The case of “Fasten: Challenging Uber and Lyft with a New Business Model”
Access to (Harvard Business Case): Fasten: Challenging Uber and Lyft with a
New Business Model (By: Feng Zhu, Angela Acocella) case study.
• Define the problem/challenge in the case.
• You may consider and research developments and outcomes since the case was written. What
are the recent trends and performance of the company since the case study?
• Apply learnings of agility, business models, digital transformation, technology as an enabler for
change, and platforms to this case study.
• Provide recommendations and consider alternatives. Your recommendations should focus on
how strategy and technology can be applied to understand and improve business outcomes. The
re-statement of facts from the case should be brief. Narrow the focus of facts that support your
analysis, recommendations, and consideration of alternatives.
• Additional questions to consider as you analyze the case and make recommendations with
alternatives:
o What explains the growth of ridesharing companies?
o How did Fasten's business and technology strategies compare to other organizations?
o What is the impact of new or emerging technologies?
Problem/Challenge in the Case
The problem/challenge in the case of “Fasten: Challenging Uber and Lyft with a New Business Model” revolves around Fasten’s attempt to compete with established ridesharing giants, Uber and Lyft, using a different business model. Fasten aimed to address some of the issues faced by both drivers and passengers, such as high commission fees and surge pricing, by implementing a fairer and more transparent approach. However, their challenge was to gain market share and sustainable growth in an industry dominated by well-established competitors.
Recent Trends and Performance
Since the case study was written, Fasten faced several challenges and witnessed a decline in its performance. The company struggled to expand beyond its initial markets and failed to achieve significant growth compared to Uber and Lyft. In 2017, Fasten merged with another ridesharing company, Juno, which also faced difficulties in competing with the dominant players. The merger aimed to combine resources and leverage synergies but did not result in the desired outcome. In 2018, Juno was acquired by Gett, a global ride-hailing company.
Learnings Applied to the Case Study
Agility: Fasten’s attempt to challenge Uber and Lyft with a new business model demonstrated the importance of agility. It is crucial for organizations to adapt quickly to changing market conditions, customer preferences, and technological advancements to stay competitive. Fasten’s failure to expand rapidly enough limited its ability to gain market share and keep up with its rivals.
Business Models: Fasten’s differentiation strategy aimed to provide a fairer and more transparent platform for both drivers and passengers. However, competing with established players required more than just a different approach. It was essential for Fasten to clearly articulate and communicate the unique value proposition of its business model to attract customers and drivers.
Digital Transformation: Technology played a significant role in the ridesharing industry’s disruption. Fasten needed to leverage technology effectively to streamline operations, enhance user experience, and provide real-time data for decision-making. Embracing digital transformation would have allowed Fasten to compete more effectively with Uber and Lyft.
Technology as an Enabler for Change: To challenge industry leaders, Fasten needed to leverage technology as an enabler for change. This could involve innovative features such as advanced algorithms for efficient routing, integration with smart city infrastructure, or leveraging emerging technologies like autonomous vehicles. By embracing technology as a strategic enabler, Fasten could have gained a competitive edge.
Platforms: Uber and Lyft’s success can be attributed to their platform-based business models that connect drivers and riders seamlessly. Fasten needed to develop a robust platform that not only provided fairer pricing but also offered convenience, reliability, and a superior user experience. Building partnerships with local businesses or expanding into adjacent services could have strengthened Fasten’s platform ecosystem.
Recommendations and Alternatives
Focus on Market Expansion: Fasten should prioritize expanding its operations into new markets where there is less competition or where Uber and Lyft have faced regulatory challenges. This would allow Fasten to establish a foothold before the dominant players can enter these markets.
Enhance Technological Capabilities: Fasten should invest in advanced technologies such as AI-driven algorithms for efficient matching and routing, predictive analytics for demand forecasting, and smart city integrations for seamless user experiences. These technological advancements can improve operational efficiency, reduce costs, and enhance the overall customer experience.
Strategic Partnerships: Fasten should consider forming strategic partnerships with local businesses or other service providers to expand its platform ecosystem. This could include integrating with food delivery services or collaborating with public transportation systems to offer multimodal transportation options.
Differentiation through Service Quality: Fasten should focus on providing exceptional customer service and driver support to differentiate itself from Uber and Lyft. By offering personalized experiences, prompt issue resolution, and fair treatment of drivers, Fasten can attract customers who value these aspects over other considerations.
Explore Niche Markets or Verticals: Fasten could consider targeting niche markets or specific customer segments that are currently underserved by Uber and Lyft. This could involve catering to premium customers who seek luxury rides or focusing on corporate clients who require specialized transportation services.
Additional Questions Considered
The growth of ridesharing companies can be attributed to factors such as convenience, affordability, ease of use through mobile apps, and the ability to disrupt traditional taxi services.
Fasten’s business and technology strategies focused on providing a fairer platform for both drivers and passengers by reducing commission fees and surge pricing while ensuring transparency in operations. However, compared to Uber and Lyft, Fasten struggled to achieve rapid growth and market dominance due to various challenges.
New or emerging technologies have a significant impact on the ridesharing industry. These include advancements in AI, predictive analytics, autonomous vehicles, and smart city infrastructure. Embracing these technologies can enhance operational efficiency, improve customer experiences, and enable cost reduction in the long run.