Sunday, April 26, 2015

Uber's Strategic Alliances

In the past year and a half, Uber has really stepped it up with their strategic alliances. Some of their strategic alliances include Spotify, OpenTable, Hyatt hotels, Starwood Hotels, and United Airlines. Each of these partnerships exists for different reasons and they all benefit both companies.

Uber was clever to engage Spotify in a partnership in 2014. This partnership simply made the two apps compatible so that when a Spotify user is using Uber, they can control the music via their phone. This creates value for the customers who tend to enjoy being able to choose their own music. For Spotify, this capability makes their premium service, which must be subscribed to in order to use Spotify from a phone, more desirable.

Hyatt, Starwood, and United all have similar reasons for partnering. These wish to lump the travel experience together in order to boost all of their sales. You can call an Uber from within the Hyatt and United apps (this is really just product placement.) With Starwood though, they have partnered their loyalty program, Starwood Preferred Guest, with Uber so that Uber users can earn SPG points if they use the app while they are guests at a Starwood property. This captures market share from the "loyalty" customers who enjoy earning points that they can later redeem for free nights.

Another strategic partnership is with Times Internet, a major internet provider in India. This partnership is strictly about expanding Uber's market share in India. The deal is centered around a commercial marketing arrangement accompanied by a small investment.

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