Instead of awkwardly paying the driver, hoping they have change, or even debating the correct amount to tip, Uber and Lyft made paying easy by allowing all payments to take place through an online system from your cell phone. Customers have responded favorably to these slight technological adjustments. If you were not born with the skillset of a New York City taxi driver, that is OK because Uber and Lyft use non-professional drivers with registered cars. In fact, almost anyone can become a driver for each company. This is exactly the type of managerial strategy that W. Chan and Renee Mauborgne describe in their case study on Blue Market Strategy.
Wednesday, April 16, 2014
Blue Oceans Strategy in City Streets: Lyft and Uber
Uber cab and Lyft taxi-style services have changed the way people in large cities are being transported. They have both found a way to leverage technology and service to change the way an entire market used to operate. What Uber Cab and Lyft have done is a classic definition of a Blue Ocean Strategy. The logic behind a Blue Ocean strategy isn't based solely on technology, but Uber Cab and Lyft have used existing cell phone and GPS technology to make their services more accessible. Through a cell phone GPS, the cab services can cut down on marginal costs by allowing the closest cab to the client to take the call. While Uber Cab did not completely invent a new market, they just fond a way to combine their market with existing technology of the day, something traditional cab services did not think to do.