Question

Currently the big risk for business is how to survive in this unprecedented global economy. How to reduce the negative impact and then how and when to restart. You will need to discuss the impact on either GM, Under Armour or Uber. Need to do research. The Pandemic (covid-19) is hitting the global economy and creating unprecedented risk for managers. The risk is hitting the supply chain as well as demand for products (consumer demand). Select one of the three global companies (Uber, General Motors-GM, or Under Armour) and discuss how has the pandemic impacted their operations from the demand side (consumer demand) and supply (supply chain)? Second how has management responded to this situation? Next, provide recommendations (at least 2) how the company should try to reduce the negative impact of this unprecedented global disruption. (Must address how to handle both the supply and demand sides in your recommendations.) This topic will require you to do research about the company and covid-19, the company’s financial condition, facilities, etc. Last, are their parts of the company’s operation which are not impacted? If so, why? I’ve provided some basic info in Resources in folder Pandemic. (Helpful Hint: Uber’s supply is its drivers.)

Answer 1

The pandemic has affected ecnoomies all over thw world. All sectors of the economy are down. In this situation, it is not very difficult to see how Uber might have also faced the brunt of the situation in the current scenario. The following are the maor ways in which the current situation has impacted Uber -

1.) The overall demand for rides has gone down massively. Even before the imposition of the lockdown, the news of the virus itself lowered the demand for rides as people started exercising their own caution and not going out much. Then with the imposition of the lockdown, there are almost no rides called for, mainly because restaurants, entertainment centres and most importantly work places are all closed.

2.) Since the demand was low, to lower the costs and hence the losses, the owners and operators laid off a lot of the drivers, and they cut down on the supply of rides as well.

3.) The drivers were also sceptical of taking too many rides or of talking to their customers and interacting freely due to the fear of contracting the virus.

4.) A very cheap method of Uber travel was Uber Share in which riders got to pay lesser while still being able to reach their destinatoin, by sharing their rides with other riders. The threat of this virus put a stop on that too as the ride sharing was seen riskier in the face of the communicable nature of the pandemic.

5.) Uber has reported $2.9 billion quarterly loss during the pandemic as they see the lowest demand ever of their rides and have been one of the sectors massively hit by the pandemic.

Measures to be taken -

Some of the measures that can be taken by Uber to be able to survive the pandemic is as follows

1.) Cut on the labour employed. As rash as it sounds, to be able to survive in the face of this pandemic, Uber has to let go of some of its employees to cut the losses. This can be for an interim period and Uber can call back its employees once the market becomes better.

2.) Once the lockdown is about to end, there us going to be a massive upsurge of people trying to get parts of their normal life back, and Uber has to cash in on this. Uber has to offer rides at lower costs and has to increase supply to be able to recover the losses.