HND

BUSINESS

Research Project
Marketing in Hong Kong: an analysis
of rapid growth of Uber service

Name: CHOW Wai Kui

Date of Submission: April 3 2017

Table of Content

Executive Summary

Contents

Acknowledgements

Chapter 1. Introduction

Chapter 2. Background of Study

2.1 Company business model analysis

2.2 Customer analysis

2.3 Market analysis

2.4 Marketing strategy

2.5 Maslow’s Hierarchy

2.6 Five Forces

2.7 SWOT analysis

2.8 4Ps analysis

Chapter 3. Methodologies

3.1 Quantitative analysis

3.2 Qualitative analysis

3.3 Timeline

Chapter 4. Findings & Conclusions

Chapter 5. Recommendations

Appendix

References

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Executive Summary

Uber was founded in 2009 with its services and mobile app launched officially in

America in 2010. Further, Uber was launched in Hong Kong after four years. By

changing the customers’ experience in transportation to be more comfortable and

convenient way would be one of the objectives of Uber with its service such as uberX,

UberBLACK, 7-seater and UberASSIST; as a result, it is known that the expansion of

Uber in different countries is relatively fast amid legal issue has not yet been resolved.

Thanks to the smartphone and mobile applications (apps) development which have been

widely used in the world, it contributes a lot for Uber to develop its business by adopting

different marketing strategies based on specification of different cities or countries.

Revolutionizing the society and competing the old business such as public transportation

particularly taxi industry may give rise to different aspects concerned hereafter.

The report is done as following. The review of Uber industry for the rapid expansion in

Hong Kong is evaluated, together with the analysis of its potential customers. With

respect to the current situation of society and the customers’ behavior, marketing status is

of somehow difference when compared with the past. The following chapters of

Maslow’s hierarchy, five forces, SWOT, 4Ps and Ansoff Matrix analysis have been used

for further interpretation and analysis. Primary research, with questionnaire distributed in

Hong Kong for feedback of the Uber service has been carried out. The data is shown and

analyzed.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Acknowledgement

With great work was ever done without either active or passive support from a person

should not be possible; as a result, is it not hard to conclude how assistance from my

advisor who gave positive impact towards the execution of a project. I am highly thankful

to our learned faculty, Mr. Calvic Wong for his advice guidance and support throughout

the completion of this project. Throughout the preparation of this project, ideas such as

development of the whole project, including title, questionnaire and improvements, those

recommendation provided may enrich my knowledge to write up this report in past few

months.

Last but not least, I would also want to extend my appreciation to those who could not be

mentioned here but have well played their role to inspire me being the certain. I would

like to thank them for supporting me to be tough in facing challenges in this project.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Chapter 1. Introduction

Traditionally, people in Hong Kong desire to take a ride by hailing taxi on street or

calling taxi through taxi radio channel, such act is not efficient enough. With the

technology advance, Global Positioning System (GPS)-enabled app in smartphone

provides an alternative experience for customers, they use their smartphones for travel

with 10 minutes response time from Uber drivers, whom they mount on the dashboard

and follow the map for location (Johnson K., 2014).

From my point of view, Uber is a kind of personal transport network which helps for

connection between drivers and customers for travel by means of user-friendly

smartphone Uber app. Uber is a fast growing transportation company in Hong Kong since

2014. It is well known for people to call for vehicle anytime and anywhere by clicking a

button through mobile Uber app service. Receipt will be emailed automatically. No

matter you are students, executives, physically handicapped, Uber can still be your choice

by providing different services, uberX, UberBLACK, 7-seater, UberASSIST, and many

others. Uber is not only beneficial to the customers, it also aids in employment

opportunity by attracting everyone with a nice and qualified vehicle for a ride to earn a

free experience with extra money.

The purpose of this project is to analyse the marketing strategy of Uber and how it can be

succeed in Hong Kong for its rapid expansion.

Uber creates network to connect passengers and drivers through phone application and

provides options and varieties in the transportation service by adopting real-time

ridesharing. Its value can contribute to passenger and driver with one tap to ride, reliable

pickup, status sharing, ride feedback and cashless as well as flexibility to drive, extra

income and drive with assurance respectively (Uber, 2017). Lawler R., (2015) stated that

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

its value proposition is simple with a cheaper ride due to network orchestrators matching

drivers and passengers.

Uberification covers over 66 counties and 545 cities in the world (Wikipedia, 2017).

By analyzing the marketing strategies adopted by Uber, based on company analysis,

customer analysis, market analysis, service, SWOT analysis as well as internet marketing/

app strategy, together with the help of quantitative analysis for the understanding of rapid

expansion of Uber in Hong Kong.

The objective of the project is to critically analyse the marketing strategies and the rapid

development of Uber service in Hong Kong. The success of Uber service may impact the

traditional industries of transportation as well as the limitation or unsolved problem in

Uber service.

Chapter 2. Background of Study

2.1. Company business model analysis

Uber aims to provide high travelling quality with reasonable price. The business model of

Uber can be illustrated as different entities, Uber, drivers and customers. With the motto

of self-employment and Uber-driver cooperation, Uber first recruits licensed drivers with

licensed vehicles with or without hire car permit for them to earn money in a flexible

way. Uber provides route to drivers and passengers and pay 80% of the fare to drivers and

drivers then provide service to passengers. Uber mobile application with good navigation

map, this can help locating the customers who offer trip request and available Uber

vehicles nearby for ease of travel. After the ride, customers can write a review on the

service to comment on the experience of travel and pay by credit card. Positive feedback

has been resulted with its strong network effects, that is to say, when Uber recruits more

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

drivers, reducing the pickup time, which will attract more customers; which in turn draw

more drivers into the world of Uber (Uber, 2017).

2.2 Customer analysis

With the population expansion in Hong Kong annually, it is known that they are welcome

to spend their money for good quality products and eager to pay higher prices for better

quality goods or services. Chinese intended to select famous western brands with their

high brand loyalty. They are in faith of brands from TV advertisements. In respect of

status, Chinese customers love the goods or services that can show their status (Ying W.,

2003). Emerging from America, western brand, Uber service has easily caught an eye

from Chinese. Not only this, the increasing income and amount of disposable income to

goods and services with comfortable and aesthetical mood change their lifestyle.

2.3 Market analysis

With the help of Census and Statistics Department, Hong Kong Special Administrative

Region, the distribution of average daily public transport passenger journeys by mode in

October 2016 shows that 43% in railway, 32% in franchised buses, 15% in public light

buses, 7% in taxis, 2 % in residents’ services and 1% in ferries. Owing to the statistics,

the total amount of licensed taxies in Urban, New Territories and Lantau Island is 18156

in November 2016; the average daily public transport passenger journeys by public

transport operator is 12530.8 thousand, particularly 917.1 thousand (around 7%) in taxi in

October 2016 (Hong Kong Monthly Digest Of Statistics January, 2017).

It is known that Uber service competes with taxi service, the percentage in taxi usage is

not high enough; nevertheless, Uber may eager to fight against mass transportation with

its merits in various aspects.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

2.4 Marketing strategy

The use of marketing strategy to stand out Uber as a loyal brand is of importance. In

terms of the development of partnership with local drivers with fast rides or luxury

vehicles on demand and target on mobile business travellers who appreciate service-

oriented worldwide (Johnson K., 2014) by keeping 20% of the fare and pays the rest to

the driver on a weekly basis (Kwan H.C. & Lau E., 2015). Uber plays on commission on

fares with smartphone apps installed when compared with those run their own licensed

vehicles or focus on advertising. This can help in attracting drivers and customers, with

more drivers registered, more customers may be resulted; it is a loop of positive feedback

mechanism. In view of this new technology, it has been developing as technology S-curve

(Laurell C., and Sandstrom C., 2016)

2.5 Maslow’s Hierarchy

By applying Maslow’s Hierarchy, Uber can satisfy on physiological needs (food, water,

shelter), with fundamental travel from place to place; it may somewhat meet the safety

needs (security and protection) to the customers as the drivers have to register with

personal information in Uber before taking a ride; social needs (sense of belonging and

love), some Uber drivers may be talkative and sincere, customers may find the drivers

trustworthy, but not achieving esteem needs (recognition and status), as well as self-

actualization needs (self development and realization) due to somewhat illegal issue

unsolved for not recognize as a positive job. Even though some believe that the

motivation is not high enough, still people eager to work on it by earning extra money in

a flexible way as they wish to. On the other hand, as the regulation may not be applied to

customers, customers are highly motivated to take a ride with Uber vehicle due to

convenience and sense of comfort.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

2.6 Five Forces

1. Suppliers’ power

With too many competitors operating with similar business modes as well as traditional

transport industry. The bargaining power and the impact of input on cost are low. The

determinant of supplier power is medium due to navigation of map as well as background

check validity.

2. Threat of new entrants

There is barrier for new drivers to work with Uber due to government policy and recent

news of prosecution for illegal operation without hire care permit; nevertheless, Uber

carries strong brand identity worldwide in which drivers may adore to, together with first

mover advantage from Uber.

3. Buyers’ power

The determinant of buyer power is high due to many available replacements and cheap

switching cost.

4. Threat of substitutes

The threat of substitutes is high and high buyer inclination to substitute due to efficient

public transportation system high price elasticity.

5. Intensity of rivalry or competitors

Higher rivalry with large number of competitors and fast market growth due to industry

in app segment, similar cost structure, low switching cost and low diversity within rivals.

2.7 SWOT analysis

1. Strengths

Now that taxi service has to apply license under government regulations and approval.

Taxi company is the only one that can supply taxi with fare domination, as such it is

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

costly and investment is not possible in this industry. Hailing taxi on street may have a

problem of high empty-loading ratio, resulting in higher consumption of fuel and energy,

lower income of driver, serious air pollution as well as higher incident rate of road

congestion. On the other hand, taxi radio channel calling requires higher labor intensity

with higher labor wages with “many to one” and “one to many” matching system which

is low in empty-loading ratio. Customer satisfaction is not high enough as a consequence

(Kwan H.C. & Lau E., 2015).

In light of Uber business model, Uber facilitates resource allocation by solving mismatch

between demand and supply by providing efficient productivity economically (Chan

J.W.Y., et. al., 2016) which applies “many to many” matching system by downloading

apps in mobile which aids in quick start-up by drivers and customers. It can also enhance

the market share and user loyalty (Chan J.W.Y. et.al., 2016). As for the payment, it is

totally different from traditional public transportation that uses coins and notes, or in a

modern way, that is using Octopus card. Uber adopts another way of payment method to

make the payment progress seamless and convenient to both drivers and customers (Chan

J.W.Y. et.al., 2016) with cashless credit card involved for better transaction.

To be Uber driver, it is easy to be qualified with only valid driving license and a car, with

flexibility and accessibility for them to plan their own schedule, those are desire to earn

easy money (Kwan H.C. & Lau E., 2015).

As for the travel experience, Uber steps up confidence by rating the travelling experience

with rating or review system from Uber. It can be tailor-made for customers with

language, capacity, comfort, and special arrangement with disability (Kwan H.C. & Lau

E., 2015)

2. Weaknesses

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Drivers may be untrained, unlicensed and uninsured (Wikipedia, 2017). Some

experienced drivers may be poorly educated or technology amateur, who may not keen to

work on the Uber apps. Still, using credit card for transaction may potentially take a risk

on exposure of credit card information and personal information during registration

through Uber website or mobile apps, privacy and security should take into consideration

with data portability has to be maintained (Petropoulos G., 2016).

3. Opportunities

Smartphone apps are commonly in use nowadays in Hong Kong, lots of people are able

to download and use apps without difficulties, Uber grasps this opportunity to seize its

market with reasonable price, providing that negative news from traditional taxi services

with poor quality of service, bad attitude of drivers, refusing hiring, overcharging for

example (Kwan H.C. & Lau E., 2015). Uber gives merit by sometimes providing

incentives, Uber offers free rides for the newly-registered (Chan J.W.Y. et.al., 2016) or

referral discounts to attract more users.

The marketing strategy of Uber is of excellence by focusing on target cities to alleviate

the problem of urban living especially those with “blooming nightlife and intense

weather” (Chan J.W.Y. et.al., 2016), that is to say, Uber helps to get a ride during nights

or rainy days.

Uber provides with high profit margins, continued growth opportunities as can be seen in

different countries worldwide, user-friendly with learnability and efficiency in the Uber

app interface (Kwan H.C. & Lau E., 2015).

4. Threats

Traditional taxi radio channel and 20% discounted taxis, in which for the latter that may

provide an attractive discount for long distance travel that have been adopting a decade

ago in Hong Kong. In addition, extensive and comprehensive infrastructure of transport

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

system in Hong Kong with Mass Transmit Railway (MTR), franchised buses and

minibuses, which cover almost 70% of Hong Kong territory.

With such a profitable sector, there are increasing number of taxi apps competitors who

are operating in a similar way as Uber in the world, for instance DidiDache and

KuaidiDache in Chinese market; GrabTaxi in Malaysia; Meru Cabs and Ola Cabs in

India; Haillo and Lyft in the U.S. and the EU market; HK taxi, chok 的，的士通，HK

的土台，紅綠的，EasyTaxi, HK Cross Harbour, Taxier, I call car HK, call 車 app,

GoGo Taxi, 的的打車，快的打車, 香港的士通，一路發的士，的士放題 in Hong

Kong (Chan J.W.Y. et.al., 2016). Sometimes, fake orders from competitors may make

Uber drivers exhausted in term of time (Wikipedia, 2017).

2.8 4Ps analysis

1. Product

Uber Industry developed different types of vehicles to aid in people around the world,

UberCHOPPER helicopter in the United States (Uber, 2017); nevertheless, commonly

uberX, UberBLACK, 7-seater, UberASSIST are served in Hong Kong. 4-people vehicles

can be uberX, which is a standard vehicle like taxi to transfer customer from one place to

another; and UberBLACK which is a luxury vehicle with comfortable seats and

atmosphere inside, served with drinks will be an advantage during transport. It is mainly

designed for those customers in middle-class or above. 7-seater is used to fit for those

customers with number of members for maximum of 6 for a ride, such as gangs of friends

or family members of 4 or above. Lastly, this type of vehicle with good care for the

Elderly with physically handicapped, pregnant women, and many others, drivers of

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

UberASSIST are trained by Open Doors Organization to assist the customers into

vehicles which can accommodate folding wheelchairs, walkers and scooters (Uber, 2017)

In connection with the user-friendly of Uber app interface, customers are in ease of using

it for a ride searching, that is to say, wifi and GPS aids in a real time aerial view of

movement of vehicles, together with the rating score in Uber app for drivers evaluation

after a ride. In addition to “Real-Time ID Check” for drivers to take selfies before ride

request acceptance, to avoid fraud and protection of drivers’ accounts (Wikipedia, 2017)

to get rid of insecure ride.

2. Place

By adopting the smartphone app development with the support of google map, there is no

any station or stop for Uber vehicles, but everywhere whenever customers need a ride

nearby. Kwan H.C. & Lau E., (2015) suggested that the lock-in strategy through google

synergy (google map), retain critical mass and achieve economy of scale, leverage big

data.

3. Promotion

Referral from friends for free ride, free ride offer, discounted ride, celebrity endorsement

and social media, it is not uncommon Uber company saves money on promotion in

media, namely television advertisement and roadshow; but adopt a more efficient way to

promote with referrals and free or discounted ride. The effect of online friendship is

powerful to spread words or texts with social media like facebook.

4. Price

Price is calculated on a time basis. Surge pricing algorithm is a unique marketing strategy

in Uber, which can benefit by attracting drivers to area offering higher wages, so as to

meet the high demand in areas (Petropoulos G., 2016). It is dynamic to balance between

supply and demand on streets and automatically detect situations of high demand and low

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

supply and adjusts price depending on the level of shortage. As such, it gives a higher

motivation for drivers to work for greater number of customers to earn more. The surge

pricing is good for Uber to ensure reliability and encourage more drivers to be available.

It is a simple theory in economic – demand and supply. It can also select the pool of

potential customers who need Uber’s service the most. Petropoulos G., (2016) agreed that

a strong brand image with convenience and speed as a consequence from surge pricing

algorithm can be developed to establish loyal customers and positive brand perception.

Chapter 3 Methodology

By getting more insights about the fast growing transport service, Uber in Hong Kong,

primary and secondary research to gain vital information are adopted and analyze the

marketing strategy in detail.

1. Primary research

The aim of primary research is to obtain opinions from potential customers, as well as to

know their thoughts and demands. A questionnaire that contains different aspects of

questions is set. It is distributed at three selected locations, Tsim Sha Tsui, Causeway Bay

and Shatin to ensure the usefulness of the sample in Hong Kong. Now that 100 valid

responses have received with the complete version of questionnaire is offered in the

appendix.

2. Secondary research

Data and information are used to learn about the situation of Uber in other countries. The

analysis of transportation services in Hong Kong and different marketing analysis of Uber

and its app are also conducted.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

3.1 Quantitative analysis

Among 100 respondents, 60% of them were male. 70% of respondents were married,

which fell into the age group of 31 to 40 with 75% while 24% of them were between 20

to 30. 90% of them were tertiary level or above, and 5% of them were post-secondary

level. Among them, with 72% were employed and 20% were self-employed. 61% of

respondents were working in Hong Kong Island, 20% worked in Kowloon. 65 % of

respondents had a monthly income of $20,000 to $29,999, 20% of them had $30,000 to

$39,999.

Perception on Uber service

99% of respondents had tried downloading Uber apps in mobile or tablet. 31% of them

had not yet tried Uber service before due to either illegal issue nor unfamiliar with the

service. Nevertheless, 69% of respondents had tried Uber service. 57% of respondents

would like to recommend Uber service or Uber apps to others; while 43% of them would

not due to higher cost and illegal issue.

Most respondents agreed that Uber service is highly desirable than local transport, price

of Uber service is reaonsable with quality, using Uber service is a kind of trendy habit,

Uber service provides a comfortable travelling environment, Uber service brings out bad

news about passengers’ insurance, were important; whilst most respondents agreed that

Uber service will be the next lifestyle, Uber service provides uberX and UberBLACK,

Security is a major concern for passengers found to be neutral.

The respondents agreed that service qualities (80%), price (55%) and recommendation

from others (61%) were influential factors. Type of vehicle (70%) did neutral response.

Nevertheless, brand (83%) and advertisement (62%) did not influential at all for Uber

service.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Consumption habit

In respect to the result, 57% of them had used Uber service in the past six months while

32% used less than 3 times. Most of them spent $100 to $499 on their last travelling as

well as in average. To identify their route of travel, the longest distance they travelled

using Uber service in the past six months were Mid-level to Admiralty MTR station and

Tsim Sha Tsui to Tai Kok Tsui. 82% of respondents were travelled with friends and 70%

with colleagues. According to the Uber service, namely uber X, UberBLACK, 7-seater,

uberASSIST, 95% of respondents chose uberX. The reasons for them to choose Uber

service were due to network or coverage (72%), customer-oriented (60%), sense of

comfort (12%). As for the satisfactory of Uber service, most of them ranked network or

coverage, sense of comfort, customer-oriented, price and attitude of driver in a

descending order. The way all respondents chose Uber service were due to convenient,

70% of respondents were due to discount offer and 55% were due to reasonable price.

Communication approach

82% of respondents obtained information of Uber service from others, 73% from

advertisement and 50% from Internet namely youtube video or online reviews.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

3.2 Timeline

Activity

January

February

March

April
Week number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Read literature

Finalise objectives

Draft literature review

Read methodology literature

Devise research approach

Draft research strategy and method

Develop questionnaire

Administer questionnaire

Analyse data

Draft finding chapter

Complete remaining chapters

Revise draft, format for submission

Print, bind

Submit

KEY DATES 1 2 3 4 5

KEY DATES

1. January 2017: review of literature, research methods and strategy

2. February 2017: compile, pilot and revise questionnaire as well as collection from

three different locations for primary data analysis

3. March 2017: analysis of data for completion of first draft of project report

4. Mid-March 2017: final writing of project report

5. End of March 2017: final submission

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Chapter 4 Findings and Conclusions

According to the findings from questionnaire in Tsim Sha Tsui, Causeway bay and

Shatin, it is summarized as the following.

Most married, tertiary educated, employed male with age range of 31 to 40 as well as 20

to 30, who are working in Hong Kong Island, with a monthly salary of $20,000 to

$29,999.

It is deduced that a lot of customers who have tried Uber service were highly educated

with fair salary. They are not common to be teenagers or senior citizens, possibly due to

financial status and lack of advanced technical knowledge in smartphone or computer in a

modern way. It is known that most white-collars are worked in Hong Kong Island with

higher earning power in their jobs.

Customers are concerned about the illegal issue and cost, for instance, with the same

distance from Magazine Gap to Admiralty MTR station, taxi charged $25 while uberX

charged $30, UberBLACK and 7-seater charged even higher. Nevertheless, it is still

highly desirable due to reasonable price with excellent quality of vehicle. They are known

to be trendy and comfortable.

Most customers choose Uber’s vehicles because it is a brand from the West, which is

assumed to be a trendy lifestyle, like those using iPhone from Apple Incorporation, some

may agree that it is a product for the status of success and it can meet their esteem needs.

Moreover, Uber service is of excellence based on its quality of vehicles and attitude of

drivers. They are pleased with the customers by interaction between drivers and

customers in a friendly way through conversation and drinks provided during transport;

and provided with comfortable seats.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Network of coverage, sense of comfort, customer-oriented, price and attitude of driver in

a descending order are the selling point of Uber service. Service qualities and

recommendation to others are very important regardless of its brand and advertisement.

Uber serves to be convenient, discount offer with promotion of advertisement and

Internet. Customers intend to spend $100 to $499 in a given period of time as a whole.

Still, bad news from Uber is always a shortcoming to customers.

Owing to the results, customers are enjoyed to use Uber due to network of coverage.

Imagine that customers who want a ride, the vehicle should be ready immediately

whenever he or she orders on request. Waiting time can be shortened and they do not

need to concern of occupied taxi when hailing on street. With higher standard of

transport, referral from others is the main marketing strategy adopted, which is far more

better than paying much money on media such as television and magazines.

In sum, by analyzing the low usage of Uber apps in Hong Kong people, people are still

uncommon to use Uber apps particularly over 40 or elderly who are poorly educated. A

lot of Hong Kong citizens are concerned with the bad news about illegal issue of Uber

drivers, due to unlicensed matters, particularly the Uber drivers who were in danger of

prosecution and penalty.

Problems unsolved in Uber’s service

According to the Hong Kong News, on August 11, 2015, police had arrested seven Uber

drivers and three office staffs who allegedly for operating without a hire car permit and

driving without proper insurance. With reference to the “Road Traffic Regulation, Cap.

374D, drivers are required to have a hire car permit for the use of private car to carry

passengers for rewards (not limited to cash)”. Furthermore, in line with the “Motor

Vehicles Insurance (Third Party Risks) Ordinance, all cars in Hong Kong must have the

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

appropriate insurance in respect to the third party risks”. With limited hire permit to be

granted from government (only 886), drivers have no way to buy insurance for their

vehicles to run the business with Uber (Kwan H.C. & Lau E., 2015). Without a hire car

permit and driving without proper insurance, Uber has no way to ensure the registered

drivers who are eligible to be commercial drivers with the required license ‘hire car

permit’. It is true that commercial liabilities insurance for the passenger mentioned in

Uber website does not mean that the operation covers compensation up to minimum

coverage of HKD 100 million according to the Motor Vehicles Insurance (Third Party

Risks) Ordinance. Again, Laurell C., and Sandstrom C. (2016) stated that Uber is not a

kind of technological innovation; nonetheless, it is an institutional disruption due to

circumventing existing regulations.

Challenges

As a revolutionized transportation service with strong impact towards taxi industry,

current law systems stated that Uber is illegal in most cities or even heavily penalized as

no licensed drivers; total or partial prohibition of the services and advertising, fines,

confiscations of cars and other penalties. This may scare away the drivers as partnership

with Uber, less drivers result in less customers for the Uber’s service; as a consequence,

Uber’s vehicles will no longer be found on street.

Besides, copycat is easy to be observed for this business, anyone with a car and driving

license can be a competitor and there are many companies operating in a very similar

ways as Uber. Will it be soon be a history to be replaced?

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Conclusion

Uber app can be a dominated one in Hong Kong throughout the transition from traditional

to technology advancement with potential benefits renowned. With the revolutionary

challenge to the taxi industry, Petropoulos G., (2016) claimed that innovation of Uber

reduce asymmetry. This may improve our quality of life and change our way of

employment as micro-entrepreneur. It can also contribute to the society by reducing

traffic congestion; it means that less unnecessary driving on street. In a medium and long

run, it aids in improving of transportation due to competition and the air pollution due to

less vehicle fumes exhausted on street. With the adoption of different marketing strategies

in an effective way in a technology explosion society, namely SWOT, 5 forces, 4Ps, and

many others in different platforms to promote the industry and boost up its brand with

connection between drivers and customers. The most important limitation in Uber may be

the legal concern, as if the legal issue cannot be solved, Uber industry may no longer be

survived and may be replaced in another way.

Chapter 5 Recommendations

Owing to the problems arise from Uber industry, Uber should find a way out by

communicating with government in Hong Kong for legality by upgrading the maximum

coverage of current commercial liability insurance from USD 1 million to HKD 100

million; as such, Uber can offset by charging additionally 1% insurance cost per trip.

Insurance is important but licensing can be suggested to Uber, who should only use cars

with “for hire permit” and may grant approval from government for the application of

permit for tourism purpose as additional licenses. Also, Uber should help drivers to apply

for the permit if possible. Establishing better and earlier relationships with government

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

such as offering licensed permit for new company to enhance competition in existing

markets, that is taxi industry so as to increase the quality of the travelling experience for

customers. Pushing drivers to obtain such permits by themselves is not a good way but

attracting existing taxi drivers for Uber may be another solution. What is more, the

expansion of Uber industry is very quick around the world; it may be too big to fail

strategy. One additional advice is to reinforce a safety system and improve public

relation. Registered Uber drivers must be drivers with taxi driver licenses to ensure the

quality and security of drivers with name displayed on the dashboard with a more

stringent background checks on the drivers (Kwan H.C. & Lau E., 2015). With work

protection and insurance, this may increase incentives to get rid of legal uncertainty about

liabilities (Petropoulos G., 2016).

Moreover, with benefit from smartphone applications, partnership or acquisition of

technology companies such as Google, or with implementation of app in the smartphone

widgets, that is pre-downloaded in a new smartphone, further investment can be done in

research and development section, as well as insurance and claim section.

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

Appendix:

Research Questionnaire

Randomized sample of 100 respondents at 3 selected locations, such as Tsim Sha Tsui,

Causeway Bay, Shatin

Personal information:

1. Gender:

Male _____________ Female _____________

2. Marital Status:

Single _____________ Married _____________ Divorced _____________

3. Occupation:

Student _____________ Employed _____________

Self-employed _____________ Others _____________

4. Working Area

Hong Kong Island _____________ Kowloon _____________

New Territories _____________ Others _____________

5. Age:

Below 20 _____________ 20-30 _____________

31-40 _____________ 41-50 _____________ Over 50 _____________

6. Education:

Secondary level or below _____________

Post-secondary level ___________

Tertiary level or above _____________

7. Income per month:

Below $9,999 _____________ $10,000-$19,999 _____________

$20,000-$29,999 _____________ $30,000-$39,999 _____________

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

$40,0000-$49,999 _____________ Over $50,000

8. Have you tried downloading Uber apps in mobile phone or tablet?

Yes _____________ No _____________

9. Have you tried Uber service before?

Yes _____________ (please go to Question 11) No _____________

10. The reason not to try Uber service?

11. How many times have you used Uber service in the past six months?

Less than 3 times _____________ 3-6 times _____________

6-9 times _____________ More than 9 times _____________

12. How much did you spend on your last travelling using Uber service?

Less than $100 _____________ $100-$499 _____________

$500-$999 _____________ Over $1,000 _____________

13. How much, in average did you spend on each travel using Uber service in the past six

months?

Less than $100 _____________ $100-$499 _____________

$500-$999 _____________ Over $1,000 _____________

14. Please list the longest distance that you had travelled using Uber service in the past

six months:

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

15. Whom do you usually travel with using Uber service?

(you can choose more than one)

Family _____________ Friends _____________

Colleagues _____________ Others _____________

16. Will you recommend Uber service or Uber apps to others?

Yes _____________ No _____________ (please go to Question 16)

17. Please list the problem(s) you concern not to recommend Uber service or Uber apps

to others?

18. Which type of Uber service did you choose?

uberX _____________ UberBLACK _____________

7-seater _____________ uberASSIST _____________

19. The reason(s) for you to choose Uber service:

Network/Coverage _____________ Price _____________

Sense of Comfort _____________ Customer-oriented _____________

Attitude of driver _____________ Others _____________

20. Comment on the following statement about Uber service:

(1: not very important; 5: very important)

20.1 Uber service is highly desirable than local transport

20.2 Price of Uber service is reasonable with quality

20.3 Using Uber service is a kind of trendy habit

20.4 Uber service provides a comfortable travelling environment

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

20.5 Uber service brings out bad news about passengers’ insurance

20.6 Uber service will be the next lifestyle

20.7 Uber service provides UberX and UberBLACK

20.8 Safety is a major concern for passengers

21. How satisfactory the current status of Uber service?

(1: not very important; 5: very important)

Network/Coverage _____________ Price _____________

Sense of Comfort _____________ Customer-oriented _____________

Attitude of driver _____________ Others _____________

22. Why would you choose Uber service?

(you can choose more than one)

Convenient _____________ High capacity of vehicle _____________

Selection of car type _____________ Reasonable price _____________

Discount offer _____________ Others _____________

23. Comment on the following factors Uber service may influence you.

(please tick your answer)

Very Influential Neutral Not Not very

influential influential influential

23.1 Type of vehicle

23.2 Service qualities

23.3 Price

23.4 Brand

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

23.5 Advertisement

23.6

Recommendation

from others

23.7 Others

_____________

24. Where do you get information of Uber service?

(please choose only one)

Advertisement _____________ Internet _____________

Mobile Apps _____________ Recommendations from others _____________

Others _____________

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 Marketing in Hong Kong: an analysis of rapid growth of Uber service

References:

1. CHAN, J.W.Y., et. al. (2016). Taxi App Market Analysis in Hong Kong. Journal of

Economics, Business and Management, 4 (3), pp. 239-242

2. HONG KONG MONTHLY DIGEST OF STATISTICS JANUARY 2017. Census and

Statistics Department, Hong Kong Special Administrative Region.

3. JOHNSON, K. (2014). “Uber meets local lookalikes in Asia taxi-app wars”

http:ww.phys.org/news/2014-04-uber-local-lookalikes-asia-taxi-app.html. [Assessed

18/01/17]

4. KWAN, H.C. and LAU E. (2015) “How to make Uber work in Hong Kong” Hooray

Securities.

5. LAURELL, C. and SANDSTROM, C. (2016). Analysing Uber in social media –

disruptive technology or institutional disruption? International Journal of Innovation

Management, 20 (5), pp. 1-19

6. LAWLER R., (2015) Uber study shows its drivers make more per hour and work fewer

hours than taxi drivers. http://techcrunch.com/2015/01/22/uber-study [Assessed 18/01/17]

7. PETROPOULOS, G. (2016). Uber and the economic impact of sharing economy

platforms. Bruegel.

8. UBER (2017) “Ride” https://www.uber.com/en-HK/ride/. [Assessed 18/01/17]

9. WIKIPEDIA (2017). “Uber (company)”

https://en.wikipedia.org/wiki/Uber_(company). [Assessed 18/01/17]

10. YING, W. (2003). Marketing in China: an analysis of the rapid growth of the multi-

national fast food chains. (Thesis). University of Hong Kong, Pokfulam, Hong Kong

SAR. http://dx.doi.org/10.5353/th_b2702546. [Assessed 18/01/17]

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