Introduction
Key performance indicators (KPIs) are a set of quantifiable measurements applied to determine the overall long-term performance of a firm. KPIs particularly assist in measuring the organizational strategic, operational, and financial accomplishments, mostly compared to those of other organizations (Chaouali et al., 2022). Uber has wreaked havoc in the tax sector globally as its business models permit consumers to tap their smartphone to summon a taxi to their location within the fastest time possible.
Financial KPIs of Uber’s Success
The gig economy experiences stiff competition; hence, a business needs robust KPIs to track its growth sequence. Uber utilizes the following financial KPIs to determine its success, namely, total revenue, gross booking, trips, monthly active platform customers, expansions of its offices globally, and ability to meet consumer expectations and preferences. For example, the total revenue declined in 2019 because of the COVID-19 pandemic effect that emerged in 2019. The company lost 14 percent of its revenue, having a slight growth in sales from 2018 (Chaouali et al., 2022). In addition, gross booking refers to the total dollar value comprising service fees and taxes and fewer tips generated by drivers. The company uses trips to determine the usage and scale of Uber’s platform (Dubal, 2020). Uber’s ability to provide the desired choice to consumers at any time and meet the expectations of 10 minutes and lower has been key to its success.
Uber’s Functional Areas and Departments Contributing to Its Success
Uber considers Customer and Stakeholder measurements that track strategic efforts and competitiveness in the customer and market segments of the business. The company uses big data analytics to understand its customers and other stakeholders. The information and data are gathered to determine consumer satisfaction with the price, quality, and availability of services or products. Financial department measurements will indicate if the company’s strategy, formulation, and implementation are improving its bottom-line operations. The data comprise budget variances, financial ratios, and income targets. In addition, Innovation and Growth will involve measurements that track the way Uber is enhancing its worker’s skills, specific organizational systems and procedures, and IT systems. Lastly, internal process measurements focus on current and new internal systems to guarantee the firm’s future and current success (Weston, 2019). Hence, operational management is examined to track any delays, gaps, shortages, bottlenecks, or wastage in the company.
Financial Benchmarks
Consumers feel that Uber increases its rates often as they use their services. Therefore, the company needs to maintain constant and stable rates for its customers to avert price switching to other taxis (Zwick, 2017). The firm needs to come up with a unique and wide variety of products and services for consumers to choose from. In addition, Uber should offer its consumers the ability to select a driver because a majority of their customers would love to see three drivers along with their reviews, photos, and approximate time of arrival before confirming the ride. There is a need for Uber to establish a favorable and mutual relationship with its consumers to improve sales.
Strategic Changes
Based on Porter’s five forces, Uber can increase its total revenue share from growing and emerging profitable regions like the Middle East and Europe. Gig technology has, in the recent past, been initiated in these regions, and there is a low competition force and approximately zero threats of substitute services or products as it is a unique service offer. The company spends a substantial amount of money on technology to devise new and unique products, Uber Riding the Gig Economy. Further, the company has to concentrate on expanding offered services such as Uber Eats as recent financial reports revealed robust performance indicators from its inception (Chaouali et al., 2022). For the past two years, revenues from Uber Eats have doubled because many households and businesses depend on grocery and meal delivery (Weston, 2019). Fewer competitors are offering similar services with reduced bargaining powers of consumers and suppliers of grocery stores, drivers, and restaurants (Dubal, 2020). The firm should improve its effectiveness and commitment to national, global, and the local community. It can enhance volunteerism among low-income people and senior citizens.
Critical Accounting Guidelines
The EBITDA for Uber is negatively trending as per its financial analysis reports. Therefore, the top management of the company utilized the net income to examine its operating performance, future production, and profitability and to formulate strategic decisions (Chaouali et al., 2022). However, to improve the EBITDA, the company can implement the lean principle along with the cost-saving approach to enhance its operational costs.
Conclusion
The company’s app is easy to use and supports transparency, accountability, and safety between the driver and the customer. It has an element of competition, as revealed in Porter’s five forces analysis. The firm has expanded its offering to the public with added features. It continues to find ways of satisfying its clients and monitoring its financial growth and success.
References
Chaouali, W., Mousa, M., & Mjahed, S. (2022). Gig economy: Is it a poisonous Apple? an empirical study of Uber drivers. Sustainability in the Gig Economy, 175-185. Web.
Dubal, V. B. (2020). An Uber ambivalence. Beyond the Algorithm, 3(2), 33-56. Web.
Weston, F. (2019). Towards a framework for measuring end-user intension towards the GIG economy system: A case study of Uber. Advances in Multidisciplinary and scientific Research Journal Publication, 7(4), 51. Web.
Zwick, A. (2017). Welcome to the gig economy: Neoliberal industrial relations and the case of Uber. GeoJournal, 83(4), 679-691. Web.