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Turning Disruption into Profitability with Business Acumen

Business Acumen: Profitability

In 2009, the ride-hailing and transportation industry was shaken up with the launch of Uber - a ride share company offering lower-cost fares to riders. Since then, Uber has continued to move into different service areas like food and package delivery - two things that have helped during pandemic times. And it’s a good thing it had those services, because during the pandemic the ride-hailing portion of their business dropped by 80%.

But there’s a problem…since it’s inception, Uber has had a problem making a sustainable profit.

Even though they are quite possibly one of the most famous disruptors of this generation, and have completely changed the way people view the ride-share industry - they have not been able to translate that success into profits. The way I see it...this is a huge problem for Uber. To survive long-term they NEED to be profitable...but how?

One thing that will definitely not help in that area are the ongoing lawsuits. Uber’s business model was developed on the idea that their drivers would not be employees of the organization, instead they would just connect willing drivers to passengers looking for a lift. This allowed them to skip out on paying minimum wage, employment taxes, and providing benefits. If the courts find that Uber must consider these workers employees, it will seriously affect their overall business model and the bottom line.

So now, on to what they CAN do to improve revenue.

They could continue to expand and diversify - I mean, they’ve already seen success with it with Uber Eats. According to reports, the company is also looking to expand further into food and alcohol delivery, as well as apps to help with things like public transportation.

Another option to improve profitability is by controlling costs. They’ve already made some moves in this direction, for example the massive lay-off’s last year, but they are also looking at doing things like cutting service of Uber Eats to unprofitable areas, and emphasizing higher-margin areas like Uber Comfort.

If you’ve taken our Building Business Acumen training, you know that there are some ways that are better then others to raise revenue… so it’s time to think like a CEO…if you were the Uber CEO… what would you do?

If you have no idea where to start to make a decision like that - contact us for Building Business Acumen training… we will help you make faster, and more profitable business decisions.

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