Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector
This case explores the nature of the relationship between Uber Technologies, Inc., and its driver-partners. Uber touted itself as a technology company that licensed an app to independent contractors acting as drivers. However, some Uber driver-partners were unhappy and their lawyers filed lawsuits seeking class action status. The driver-partners believed that Uber should have treated them as employees and should have given them benefits (e.g., workers' compensation and reimbursement for their expenses). They complained that Uber unfairly denied them gratuities. The case provides a brief history of Uber Technologies, its competitors, and the taxi and limousine industry, discusses the requirements for working as an Uber driver-partner, and delves into litigation related to Uber's labor practices. It raises substantial questions about how to classify workers (employee v. contractor) and how to develop human resource practices in the sharing economy.
Authors :: Janet L. Rovenpor, Lisa T. Stickney, Rita J. Shea-Van Fossen
Swot Analysis of "Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector" written by Janet L. Rovenpor, Lisa T. Stickney, Rita J. Shea-Van Fossen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Uber Driver facing as an external strategic factors. Some of the topics covered in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector case study are - Strategic Management Strategies, Managing yourself and Organizational Development.
Some of the macro environment factors that can be used to understand the Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector casestudy better are - – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, etc
Introduction to SWOT Analysis of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Uber Driver, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Uber Driver operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector can be done for the following purposes –
1. Strategic planning using facts provided in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector case study
2. Improving business portfolio management of Uber Driver
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Uber Driver
Strengths Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Uber Driver in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector Harvard Business Review case study are -
High switching costs
– The high switching costs that Uber Driver has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Uber Driver is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Janet L. Rovenpor, Lisa T. Stickney, Rita J. Shea-Van Fossen can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Cross disciplinary teams
– Horizontal connected teams at the Uber Driver are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Learning organization
- Uber Driver is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Uber Driver is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Organizational Development field
– Uber Driver is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Uber Driver in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Organizational Resilience of Uber Driver
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Uber Driver does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Uber Driver is present in almost all the verticals within the industry. This has provided firm in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Uber Driver has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Superior customer experience
– The customer experience strategy of Uber Driver in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Uber Driver in the sector have low bargaining power. Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Uber Driver to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Uber Driver has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Uber Driver to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector are -
Low market penetration in new markets
– Outside its home market of Uber Driver, firm in the HBR case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector HBR case study mentions - Uber Driver takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High operating costs
– Compare to the competitors, firm in the HBR case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Uber Driver 's lucrative customers.
Skills based hiring
– The stress on hiring functional specialists at Uber Driver has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Janet L. Rovenpor, Lisa T. Stickney, Rita J. Shea-Van Fossen suggests that, Uber Driver is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Products dominated business model
– Even though Uber Driver has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Uber Driver is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Uber Driver has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Uber Driver products
– To increase the profitability and margins on the products, Uber Driver needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Uber Driver is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Uber Driver needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Uber Driver to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Uber Driver has relatively successful track record of launching new products.
Opportunities Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector are -
Manufacturing automation
– Uber Driver can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Uber Driver has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Uber Driver can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Uber Driver to increase its market reach. Uber Driver will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Uber Driver can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Uber Driver can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Uber Driver in the consumer business. Now Uber Driver can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Uber Driver can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Uber Driver can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Uber Driver to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Uber Driver to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Uber Driver has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Uber Driver to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Uber Driver to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Uber Driver in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Uber Driver can use these opportunities to build new business models that can help the communities that Uber Driver operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Threats Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector are -
Regulatory challenges
– Uber Driver needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Organizational Development industry regulations.
Technology acceleration in Forth Industrial Revolution
– Uber Driver has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Uber Driver needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Uber Driver with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Uber Driver needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Uber Driver can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector, Uber Driver may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Uber Driver can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Uber Driver can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Uber Driver business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Uber Driver needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Consumer confidence and its impact on Uber Driver demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Uber Driver.
Increasing wage structure of Uber Driver
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Uber Driver.
Weighted SWOT Analysis of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Uber and its Driver-Partners: Labor Challenges in the On-Demand Transportation Networking Sector is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Uber Driver needs to make to build a sustainable competitive advantage.
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