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UBER CHINA: RIDING WITH CHINESE CHARACTERISTICS

Reference No. 16/011C Publication Year 2016
Author(s) Amy Yip, Cinty Li
Company Uber China
Industry Software and Services
Geographic setting China
Functional Area Strategy & General Management; Management of Information Systems; Public Policy and Strategy

Synopsis

Building on Global Positioning System (GPS) technology, Uber, the California start-up technology company, links drivers and passengers on smartphone apps to provide a rides-on-demand service. Since its launch in 2009, Uber has been expanding exponentially around the world, amid resistance from taxi drivers and run-ins with government regulations. The company claims it has been doubling its size every six months. In 2015, Uber became the start-up company achieving the highest valuation, US$50 billion, overtaking Facebook in value and speed of growth.

Uber’s biggest challenge seems to be cracking China, the world’s most populated country and second-largest economy. To add fuel to the fire, in September 2015, Uber’s biggest competitor in China invested in Lyft, Uber’s strongest rival in the US. Half a year later, Apple invested US$1 billion into Uber's Chinese competitor, the exact amount Uber was losing in China a year. The enemy of your enemy is your friend. When your enemy teams up with your other enemy thousands of miles away, it is almost like having someone charging into your front door while someone else blows smoke in your back door. How should Uber deal with all this as it expands into China? 

Learning Objective

1. Understand Uber’s operations and business model in the larger context of the sharing economy.

2. Learn about Uber’s competitive advantages in expanding to over 450 cities in seven years.

3. Learn about the challenges Uber faces when expanding.

4. Analyze Uber’s opportunities and challenges in China.

5. Analyze the kind of strategies Uber should adopt when expanding in China.

 

Suggested Questions:

1. How does Uber operate? Introduce the concept of the sharing economy.

2. Why is Uber successful? Analyze Uber’s competitive advantages in expanding to over 450 cities in seven years.

3. What challenges does Uber face as it expands globally?

4. How is the game played differently in China? Analyze Uber’s opportunities and challenges in China.

5. Given the unique business environment in China, what kind of business model or strategies should Uber adopt?