How Does Virtual Business Model Work in Uber?

Remember the long waits when at least one taxi was supposed to arrive, or when you had to walk 2 kilometers to the main road to catch a taxi and had nowhere to go? Uber, on the other hand, is the answer to all of these taxi-related issues; it’s not just an app for us; it’s a savior sent by God. Regardless, Uber’s true explanation is that it is a smartphone software that provides consumers with on-demand services. This is a pretty basic process in which a registered Uber user submits a request through the app and connects a willing passenger with a taxi driver.

I discussed Amazon’s digital transformation and how they developed from bookshop trials to top tech titans in my earlier blog, “The lessons amazon’s digital transformation can teach us” The majority of companies that adopt the virtual business model have a similar origin story to Amazon. Virtual business models are linked to entities and rely on technical tools to carry out the majority of their tasks without relying on physical assumptions.

Uber is one of the world’s few tech businesses with a market capitalization of more than $95.67 billion dollars (2021). Uber is a business model that is revolutionizing the taxi industry. For many customers, the app has been able to replace traditional taxi services by allowing you to hail a cab at your location in the shortest time feasible.

Uber introduced the concept of the aggregator business model to the world. They work with a large team of self-employed drivers who they use to transport passengers. Through their app, you can order a taxi and then track it on a map as it heads towards you. As soon as you are picked up, your card will be debited, and you will be on your way. It’s as easy as that.

Uber Business Model Components

• Revenue Streams — Uber’s revenue model has its own uniqueness. It not only includes the revenue through the customer’s trip commission, but also surge pricing, revenue from cancellation of rides, and endorsement of other products on the app.
• Value Proposition — Drivers will be able to work more flexible hours and earn more money, while passengers will be able to pay with credit cards and save money.
• Promotional Partnerships — Due to its huge user base, Uber is a major attraction for larger brands looking for partnerships as part of their marketing strategies. In addition to revenue from driver commissions, Uber’s business model also includes revenue from advertising partnerships. Pepsi, Hilton, BMW, Starwood, Spotify, and other businesses have previously partnered with the company. These partnerships produce a win-win situation for all parties involved.
• Extraordinary Features & Support — Due to its huge user base, Uber is a major attraction for larger brands looking for partnerships as part of their marketing strategies. In addition to revenue from driver commissions, Uber’s business model also includes revenue from advertising partnerships. Pepsi, Hilton, BMW, Starwood, Spotify, and other businesses have previously partnered with the company. These partnerships produce a win-win situation for all parties involved.
• Social Media Marketing — With Uber’s mobile focus and the presence of social media, Uber is now able to deliver the most convenient and superior customer experience.

Conclusion

Uber, like other successful startups, did not become well-known overnight. Their success may be traced back to greater business model innovation, which provides clients with better services at reduced prices. Uber is the most revolutionary transportation provider in the world, helping billions of people get to wherever they need to go with safety and convenience. With bold founders, a revolutionary business model and a lot of hard work, it has become one of the most successful businesses in history.

Reference

Startup Talky, 2021. A Deep Dive into the Strategy and Innovation of Uber.
Available at: https://startuptalky.com/uber-business-model/
[Accessed 09th March 2022]

Aashish PahwaHow, 2021. does Uber Make Money?
Available at: https://www.feedough.com/uber-business-model/
[Accessed 10th March 2022]

Gijs Mensing, 2018. Exponential business models — Uber.
Available at: https://www.businessmodelsinc.com/exponential-business-model/uber-an-exponential-business-model/
[Accessed 10th March 2022]