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Q1a.Pricing Structure Of Grab And Uber In Comparison To Other Ride Hailing Apps In the Us, China Or Europe
Comparing the pricing structure of uber and grab with other ride-hailing apps in China among them the traditional didi and Quaid is , One could be perfectly right to say that Uber and Grab offers the most affordable and friendly ride cost due to their flexibility and strategic carpool services they offer (Wirtz, & Tang,2016).
After the launch of Uber in Chinas’ three major cities namely; Guangzhou, Shangai and Shenzen, Uber introduced a cut-price offer to those who had cleared their background checks, and this made it’s more popular attracting many potential customers (Wirtz, & Tang,2016).By 2015 the two local companies that are kuaidi and didi made a merger that brought them in market making the most profit out of this, and it remains China s best tax hailing company has its covers more than 400 Chinese cities while uber concentrate in Chinese capital cities.
Didi’s merger changed their pricing strategy by aiming at the private car-hailing market this prompting them to spend less on taxi car subsidies resulting to increased subsidies in privates car trips.On the other hand, Uber earns a quarter of passengers fare leaving three quarters to the driver as uber doesn’t own the car nor employ their drivers thus keeping the cost reduced (Lee, 2017).
Grab, and uber pays the fare for many passengers as per rides insinuating that on many trips these companies lose some amount of money resulting to a blame game between the sides merger group and the uber-company over the subsidies that has become a trend in the ride-hailing market (Hook, 2016).

These subsidies are believed to be draining cash from this business though they also measure market shift of demands and supply.
Research shows that most Chinese passengers prefer uber and Grab to didi merger group as uber is cheap compared to the latter as it the case to drivers who prefer uber due to bonuses accrued from uber (Ma,2017).
Another reason that makes uber preferable is the introduction of the carpool services that reduce the cost of having a ride in uber as the cost is split between the passengers headed to the same destination.
Q1b.Using Survey Methodology, Construct the Price To Perceived Benefit Map Of Grabhitch, Uberpool, Grabcar, Uberx Versus Two Other Modes Of Transport.
According to data from these carpooling service, it’s evidence that it’s of great benefit to noncommercial daily passengers who share similar destination or ways to their places of work. This reduces the cost of the petrol and maintenance cost for both passengers and drivers and enhancing interaction between new people comparing to other modes of transport.
The carpooling services drivers earn same mileage rates and its rides often are longer thus efficient as they earn more from the multiple fares from passengers.
The carpool services fare are broken down into
Ride fee =$2.50
-Safe ride fee $1.35 x 3 passengers =$4.05
-Total mileage earning 4.9 mi x$1.3/mi=$6.37
-Time earns 27minX$O.26/min =$7.02
In comparison to carpooling services, a former cab driver confesses that driving the car at $ 2.7 for every mile ,was well paying and lucrative comparing to carpool services even to shorter distances where in today’s market short distance rides have become so unprofitable as there is low mileage rate for pick up and drop off passengers by rideshare. The carpool service has a decent profit due to the increased volumes of passengers as its covers for the empty ride.
The carpool service riders enjoy around 20 % subsidies of the normal fare as they pay only 80% of the total fare while their drivers enjoy a simultaneous 3 passenger ride along the target market while the carpooling companies earn a lucrative margin profit as they pay drivers same rate per mile (Dudley, Banister, & Schwanen, 2017).
Q2A. Grab Vs. Uber Pricing Chart
These both apps are rated to be among the top 5 most downloaded apps in the app store, and we compare these two car-hailing services pricing differences and the reasons for the differences.
Blue sg Grab Uber Taxi
Base fare $0.0 $2.5 $3.0 $3.2
Minute cost $0.5 $0.16 $0.22 $0.30
Per km cost $0.0 $0.5 $0.47 $0.55
While there is a little gap of difference between these two car-hailing apps, the grab company seems to gain more customers than the rubber and other taxi operating a business (Wicaksono, Sulistio, Wardani,& Bramiana). This has made the grab app to be most downloaded in comparison to related taxi-hailing apps while on another long distances apps, Uber seems to gain more popularity and its preferred to grab as its more cheaper in a distance that covers more than 30 km (Farris, Yemen, Weiler, & Ailawadi,).This can be demonstrated through a better example of a ride from Jurong west to change airport where uber charges $27.56 cheaper than grabs $27.86.These differences are more apparent when the distance is long or in a situation where large car services are rented.
Charging a lesser or rather cheap base fare makes grabs superior over uber even during peak hours (Hook, 2016).Consumers are given an opportunity to compare these two car-hailing taxi services through a taxibot Chabot which is an initiative that provides a direct chat on Facebook messenger app thus creating an overall efficiency to customers,
Q2b.Two Non-Dynamic Pricing Strategies For Grabs And Uber
These nondynamic pricing strategies that are put in place for long-term effect where overall prices are not affected by the demand and supply curves for these two giant companies .the the first strategy is;
1. Elimination Strategy
This is war strategy that the two companies have engaged in fiercely in an attempt to gain superiority where they set lower price levels than the marginal costs leaving the companies able to keep for the cost of all passengers. All this is for the elimination of each other to achieve a monopoly status which has proved much of a dream than reality (Venkatesh, & Easaw, 2015).By this, the companies strive to overthrow one another to remain the only victor in the market and after that gain the monopolistic advantages to recovering what has been used during the competition period. This strategy brings us to another puzzle of whether who will be the last standing man
2. Pricing Strategy
Through its cheaper and considerable pricing strategy by the uber-company, has helped its to acquire many loyal customers has it delivers superior and quality services promptly to both the drivers and the riders all along the way since it started its operations (Venkatesh, & Easaw, 2015). Uber provides a platform where it works as a middleman between the rider and the driver putting in place a considerable charge that attracts many clients due to the resulting exactness raging from route and fare charges.
Q3a. Identify and Discuss Three Weaknesses In Uber Existing Pricing Strategies
Through the SWOT analysis that is strengths, weaknesses opportunities, and threats, there have been noted several flaws in uber existing pricing strategies both to the general public, riders, staff and even government agencies.This analysis brings us to another question of what to expect in future of weather will they continue to expand without finding ways to reduce the impacts of weakness and the existing threats (Elbanna, & Newman, 2016).
Among these weaknesses are;
1.The launch of carpool services through the uber pool and another pool service greatly reduces the profit uber might be receiving from riders who prefer privacy and likes traveling alone due to reasons ranging from security to related criminal acts.
2. The launch of pay in cash option instead of the cashless only policy that existed before poses another security concern as it may attract dishonesty and theft amongst its clients. On another hand, this brings out uber like a taxi and therefore forced to comply with hard taxi regulations that limit its operations and has to battle many court cases to establish its true nature (Dudley, Banister, & Schwanen, 2017).
3. The launch of carpool services where drivers are given a chance to chose their riders may pose a social threat due to increased acts of harassment and even rape cases.
4. Uber is losing track by only concentrating in big cities where tax services are rare and expensive to get to London, and a change in transport laws may greatly and adversely affect its operations. Instead Uber should start penetrating to the interior and remote areas where competition is minimal.
Q3b.Describe New Pricing Structure And Strategy Recommendations That Will Enhance The Profitability Of Uber In Singapore
1. The closure or termination of pay in cash option as this may reduce cases of mistrust among the drivers and riders as some drivers overcharge the unsuspecting riders. This enhances customer trust towards the company creating a friendly environment between the uber-company and its clients (Einav, Farronato,& Levin, 2016).
2. Uber should create ways to keep both the driver and the clients satisfied which may help to find favor from the government agencies to avoid legislation which could otherwise hinder its functionality and efficiency. This is due to repeated legislation amendment that seems so discriminative targeting to disrupt normal uber operations in Singapore
3. Uber should come up with a financial specialist who needs to cater For SWOT analysis to provide the actual data to managers who will the induce aggressive strategies connected to strengths and opportunities available in the external environment (Einav, Farronato,& Levin, 2016). This will create a more innovative and inventory environment that will provide ways to curb weaknesses and threat while maintaining strength thus creating more developmental opportunities.
4. With the daily advancing technology, uber needs to upgrade its software to suit the tech generation and the less fortunate in society who may not be able to afford smartphones since the uber app only operates in android and apple phones (Elbanna, & Newman, 2016).Uber needs to enter into a partnership with communication firms where one can access their service by not having necessarily to use the app but by just dialing codes that provide an interface to uber services.
5. Uber needs to come up with new dynamic pricing strategies that will put the company always a step ahead of their competitors during these changing times in consideration to peak and off-peak periods that have often proved a challenge to many car-hailing companies in Singapore. These strategies will ensure that the company has quality control over the driver and the customers, therefore, reducing pick up cases increasing fleet coverage which will lead to increase in the number of passengers.
References
Dudley, G., Banister, D., & Schwanen, T. (2017). The rise of Uber and regulating the disruptive innovator. The Political Quarterly, 88(3), 492-499.
Einav, L., Farronato, C., & Levin, J. (2016). Peer-to-peer markets. Annual Review of Economics, 8, 615-635.
Elbanna, A., & Newman, M. (2016). Disrupt the Disruptor: Rethinking’Disruption’in Digital Innovation. In MCIS (p. 58).
Farris, P., Yemen, G., Weiler, V., & Ailawadi, K. L. Uber Pricing Strategies and Marketing Communications.
Hook, L. (2016). Uber’s battle for China. Financial Times. https://ig. ft. com/sites/uber-in-china/(21.04. 2017).
Lee, C. (2017). Dynamics of Ride Sharing Competition.
Ma, W. (2017). Launched in China. China’s Mobile Economy: Opportunities in the Largest and Fastest Information Consumption Boom, 279-311.
Venkatesh, G., & Easaw, G. (2015). Measuring the Performance of Taxi Aggregator Service Supply Chain. SAMVAD, 10, 26-36.
Wicaksono, A., Sulistio, H., Wardani, A. W., & Bramiana, D. A. Evaluation of Online Motorcycle Taxi Performance In Surabaya and Sidoarjo Area, Indonesia.
Wirtz, J., & Tang, C. (2016). Uber: Competing as the market leader in the US versus being a distant second in China. SERVICES MARKETING: People Technology Strategy, 626-632.