UBER Car Sharing Business Case Study
Most businesses that adopt the “sharing economy” approach are often welcomed with mixed reactions, Uber is not an exception. The sharing economy simply refers to a system where assets, products, or services are enjoyed by private individuals for a set fee or even for free.
The system allows interested users of the commodities to access it mostly via the internet. This makes it easier for individuals nearby and those that are far away to have easy access to the system. Uber adopts this system with the aim of introducing a much-needed innovation to the transport industry that will make the life of the people easier.
The technology company pursues this objective through its mobile phone application and website. Individuals that wish to request a ride can easily do so by logging into their personal account on the application or website and providing details of their destinations. The systems automatically search for available drivers in the vicinity and then connects the passenger with anyone who accepts the offer.
The system allows the driver to notify passengers about his/her arrival by hitting the ‘Arriving now’ tab which automatically sends a text message. The tech company is able to track a passenger’s GPS coordinates so as to help the driver meet up with them without any difficulties. This is especially important for drivers that are not conversant with the location of places within a particular city.
Interestingly, the application allows passengers to track the estimated time before the arrival of their ride as well as how long the entire drive will take. There is usually no need for cash as the application requires prospective passengers to provide details of their credit card when signing up for an Uber account.
Passengers are charged electronically and receipts are sent via email immediately after they are alight. Uber application also provides for a rating system where passenger and drivers can rate their experience after the ride. This helps the company to discontinue the services of poorly rated drivers. The popularity, acceptance, and success of uber since its inception is attributable to its sharing economy system.
Uber’s innovation in the transport industry also includes working with drivers who are deemed to be independent contractors. This is because, the tech company does not issue licenses, neither does it employ these drivers. Individuals who fulfill the requirement of the company may signup to drive and if approved, will be allowed to work on his/her own time.
Uber believes that this system will help create an efficient, simple, and more comfortable experience for both passengers and drivers. With its sharing economy system, the company has been able to cater to an easily accessible on-demand driving service in luxurious vehicles.
However, As already stated above, the success of uber has attracted a mixed reaction from the populace especially the government. Organizations and individuals who go against the sharing economy of uber argue that the system is just another way to evade taxes, and legal obligations as well as disregard key regulations.
For instance, uber pays less tax than expected, which is deducted from the company’s 20 percent share from the fares paid by passengers. There are also concerns with regard to drivers working overtime in order to fulfill their personal financial requirements. This leads to working for a longer period of time, which may be detrimental to both drivers and passengers.
Uber’s innovation in the transport industry has also lead to reduced productivity and income for traditional taxis. However, instead of treating this as a setback, it seems traditional taxi drivers have welcomed the innovation positively and have shown that they are up for the challenge. For instance, in 2016, TfL (Transport for London) requested black cab drivers in London to accept contactless and credit card payments.