Uber Business Model : What makes it so Disruptive?

so the most important reason why customers love goober has its source in the design of the app and the service as you'll see later design innovation fits into the value proposition block when you need a ride you just pull out your mobile phone and tap a button to order a car the phone's GPS knows exactly where you are the driver knows where you're going because you enter the address on your phone as well and the app has your credit card number so there is no financial transaction between you and the driver now just imagine all the steps that have been deleted compared to the traditional taxi industry before you needed to find a taxi company phone number that already was a huge obstacle but then you would need to talk to an operator and tell them your address then they would send you a taxi to pick you up but you couldn't know exactly when it was coming and finally you would need to take out a payment method and use it manually at the end of the right so you were literally combined all these numerous steps into a few button taps on a well-designed mobile app so here design innovation is key but not so much the visual design as we will explain later but mainly the service design the easier and more convenient customer journeys through the service from the order until you are delivered to your destination that's already a rule to remember for any business reduce the steps that your customer has to go through to enjoy your service as much as possible think about their actions from the moment they want to buy something from you and the moment they finally get it how can you make it easier and faster for them and for uber this innovation also extends to the channels obviously the channels block is about sales and delivery channels and so here you were apt is definitely an innovation the sale happens through a mobile app and not to a website booking or a phone call to attack the company but of course for uber this doesn't stop here next innovation which makes giver so successful in financial terms is illegal one so it were claims to be a technology company and not a transportation company this is very important because they treat their drivers as independent contractors and not employees so in terms of uber internal processes their drivers are considered key partners on the business model canvas and not key resources if drivers were uber employees it wouldn't be as profitable for them anymore because they would need to pay way more taxes and so it would also be more expensive for their clients so eva is constantly navigating a complex legal landscape on a slippery slope and that can be very dangerous for now though it works also the software that uber created allows it to innovate on the revenue model as well with the surge pricing it automatically raises the prices when demand is high and offer is low and so both the drivers and the company can earn more money this is called dynamic pricing and it's one of the innovative pricing strategies that will discuss about later in this course and finally once you take all these major business models innovations together there are yet more consequences for the other blocks of the business model for example more customers are ready to use uber services than taxes a lot even never considered using car transportation services before you became to the market so as you can see Huber's most attractive features for their customers are the innovative design of the service and the lower prices because fewer internal processes are different compared to the traditional taxi industry and if we talk about ubers disruptive global success of course we have to mention they're huge investors and they're ruthless execution but that's another topic the origin of their success can be found in their business model innovation which offers a better service to customers and lower prices [Music]

Channel: Business Disruptors

Views: 73,252

Rating: 4.8812904 out of 5

Keywords: uber, startup, startups, business, model, innovation, business model, business model innovation, strategy

Id: gvEU656kVCQ

Length: 3min 48sec (228 seconds)

Published: Wed Jul 19 2017