Benefits of Business Analytics

Benefitsof Business Analytics

Benefitsof Business Analytics

Asa business solution, business analytics is a valuable tool since itcan be used to improve its operations in an excellent way. Thissolution makes it possible for a company using it to constructscenarios and analysis models that can be used to draw insights intorealities and also serve as predictive models for the future ofbusiness (Rogers,2015).Business analytics is comprised of components such as statisticalanalytics, data mining, and predictive analytics. This essay willexplore the various benefits of business analytics in an organizationusing Uber and Lyft as case studies.

Uberand Lyft


Bothcompanies operate in a business environment where sharing of datarelating to the prices of rides with their clientele base isnecessary. Utilization of this activity tool can help both companiesattain efficiency in service delivery (LasVegas Review, 2016).Additionally, business analytics will help the two companies respondpromptly to the data needs of their customers especially when itcomes to driver availability. With this tool, alignment of businessstrategy is possible allowing Uber and Lyft to increase theirrevenues tremendously.


Thebusiness model of Uber is centered on big data, and they haveharnessed this data in their success strategy through crowdsourcing.With business analytics, Uber can calculate fare prices instantly andput their drivers in the know after rides. Lyft does not utilizebusiness analytics and because of this, calculation of fare pricestakes too long. Sometimes their drivers are alerted about the fareprices the following day after they have offered a ride to a client.Uber uses data analytics in decision making about the drivers theywant to work with. There is a customer rating system and drivers whoscore below 80 percent are excluded from the service. With Lyft, thismay not be possible because they have not effectively harnessed datamining as a tool in their operations.

UberSuccess Rationale

Amongall the companies providing riding services, Uber has establisheditself as a premier company in this competitive business. Theirsuccess strategy can be attributed to their ability to address abroad range of consumer problems. The consumer is usually at theheart of their business model. To meet all the customer needs even asthey emerge, the company relies on business analytics as a tool toprovide their customers with data about the availability of driversin their regions as well as the fare prices. This is done on realtime basis and has given Uber a face of efficiency in servicedelivery.


Havingestablished its presence in almost all the great cities in the UnitedStates, the company had a massive database of drivers and thereemerged a need to use business analytics to manage the data and linkup customers with suitable drivers in their locations (Gabel,2016).Lyft is a start-up company with fewer data to manage, but businessanalytics is a tool they should consider in the near future ifexpansion into newer niches is among their strategies. Time thejourney will take is among the considerations of fare prices forUber. For this reason, they had to adopt business analytics to helpinclude an adjustment of time to the fare prices. Lyft only considersdistance as a factor in charging their customers for rides.


Onemajor assumption adopted by Uber in its operations is that loweringprices will increase revenues (Rogers,2015).This is why they incorporated time as a factor in their fare pricecalculations. Indeed, lowering of prices below those charged bytraditional ride companies increased the number of clients andconsequently the revenues. Uber assumes that its drivers areemployees, and the rating system is used to fire drivers that do notmeet the needs of their customers (LasVegas Review, 2016).


Inconclusion, business analytics is critical in decision making anddriving the future strategy of a company. As seen from the case ofUber, it has become the most successful ride service provider in abusiness environment that is highly competitive environment just byrelying on business analytics as a tool to meet all the needs oftheir clients. Companies, especially those dealing with large datacan benefit greatly by adopting the use of this tool.


Gabel,D. (2016). Uber and the Persistence of Market Power. Journalof Economics,Vol. 50 (2), 527-534

LasVegas Review (2016). Taxis adjust to presence of Uber, Lyft. LasVegas Review – Journal

RogersB. (2015). The Social Costs of Uber, TheUniversity of Chicago Law Review