1© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Uber

August 2015Limit to 2 businesses Uber should acquire

Rebecca Ren

Agenda

• Market size and Uber

• What digital business is?• Uber ecosystem

• Why to disrupt? SWOT analysis

• How to disrupt?

• Two business acquisitions • Why self driving in detail• Why coffee in detail

2© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

A technology company which operates under a digital business environment: App powered on demand car service provider; Plays the role of matchmaker, matching a

driver/car with a customer looking for a ride and taking a slice of the fare for providing the service;

Uber charges 20% commission on fare and driver gets the rest 80%.

Market size and Uber:

Uber

Gross receipts $1.50 Billion

Revenue $300.00 Million

Rebecca Ren

3© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

• Digital business depends on an ecosystem of people, things and organizations.

• The ecosystem must communicate, coordinate and collaborate if it is to survive.

• Innovation happens by introducing new actors (which could be of any type) into the ecosystem …

• … or by changing the relationship between actors.

• Each actor plays a different role and has its own strategy.

What Digital Business is?

Rebecca Ren

4© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Uber

Research groups

Universities

cars

GovernmentLarge companies

Riders

Venture capitalists

Drivers

Research funding

Paying 80%

Paying 20%

Driving services

Create and collaborate Spin off and

support

Cooperate & Acquire

Device

Governance and regulation

Uber ecosystem

Rebecca Ren

Education funding

5© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Why to disrupt? SWOT analysis1. Global player with presence in over 50 countries and 200 cities2. Serves as a market place and hence fixed investment is less3. Gained a premium brand image especially in developing countries4. First mover advantage globally5. Deep pockets & hence can burn cash heavily to acquire market share

Rebecca Ren

S

1. Unorganized market is huge in developing countries and hence huge potential is there2. Increasing internet penetration & smart phone users3. Rising disposable income4. Shifting of consumers towards convenience creates huge demand

O

1. The use of dynamic pricing2. Drivers are the face of the company and hence their

misbehavior directly affects the brand image3. While the demand is huge, amount of cash burning

is huge and monetization is difficult4. Driver dissatisfaction on insurance and customer

complaints 5. Security concerns6. Frauds in China market7. Legal issues & Government regulations

W

1. Rising competition2. Presence of many national players3. Absence of clear government regulations4. Future is unclear due to lack of regulations5. Customer loyalty is less in this industry

T

6© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Uber

Research groups

Universities

cars

Government Large companies

Riders

Venture capitalists

Drivers

Research funding

Paying 80%

Paying 20%

Driving services

Create and collaborate Spin off and

support

Device

Governance and regulation

Paying 100%BelongingPaying 40%Device

How to disrupt?

Rebecca Ren

Education funding

Cooperate & Acquire

7© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Self driving system for answering the challengeso To reduce the cost of driver and to standardize

the customers’ experience;

o To increase supply in market and hence reduce dynamic pricing;

o Driver dissatisfaction on insurance and customer complaints will be controlled;

o Frauds in China market will be controlled.

Uber coffee for growth & differentiation

o For revenue maximization via diversifying product portfolio;

o For revenue maximization via reducing the idle driving;

o To create customer loyalty and intimacy;

o It’s not just coffee!

Two business acquisitions

Rebecca Ren

8© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

• In line with Uber strategic direction set by CEO Travis Kalanick “Self driving cars not people were the future of Uber’s ride services.” A decade time waiting though!

• An eye catching marketing initiative

• Maintaining premium & advanced image

• Activating more idle cars to increase supply

• Oxford University’s Mobile Robotics Group (MRG) is almost there!

Why self-driving?• Good investment:o Average cost of driver: typically one-third

of overall gross fare income, according to "Forbes." Adding gas I would use ½ as the driver cost of total fare.

o Uber driver in US report $30,000 income a year after expenses.

o As cost of split 80% fare reduced to ½ of it, which is 40%.

o $30,000 *60%=$18,000 will be saved per car

o V.S. cost per system is US$7,700;o $18,000-$7,700= $10300 /car saving/year

9© 2014 Cisco and/or its affiliates. All rights reserved. Cisco Confidential

Why Coffee? Mobile networkingUsing Uber concept to “ further activate” a service or product consumed frequently and MATCH with novelty:

• Coffee chat in limo (Coffee house on the go)

• Providing private space for coffee chat for a diversified group of people, not just riders

• Increasing customer loyalty

• Diversifying current product portfolio

• Acting as a marketing initiative with novelty to attract and increase customer base

• Differentiating from competitors.

September breakdown of an average Uber X partner hour (in minutes)

2014

Supply

Demand