Professional Documents
Culture Documents
Labor regulations
◦ Drivers as independent contractors => no regulations in China =>
labor risk
Capital Markets - Weak
Venture Capital (VC) and investors exist, but the major players
(Alibaba and Tenzen) already signed a deal with competitors,
which leaves only Baidu to support Uber financing activities.
Uber should secure investment deal with those investors
beforehand (Alibaba and Tenzen)
◦ Or maybe Uber already approach them, but they see Didi and Kuadi
business more sustainable
◦ Or maybe Didi and Kuadi support more local instead of foreign
investment
Macro Context - Weak
Public Safety
◦ To mitigate personal safety concern, Uber performed what it claimed were stringent
background checks on all driver partners. But, there will still a number of high profile cases
about individuals with serious criminal records. And China is the grey area that you can’t
make everything legal to do.
Labor Regulation
◦ Treat the driver partners as independent contractors which is they can enjoy the flexibility of
the on-demand work model, many benefits. But, this treatment is not follow the rules, the
lawyer (Liss-Riordian) argued that illegal and unfair for Uber to classify its driver as contractor
but they control many aspect of their work.
Macro Context – Weak (Cont)
Legal Gray Ares
◦ Is it transportation company or Internet company? Uber did not own its own fleet of vehicles.
Opposition from entrenched, local player
◦ Licensed taxi in China complained that Uber promoted unfair competition by enable their user to evade
local tax and regulation. Offered low fares
◦ Law-enforcing vigilantes seeking to expose drivers operating private cars for profit.
National regulation
◦ Govern support, but they do not follow.
Subsidies and subversions
◦ Uber spent massively on subsidies to attract Chinese drivers and consumers.
◦ Fake trips with fake customers.
◦
Bottom Line Judgment
Product Market - Weak
Labor Market - Weak
Capital Market - Weak
Macro Context - Weak
Qualifications
Uber will not sustainable, the cost to maintain its position
(loss of $1 bil) much bigger than the benefit received (11%
of market share)
◦ The major cause of this downfall: improper strategy in Product
Markets and Macro Context
Follow up actions:
In current situation, there are no way for Uber to improve its
condition on Product, Labor, and Macro Markets context. Which
leaves 2 options for Uber to survive (which relates to Product
Markets), either:
Uber join/have partnership with Didi-Kuaidi
Pull out from China’s market
End