Sharing your car and your life-Uber

A critical analyse of Uber

Uber(Uber Technology Int)  as one of the typical and most popular sharing economy apps, owns 75 million riders and 3 million drivers, operates in 83 countries and over 853 cites worldwide in 2020.(Much Needed, 2020) It becomes the world’s largest and most accepted online car-hailing service company.

This critical internet ecology analysis will focus on Uber and its transformative effects on the internet and the economy, culture, and politics. The first part introduces Uber and its development history, the second section is the bunnies model, the owners, competitions and partners of Uber. Then a diagram that shows these actors concerning each other will be proven. The innovation and how Uber changes our uses of the internet is the last section.

Introduction: The history of Uber

Uber was born because of two riders who could not get a ride, then the two entrepreneurs launched the app in March 2009.(Uber Newsroom) , it is a German word that means “above all the rest”(Brian O’Connell, 2020). Uber is both Online to Offline(O2O) and sharing economy company and offers services of vehicle rental, package delivery and food delivery. O2O is a new e-commerce business model that combines online and offline(Long and Shi, 2017), Uber users to book services online and get services offline. Uber also associated with the sharing economy, the company does not provide cars to users, it provides drivers who have the car to riders who want cars, it is a platform to share cars.

Travis Kalanick and Garrett Camp, the founders of Uber, did not get a ride in a cold winter night in Paris, thus, they wanted to change the travel and transport modes of people. In 2010, the first Uber’s smartphone app launched in San Francisco. From 2009 to 2011, Uber did not position itself as a mid-to-high-end private car rental application but used UberCab as the company name to integrate idle taxi resources to provide consumers with car rental services. It was not until May 2011 that the US transportation administration fined Uber $20,000 for not having the relevant taxi company license, and then the company name was officially changed from UberCab to Uber and focused on the mid-to-high-end car rental market. In 2014, Uber released UberPool for sharing rides and costs for multiple passengers, then UberEats launched for food delivery. The first Uber self-driving vehicle pilot in Pittsburgh in September 2016, and reached 2 million miles in December 2017. Ten years after launch, Uber went public in 2019 and valued at about 82 billion dollars(BBC News, 2019)

Bunnies Model

John N.A argued that technologies enable collaborative consumption and as the media to take place sharing economy. (John.N.A, 2016) For some developing new technology platforms, such as Uber and Airbnb, the sharing economy allows them to grow steadily and provide more opportunities. During 2009 to 2013, the early development period of Uber, it criticised competitions(such as Lyft and Sidecar)’ business model, “providing carriage services without proper licenses and adequate insurance coverage”(Mišo Mudrić, 2019) Uber decided to receive the business model emphasising its commitment to meeting all appropriate standards, safety and quality, and the necessary insurance policies.The phenomenon is called Uberification.

Uber’s business model can be divided into three parts: a managed model, a profit model, and a service model. It works as a digital platform to connect drivers and riders, passengers are the demand, drivers supply the demand and Uber plays the role of media. (Nitin Lahoti, 2019) The core of Uber’s business model is positive internet effects. (Gad Allon)

Uber’s positioning for itself is to “provide passengers with a high-end and more private travel plan.” It is an on-demand O2O website that integrates idle private car resources online to offline, making the website the simplest and most convenient and elegant way to network luxury cars and drivers. The most significant advantage of Uber compared to traditional transportation is cost saving. Drivers do not need a lot of requirements and conditions, and it is cheaper than traditional taxis. ((Ahmed et al., 2018)

To support services to customers, Uber needs the positioning system and the Credit Card of users. First, Uber uses the positioning system in the mobile phone to identify the passengers’ location and then automatically informs the closest vehicle to the rider to achieve an efficient match between the two. Second, after booking the vehicle, the passenger can find the driver’s name and related information from the app. If necessary, they can also call or send messages to the driver in time until they arrive at the customer’s location. Third, the price is exact and no cash payment is required, which is convenient and fast.

Screenshot of Uber app Source: Uber Blog

Customers can inquire about the number of charges in the city where they are located in the app and estimate the fare by themselves. After arriving at the destination, the fare will be automatically deducted from the customer’s credit card. Fourth, pay attention to customer feedback. After the trip, the customer can evaluate the driver based on the ride experience and give the driver valuable comments to improve customer satisfaction. Lastly, riders who use Uber to book a car can share their ride to others who have the near distinction, and the fare will be cheaper. The integration of offline idle vehicle resources into the online, provides resource providers with flexible working methods and improves vehicle utilisation efficiency, and obtains a certain income by charging 20% ​​of each rental car fee. In addition, Uber has a heterogeneous positioning of idle vehicles, providing diversified services such as high-end car rental services, low-end car rental services, and helicopter rental.  In order to prevent demand from exceeding supply during peak demand periods, Uber also designed peak pricing technology to set different price levels according to different periods.(Chen Fen and Liu Jiaguo, 2019) Besides, Uber uses two-way subsidies to attract users and cultivate user consumption habits, so that some customers gradually become loyal customers after receiving multiple services.

Source:Lionel Bonaventure/AFP/Getty

As the current leader in car-sharing worldwide, Uber always points out that it will monopolize the market. (Mišo Mudrić, 2019) The competitor of Uber is other car-sharing companies, like Grab, DiDi and Lyft. The traditional taxi industry has repeatedly resisted Uber’s expansion, but the traditional taxi industry and local government have repeatedly resisted Uber’s expansion. In 2014, hundreds of taxi drivers in Paris blocked the road around Paris Charles de Gaulle Airport to protest against Uber(The Guardian, 2014). At the same year, Jeyup S. Kwaak reported that the Soul government banded Uber to help local apps.

On May 9th, 2019, Uber announced the initial public offering(IPO), until April 2020, Uber has 105 investors, with 20 lead investors and SoftBank Vision Fund as the biggest investor. (Andrew Bloomenthal, 2020) Including Goldman Sachs and Morgan Stanley, behemoth fund managers such as BlackRock, and many angel investors. The two founders Travis Kalanick and Garrett Camp, also provided seed funding and now own approximately 8.6% and 6% of the shares, respectively.

The transforms effects of Uber

Uber has changed the traditional taxi industry and people’s understanding and use of the Internet, it is a revolutionary app. Uber’s innovation is a disruption innovation, it destroys the original social rules, proposes a new business model, adapts new regulatory procedures, increases the development of internet, and changes the connection between people and society.

Since ancient times, humans have been social animals sharing their prey and food for a living. The critical view is that technology has alienated the relationship between people and made society indifferent. However, the sharing economy allows people to share their privacy, blurring society boundaries. Whether it is Uber or UberEats, users can evaluate merchants and riders after completing the service. Take UberEats as an example. Other customer reviews are an important choice for people to choose restaurants. Uber invites users to fill in user reviews and present coupons so that more people are willing to share their personal feelings and experiences.

As a new technology based on the Internet, Uber is hugely dependent on the Internet. Therefore, in some cases where there is no Internet or Internet delay, passengers and drivers will be affected. To solve this problem, Uber created Optimistic Mode components, it has also been integrated into Uber Eats’ delivery partner function, allowing you to get off the car faster when paying with cash. It can also be used for functions that require a quick response but can be synchronized with the server later, such as rating riders or drivers, marking inbox messages as read, or collecting signatures for delivery. (Chris McGrath, Flynn Howling, Jatin Lodhia and Yohan Hartanto, 2018)

Screenshot Of UberCargo Source:Jon Russel

As an innovative company, excessive regulatory intervention is not suitable for Uber’s innovation. Uber has caught the loopholes in regulation and adapted and used regulation to have its own unique business model. Henrique Schneider mentioned an example is the UberCargo, a van rental service in HongKong, the reason why Uber rental van is the van rental market is not regulated, but the taxi market is regulated. Another example in his paper was in California, the California Labor Commission ruled that at least one Uber driver was an employee. Hence, Uber hired drivers as a third-party contractor and operated as a logistics company to provide drivers with customer needs, directions, transactions and other services. In multiple courts, Uber has repeatedly argued that it is not a transportation or taxi company, but a software platform that matches customer needs and supplies. (Schneider, 2017) Uber obeys the regulation and uses the regulation, and achieve diversification.

Summary

Since Uber Technology Int. Launched their first smartphone app in 2010, it developed ten years in many aspects of people’s lives. Not car sharing, Uber but also has services for food delivery, cars rent and self-driving vehicles. It takes advantage of the sharing economy and O2O and uses the Internet as a carrier to establish a unique platform and a brand-new business model, creating Uberilification. While adapting to supervision, make services more diversified and make people’s lives more convenient. Uber changes lives and changes the industry.

                                                                         

Reference List:

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BBC. (2019, May 10). Uber valued at $82bn in share listing. BBC News. https://www.bbc.com/news/business-48222567.

Bloomenthal, A. (2020, August 28). Uber’s Investors. Investopedia. https://www.investopedia.com/insights/ubers-top-investors/.

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Kwaak, J. S. (2014, July 21). Seoul Moves to Ban Uber, Plans Own App. The Wall Street Journal. https://www.wsj.com/articles/BL-KRTB-6239.

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