UNIVERSIDAD AUTÓNOMA DEL ESTADO DE MÉXICO

UNIDAD ACADÉMICA PROFESIONAL CUAUTITLÁN IZCALLI

Tema

Activity 8. Debate about Interpretation and analysis of the KPI

Estrategias De Competitividad Logistica 2025A Gpo. 4L

Profesor: Alfredo Gómez González

alfredogomgonz@[Link]

Nombre de los integrantes del equipo:

Ambar Ximena Reyes Sevilla

Dulce Valeria Camacho Padilla

Ángel Jafet Mogollan

CUAITITLÁN IZCALLI, ESTADO DE MÉXICO,31 DE Marzo del 2025

Optimizing Uber’s Supply Chain through Logistics Strategies
1. Background of Uber

Uber Technologies Inc. is a global transportation company that connects passengers

with drivers through a digital platform. Founded in 2009, Uber has revolutionized urban
mobility, expanding its services to over 70 countries. In addition to ride-sharing, Uber
has diversified its offerings to include Uber Eats (food delivery), Uber Freight (logistics
for cargo transportation), and Uber Flash (package deliveries).

Uber’s operations rely heavily on logistics and data-driven decision-making. Its success
depends on efficient driver-passenger matching, real-time navigation, and demand
forecasting. However, despite its advanced technology, Uber still faces challenges in
optimizing its supply chain.

2. Supply Chain Aspect to Improve

One of the key challenges Uber faces is optimizing driver allocation to reduce
passenger wait times and increase driver efficiency. The inefficiencies in Uber’s supply
chain can lead to:
• Long wait times for passengers.
• Increased empty miles (distance traveled without passengers).
• Lower earnings for drivers due to idle time.

3. Problem and General Objective

The current driver-passenger allocation system does not always optimize efficiency,
leading to increased wait times and operational inefficiencies. This issue is particularly
evident during peak hours or in areas with fluctuating demand.

[Link] Objective:

Implement a logistics strategy to improve real-time driver allocation, minimizing wait

times and maximizing ride efficiency. This will enhance customer satisfaction while
increasing profitability for both Uber and its drivers.
[Link] and Justification

Among the proposed strategies, real-time route optimization is the most effective. This
strategy addresses Uber’s core inefficiencies by leveraging AI and real-time data to:
• Reduce wait times for passengers.
• Minimize unnecessary driver mileage.
• Improve overall operational efficiency.

Uber can implement this strategy through machine learning models that predict traffic
patterns, integration with live traffic systems like Google Maps, and historical ride data
analysis to optimize driver assignments.

strategy description benefits

Real-time rout Implement Al- based Reduce wait times and
optimization algorithms to analyze live empty miles.
traffic data and adjust driver
routes dynamically.
Advanced demand Categorize passengers by Decreases driver
segmentation location, destination, and detours and optimizes
ride frequency to assign the ride assignments.
closest and most efficient
driver
Dynamic driver incentives Adjust fare prices and Ensures sufficient
bonuses un real-time to driver availability
motivate drivers to operate where needed
in high-demand areas.

Customer satisfaction and revenue per trip

Month Customer satisfaction score (1-5) Revenue per trip C

January 4.6 12.50
February 4.7 12.80
march 4.8 13.20
interpretation and Analysis of KPIs in Uber

Introduction

Key Performance Indicators (KPIs) are essential metrics used to evaluate the efficiency
and success of a company’s strategies. In the case of Uber, KPIs help measure
operational performance, customer satisfaction, and financial health. Given Uber’s
business model, which relies on both drivers and passengers, the selected KPIs focus
on service efficiency, user experience, and profitability.

The main KPIs analyzed in this report are:

1. Ride Completion Rate – Measures the percentage of completed trips out
of the total requested.
2. Driver Utilization Rate – Evaluates the proportion of time drivers spend
with passengers versus waiting for requests.
3. Customer Satisfaction Score (CSAT) – Reflects the average rating given
by passengers.
4. Revenue per Trip – Indicates the average earnings per ride, considering
fare structures and promotions.

Analysis and Interpretation of Uber’s KPIs

The following tables present Uber’s key metrics and their performance over a three-
month period.
Ride Completion Rate and Driver Utilization Rate

Explanation of Table 1:
The Ride Completion Rate has remained stable at 90%, indicating Uber’s efficiency in
fulfilling ride requests. The Driver Utilization Rate shows a slight increase, suggesting
improved demand-to-supply balance, which benefits both drivers and riders.

month Ride request Completed rides Ride complete

January 1,200,000 1,080,000 90%
February 1,150,000 1,035,000 90%
March 1,300,000 1,170,000 90%
Customer Satisfaction Score and Revenue per Trip

The Customer Satisfaction Score (CSAT) has shown an upward trend, indicating an
improvement in rider experience and service quality. Revenue per Trip has also
increased, reflecting better fare management and potential growth in ride demand

month Customer satisfaction Revenue per trip

score (1-5)
January 4.6 12.50
February 4.7 12.80
March 4.8 13.20

[Link] Uber, three potential strategies to improve its logistics and supply chain efficiency
are:

1. Dynamic Pricing and Route Optimization Using AI

• Why it can be developed: Uber already uses dynamic pricing, but further
integration of AI-driven route optimization can enhance driver efficiency and reduce fuel
consumption. By analyzing traffic patterns in real-time, AI can suggest alternative
routes, leading to faster trips and reduced operational costs.
• Impact: This strategy would optimize driver availability, reduce wait times
for passengers, and enhance overall customer satisfaction.

2. Expansion of Uber Green (Sustainable Fleet Strategy)

• Why it can be developed: Uber has already started investing in electric
and hybrid vehicles through the Uber Green initiative. Expanding this program by
offering financial incentives to drivers who switch to EVs would reduce carbon
emissions and align with global sustainability goals.
• Impact: This would improve Uber’s brand image, attract environmentally
conscious users, and potentially qualify for government incentives or tax breaks.

3. Integration of a Predictive Demand Forecasting System

• Why it can be developed: By leveraging big data and machine learning,
Uber can predict demand surges before they happen. Analyzing user behavior, events,
weather conditions, and historical trends would allow Uber to better allocate drivers in
high-demand areas.
 • Impact: This would improve service reliability, reduce surge pricing
complaints, and increase driver earnings by reducing idle time.

The best strategy to implement would be the integration of a predictive demand

forecasting system.

Reasons for Choosing This Strategy:

1. Improved Service Efficiency – Predicting demand in advance ensures
more drivers are available in high-demand areas, reducing customer wait times.
2. Reduced Customer Frustration – Fewer instances of surge pricing would
lead to better customer retention and a stronger brand reputation.
3. Higher Driver Earnings – Drivers can strategically position themselves
based on forecasted demand, leading to more trips per hour and higher income.
4. Scalability – Unlike physical infrastructure investments (e.g., switching to
electric vehicles), a data-driven demand forecasting system can be scaled globally with
lower costs and faster implementation.
5. Competitive Advantage – While Uber already uses some demand
forecasting, enhancing AI and big data analytics would allow it to stay ahead of
competitors like Lyft and Bolt.

Conclusion

Based on the KPI analysis, Uber demonstrates consistent operational efficiency and an
improving customer experience. The Ride Completion Rate remains high, ensuring that
most ride requests are successfully fulfilled. The Driver Utilization Rate has improved
slightly, optimizing driver earnings. Meanwhile, the Customer Satisfaction Score and
Revenue per Trip have shown positive trends, indicating that Uber’s strategies, such as
dynamic pricing and service improvements, are yielding favorable results.
References

• Chopra, S., & Meindl, P. (2019). Supply chain management: Strategy, planning,
and operation (7th ed.). Pearson.
• Christopher, M. (2016). Logistics & supply chain management (5th ed.).
Pearson.
• Tang, C. S., & Veelenturf, L. P. (2019). The strategic role of logistics in the
industry 4.0 era. Transportation Research Part E: Logistics and Transportation Review,
129, 1-11. [Link]
• Wang, H., He, L., & Chen, L. (2020). Real-time ride-sharing optimization
using machine learning: A case study of Uber. Journal of Transportation Research Part
C: Emerging Technologies, 114, 244-261. [Link]
• Ulmer, M. W., Thomas, B. W., & Ulmer, M. W. (2018). On the role of
machine learning in dynamic vehicle routing. Computers & Operations Research, 100,
144-154: [Link]