Team C3 talks about what’s next for Uber

Adnan WaheedAnchal RaghuwanshiErik GalasYash Sinha

Agenda

• Uber: An Overview• What’s next for Uber• How did we come to this conclusion• How are we implementing this• What’s in it for the customers• The financial outlook• Wrap up

The World’s Fastest Growing Company

• Global Presence – 339 Cities | 61 countries

• Target customer - anyone with a mobile phone and credit card

• Transportation + Logistics – Experimenting with food delivery and bicycle courier services

Provides What Customer Wants

Reliable

Customers get a cab within minutes

Ease of use

Easy to operate

application

Affordable

uberX at least 10% cheaper than a Taxi

Opportunity to Expand the Businesses

Large User Base

Platform

How do you decide what’s next?

Luxury Transportation

Mass Transportation

Delivery Logistics

Home Services

How do you decide what’s next?

Number of Customers (Demand)

The Stability of Demand

Organized Competition

Luxury Transportation

Mass Transportation

Delivery Logistics

Home Services

How do you decide what’s next?

Number of Customers (Demand)

The Stability of Demand

Organized Competition

Luxury Transportation Low (-) Stable (+) Low (+)

Mass Transportation Medium (+) Unstable (-) High (-)

Delivery Logistics High (++) Stable (+) High (-)

Home Services High (++) Stable (+) Low (+)

How do you decide what’s next?

Number of Customers (Demand)

The Stability of Demand

Organized Competition

Luxury Transportation Low (-) Stable (+) Low (+)

Mass Transportation Medium (+) Unstable (-) High (-)

Delivery Logistics High (++) Stable (+) High (-)

Home Services High (++) Stable (+) Low (+)

Introducing…

uberHome

Handyman

ChefCleaning

uberHome

Offers home care services at your doorstep across multiple categories, including• Cleaning

• Laundry and dry cleaning• Dusting, sweeping, tidying and floor washing

• Chef• Professional chef catering to your home or a small event• Cooking lessons

• Handyman • Repair services such as plumbing, electrical, furniture and

fixtures

Today’s focus

Addressing gaps in the market

• No major players – highly fragmented industry with large number of individual contractors and small companies

• Lack of well-defined service standards for the industry

• General experiences have been underwhelming and leave much to be desired

• Conflict between times people are at home and the times at which these services are available

How does it work?

Select a category

Select a service

Schedule the job

Check out responses

Finalize the appointment

Confirmation

Meanwhile, at the service end

What’s in it for customers?

• Convenience• The service providers come to you at a time of your convenience• No hassle of going through directories and contacting hundreds of

providers• Reliable service quality

• Uber’s trustworthy crowdsourced star-ratings• Initial vetting by Uber

• Services available immediately* in case of emergencies• Transparent pricing and charges• Available across multiple locations through a single app

What’s in it for service providers?

• Steady demand of customers• Removes dependency on sourcing agencies or advertising• Clear communication of work requirements• Competitive earnings potential• Flexible working hours• Earn extra after work hours (or use as primary source of work)• Bonuses and access to lines of credit• No more nightmarish customer experiences as customers are

reviewed by other service providers on the platform

What is the user’s cost?

• Handyman divides into 3 skill sub-sets with different fee structures• General Contractor (Repairs, Painting & Fixtures) = Range

$35-100 per hour• Electrician (Certification Required) = Range $50-100 per hour• Plumbing (Certification Required) = Range $50-100 per hour

• Fees are conveyed to the user before confirming the appointment

Market Opportunity

• According to US Census between 2009-11; population spent US$360 billion on home improvements

• 63% of this work was done by professionals

• We estimate that uberHome has the potential to capitalize on this market by targeting 2-5% of the Home Improvement spending.

• Hence there exists a potential Handyman market of US$ 5-11 billion per year.

The financial outlook

• Uber takes 10% of each uberHome transaction with potential to increase to 20% as with the uberX model

• Thus Uber can earn between $500 million and $1 billion per year by capturing just 2-5% of the market

Source: http://www.foxbusiness.com/features/2015/08/28/leaked-documents-show-ubers-cost-structure-best-performing-cities.html

Year 1 Year 2 Year 3 Year 4 Year 5

($200,000,000)

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

uberHome's 5 Year Financial Projections

Gross Bookings Net Revenues Contributing Margin

Key growth drivers for market

• Market is growing again – sales back to pre-crisis levels• Consumers look for style and personalization• Ageing baby boomers lean towards “Do-it-for-me” solutions• Increasing per capita disposable income• Large number of businesses• Rise of the sharing economy• Sustainability and safety of materials is critical – requiring

professional intervention

Source: Home Improvement: Category Overview (July 2015, Euromonitor International

Risks & Contingency

• Signing up sufficient contractors• Screening of qualified handymen• Legal concerns around repairing homes•Dealing with organized unions

Summary

• Uber has established itself as a reliable, easy to use and affordable service provider.

• We believe that Uber’s brand and business model is ideal to capitalize on other markets with low customer satisfaction.

• uberHome can be a suite of services to satisfy a fragmented market with no established major player.

Questions?

Thank you!

The finances (costs based on uberX’s)Year 1 Year 2 Year 3 Year 4 Year 5

Revenues$500,000,00

0 $600,000,00

0 $720,000,00

0 $864,000,00

0 $1,036,800,0

00

Gross Bookings100.00

%$500,000,00

0 100.00

%$600,000,00

0 100.00

%$720,000,00

0 100.00

%$864,000,00

0 100.00

%$1,036,800,0

00 Service Provider's

Commission(90.00

%)($450,000,0

00)(90.00

%)($540,000,0

00)(85.00

%)($612,000,0

00)(85.00

%)($734,400,0

00)(80.00

%)($829,440,00

0)Service Guarantee Fee 5.00% $25,000,000 5.00% $30,000,000 6.00% $43,200,000 6.00% $51,840,000 7.00% $72,576,000

Incentives(3.00%

)($15,000,00

0)(3.00%

)($18,000,00

0)(2.50%

)($18,000,00

0)(2.50%

)($21,600,00

0)(1.50%

)($15,552,000

)

Returns(1.00%

)($5,000,000

)(1.00%

)($6,000,000

)(0.75%

)($5,400,000

)(0.75%

)($6,480,000

)(0.50%

) ($5,184,000)

Net Revenues 11.00%$55,000,000 11.00%$66,000,000 17.75%$127,800,00

0 17.75%$153,360,00

0 25.00%$259,200,00

0

Payment Fees(2.50%

)($12,500,00

0)(2.50%

)($15,000,00

0)(2.50%

)($18,000,00

0)(2.50%

)($21,600,00

0)(2.50%

)($25,920,000

)

Mobile (Net)(0.20%

)($1,000,000

)(0.20%

)($1,200,000

)(0.20%

)($1,440,000

)(0.20%

)($1,728,000

)(0.20%

) ($2,073,600)

Network(0.30%

)($1,500,000

)(0.30%

)($1,800,000

)(0.30%

)($2,160,000

)(0.30%

)($2,592,000

)(0.30%

) ($3,110,400)

Other COGS(2.00%

)($10,000,00

0)(2.00%

)($12,000,00

0)(2.00%

)($14,400,00

0)(2.00%

)($17,280,00

0)(2.00%

)($20,736,000

)

Sales & Marketing(5.00%

)($25,000,00

0)(5.00%

)($30,000,00

0)(4.00%

)($28,800,00

0)(4.00%

)($34,560,00

0)(3.00%

)($31,104,000

)

Insurance(3.50%

)($17,500,00

0)(3.50%

)($21,000,00

0)(3.70%

)($26,640,00

0)(3.70%

)($31,968,00

0)(4.00%

)($41,472,000

)

Other OPEX(3.80%

)($19,000,00

0)(3.80%

)($22,800,00

0)(3.80%

)($27,360,00

0)(3.80%

)($32,832,00

0)(3.80%

)($39,398,400

)

Contributing Margin(6.30%

)($31,500,00

0)(6.30%

)($37,800,00

0) 1.25% $9,000,000 1.25% $10,800,000 9.20%$95,385,60

0

Source: http://www.foxbusiness.com/features/2015/08/28/leaked-documents-show-ubers-cost-structure-best-performing-cities.html