Uber Technologies Inc. is a transportation network company founded in 2009 by Travis Kalanik and Garrett Camp. Based in San Francisco, California Uber Technologies provides a taxi-replacement technology platform that provides an on-demand car service application for the people who use smartphones (Dudley, Banister & Schwanen 495). The Uber has a mobile application that links the drivers and the passengers and is functional in more than 60 countries across the globe. The potential customer gets the application by downloading it and requesting for the nearest available car in their phones. The company was the first web-based transportation network; therefore, the company's unique name attracted the attention of investors over the past years as it has taken control of the market share, overthrowing the traditional transportation companies. Currently, the company has more than 85% of the market share in the smartphone transport application market, therefore has a significant influence in the industry in contrast to its competitors. Uber has resulted in a lot of transport and economic impacts in the places it has ventured in. Just like any organization, there are various transportation economics for Uber Company and how it has influenced the global transportation industry.
Uber Company appreciates the balance between the business model it applies, the needs of the customers and the rapid changes in technology. This act provides them with the capabilities to be proactive and reactive to solve challenges rising as a result of the quick dynamics in the environment. When it started, it spearheaded in the market creating a competitive advantage which was the main hindrance to other companies from catching up with it. Uber company as a first mover enjoys the economies of scale and an extensive established stakeholders network as well as resources that comprise the updated technology, capital, drivers, employees, and customers. This plays a vital role in the achieved efficiency and reduction of cost in the company. The first mover benefit permits the organization to acquire fast and have access to substantial data amounts in the creation of customer-driven market strategies, specialization in workforce and cooperation in the industry (Cramer &Krueger 180). As a result of the long learning curve, the company creates value, cut down the prices and applies more cost-efficient methods into its business model. Currently, it is worth more than $70 billion and one of the top valuable startup companies.
The company has capital that it acquired from being a first mover that facilitated the expansion of the company so fast and take risks investments where the competitors could not. Uber developed itself as a technology organization and not a transport company, which facilitated its global expansion and bypass of the taxicab laws. This indicates how the company is ready to enter the specific market with extensive regulation through the application of the capital-intensive war strategy. Uber has invested widely in the aggressive war and disruption of the taxi industries around the world (Carlos & Edara 63). It has spent a considerate amount in support of innovation, diversification in business and closed strategic ties with the government alongside other business.
Although the company has had significant growth and continuous expansion, it has been facing some problems in its entry and attempted to establish its place in the transportation industry. The primary challenge that is faced by Uber Company its conduction of business and this has been in question by taxi companies, the government, and taxi drivers. The government is concerned with the market Uber operates in regards to the evasion of taxes by the company as it involves the vehicles that are not licensed to carry passengers who pay the fare. It is not arguable that in most countries, public service vehicles (PSV's) should be registered and it is a requirement for them to have an operating license (Brishen 85). The company, therefore, employs a business model that spots a weakness in the legal framework that facilitates them to engage in paying passengers transportation without the requisite pay of the operational license and tax. The company has also had safety concerns. This has been exhibited when the operation model of the company that exposes the passengers to untold jeopardy when the drivers who are not well trained, uninsured and lack a driver's license are engaged in the transportation of passengers. There have been cases where passengers have been involved in greasy accidents that have been recorded and documented in some countries. For instance, there have been complaining of vehicles being involved in accidents and running over people. The other problem is that the company's business model has not been accepted in the taxi industry (Edelman & Geradin 293). There have been massive protests by other taxi drivers across the globe that cites unfair competition practices that are seen in the industry. The main grievances presented in the protest are that the company does not face equal business condition to the other taxi business are exposed to which includes tax avoidance and taxi's regulations place. These protests have been responsible for the unrest in most places as a result of the mode of operation of the company, which destroys Uber's reputation and publicity.
Uber Technologies Inc. has introduced changes in transport through finding the solution to what the client has identified as the main challenges. The company achieves this through an application that connects the passengers to the drivers. The company has made a milestone in innovation which has played a vital role in transportation economics and overcoming some of the trending and global challenges. In the time constraints, the company will be launching the Uber air that engages the use of helicopters to carry passengers. This is significant in the making transportation easier and faster by saving on time that would have otherwise been wasted in traffic jams.
Cramer, Judd, and Alan B. Krueger. "Disruptive change in the taxi business: The case of Uber." American Economic Review 106.5 (2016): 177-82.
Dudley, Geoffrey, David Banister, and Tim Schwanen. "The rise of Uber and regulating the disruptive innovator." The Political Quarterly 88.3 (2017): 492-499.
Edelman, Benjamin G., and Damien Geradin. "Efficiencies and regulatory shortcuts: How should we regulate companies like Airbnb and Uber." Stan. Tech. L. Rev. 19 (2015): 293.
Rogers, Brishen. "The social costs of Uber." U. Chi. L. Rev. Dialogue 82 (2015): 85.
Sun, Carlos, and Praveen Edara. "Is getting an Uber-Lyft from a Sidecar different from hailing a taxi? Current dynamic ridesharing controversy." Transportation Research Record: Journal of the Transportation Research Board 2536 (2015): 60-66.
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