Solving Uber Case Study — (2/7)
Problem statement
Uber is a technology company that is changing the way the world thinks about transportation. We have been growing globally at an incredible pace and are scaling a hyper efficient revenue systems infrastructure.
Our revenue platform environment supports the needs of our customers (e.g. Rider, Driver, Eaters, Restaurants, etc.). A key to Uber’s success is to be able to accurately and completely account for all events on the Uber platform (e.g. trips, Eats orders), quickly and efficiently onboard new LOBs on the platform, flexibly support local business requirements across 70 countries / 700+ cities, scale and integrate with core financial applications, ensure operational effectiveness for our billing team, and provide financial data for business insights and P&L analysis downstream.
What would you expect to be the key success factors for a revenue platform?
Poposed Solution
Value proposition for Riders
- Minimum waiting with ETA
- Fare estimation before ride
- Convinient services
- Benefit of competitive pricing
- Multiple payment options
- Live GPS tracking facility
Value proposition for Drivers
- As a source of income
- Easy and fast joining process
- Flexible work timing
- Getting paid online / offline
Key success factors
Uber’s Revenue Sources
Uber’s primary income source is commission on each ride. Besides, it also has several other revenue-generating channels, like: Uber Eats, Uber Freight.
Rides Commission
Customers will be shown the estimated price while using the platform for booking a ride. Uber will take 20% — 25% of this price as its commission, and the rest are divided amongst the partners and other expenses. The commission is between 15% — 30%, averaging all the country’s models.
Surge Prices
In peak hours, the customers have to be a bit higher, following an algorithm of dynamic pricing structure. This is how drivers and Uber earn a bit extra on each side of those hours; in return, customers get instant rides.
Ride Cancellation Charges
Uber has a ride cancellation policy for the riders who cancel the rides within a time interval. The charge is kept higher when the ride is cancelled at the last moment.
Premium Rides
Uber allows its consumers to get luxury rides in top-notch branded taxis. In return, they have to pay extra. Uber receives higher profits in these kinds of rides.
Futuristic approach — Revenue model
Subscription based model
Additionally, Uber can come up with a subscription-based model for employees who commute to the workplace using a private cab/transportation and offer a value proposition to attract customers and offer a hassle-free commuting experience.
Advertisement based model
Uber has 90–120 million users on its platform worldwide. By leveraging the customer’s data, Uber can recommend these :
- Restaurants for Food
- Gas filling station / Petrol pump / EV charging station
- Nearby hotels / motels for stay
and earn commission from the above business from Advertisement in its platform.
