion. In 2021, Uber posted a lower net loss ($496 million), primary thanks to the business divestitures of various assets. Throughout its history, on an annual basis, Uber has never made a profit. Yet, it has also shown incredible business growth, over the years, with its revenue at $3.8 billion in 2016, to almost $32 billion in 2022.
Uber Eats is a three-sided marketplace connecting a driver, a restaurant owner, and a customer with the Uber Eats platform at the center. The three-sided marketplace moves around three players: Restaurants pay commission on the orders to Uber Eats; Customers pay small delivery charges, and at times, cancellation fees; Drivers earn through making reliable deliveries on time.
For the first time since its inception, Uber Eats’ EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) – which measures a company’s operational efficiency – was positive for $551 million, compared to negative $348 million in 2021; negative $870 million in negative EBIDTA in 2020; and over $1.3 billion negative EBIDTA in 2019.
Uber Freight has grown from a $1 billion segment in 2020 to almost $7 billion in revenue in 2022, representing nearly 22% of Uber’s total revenue in the same year.
In 2022, Uber generated $14 billion from its core platform (mobility), followed by $10.9 billion from the delivery platform (Uber Eats) and $6.95 billion from the freight platform. The company generates most of its revenue in North America.
In 2022 Uber launched its advertising segment, which comprises revenue from sponsored listing fees paid by merchants and brands in exchange for advertising on the platform. By the end of the year, Uber advertising had generated $500 million in revenue from 315K merchants.
In the food delivery business model companies leverage technology to build platforms that enable users to have the food delivered at home. This business model usually is set up as a platform and multi-sided marketplace, where the food delivery company makes money by charging commissions to the restaurant and to the customer.
DoorDash is a platform business model that enables restaurants to set up no-cost delivery operations. At the same time, customers get their food at home, and dashers (delivery people) earn some extra money. DoorDash makes money by markup prices through delivery fees, memberships, and advertising for restaurants on the marketplace.
Glovo is a Spanish on-demand courier service that purchases and delivers products ordered through a mobile app. Founded in 2015 by Oscar Pierre and Sacha Michaud as a way to “uberize” local services. Glovo makes money via delivery fees, mini-supermarkets (fulfillment centers that Glovo operates in partnership with grocery store chains), and dark kitchens (enabling restaurants to increase their capacity).
Instacart’s business model relies on enabling an easy set up for grocery stores, the comfort for customers to get their shopping delivered at home, and an additional income stream for personal shoppers. Instacart makes money by charging service fees, via memberships, and by running performance advertising on its platform.
Grubhub is an online and mobile platform for restaurant pick-up and delivery orders. In 2018 the company connected 95,000 takeout restaurants in over 1,700 U.S. cities and London. The Grubhub portfolio of brands like Seamless, LevelUp, Eat24, AllMenus, MenuPages, andTapingo. The company makes money primarily by charging restaurants a pre-order commission and it generates revenues when diners place an order on its platform. Also, it charges restaurants that use Grubhub delivery services and when diners pay for those services.
Shipt is a North American integrated delivery service for groceries, home products, and electronics initially funded by Bill Smith, a highly experienced entrepreneur with a history of creating successful start-ups; in 2014, Smith used $3 million of his own money to create the first iteration of Shipt, the company was acquired by Target in 2017 in a cash deal worth $550 million. Membership fees predominantly drive Shipt revenue generation.
Adidas’ mission is “To be the best sports brand in the world.” Adidas AG is a German multinational initially founded in 1924 by Adolf Dassler who developed spiked running shoes out of his mother’s house. Today, the company is the largest sportswear producer in Europe and the second largest globally behind rival Nike.
Tesla’s vision is to “create the most compelling car company of the 21st century by driving the world’s transition to electric vehicles,” while its mission is “to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible.” Tesla used a transitional business model as its ecosystem grows.
Amazon’s mission statement is to “serve consumers through online and physical stores and focus on selection, price, and convenience.” Amazon’s vision statement is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
Apple’s mission is “to bring the best user experience to its customers through its innovative hardware, software, and services.” And in a manifesto dated 2019 Tim Cook set the vision specified as “We believe that we are on the face of the earth to make great products and that’s not changing.”
Netflix’s core mission, strategy, and vision are that of “improving its members’ experience by expanding the streaming content with a focus on a programming mix of content that delights members and attracts new members.”
Coca-Cola’s Purpose is to “refresh the world. make a difference.” Its vision and mission are to “craft the brands and choice of drinks that people love, to refresh them in body & spirit. And done in ways that create a more sustainable business and better-shared future that makes a difference in people’s lives, communities, and our planet.”
Starbucks highlights its mission as “to inspire and nurture the human spirit – one person, one cup and one neighborhood at a time.” And its vision is to “treat people like family, and they will be loyal and give their all.”
Microsoft’s mission is to empower every person and every organization on the planet to achieve more. With over $110 billion in revenues in 2018, Office Products and Windows are still the main products. Yet the company also operates in Gaming (Xbox), Search Advertising (Bing), Hardware, LinkedIn, Cloud, and more.
Walmart’smission can be summarized as “helping people around the world save money and live better – anytime and anywhere – in retail stores and through eCommerce.” While its vision is to “make every day easier for busy families.” Walmart defines “busy families” as the bull’s eye of its business strategy.
Nike vision is “to bring inspiration and innovation to every athlete in the world.” While its mission statement is to “do everything possible to expand human potential. We do that by creating groundbreaking sport innovations, by making our products more sustainably, by building a creative and diverse global team and by making a positive impact in communities where we live and work.”
Google mission statement is to “organize the world’s information and make it universally accessible and useful.” Its vision statement is to “provide an important service to the world-instantly delivering relevant information on virtually any topic.” In 2019, Sundar Pichai emphasized a renewed mission to allow people “to get things done!”
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
