Time to get an Uber for the taxi industry

Assignment 3

Google maps con Uber
Figure 1: Google maps con Uber. Image: DownloadsourceES, CC BY-NC-SA 2.0

Foreword

Hailing a ride is just one click away as Uber promised (Uber, 2020). In addition, it seems that drivers have a flexible working schedule (Witt, Suzor & Wilkström, 2015, p. 174). Is the whole business operation as idealistic as it seems? This critical analysis aims to unleash the harsh reality behind a digital disruptive innovation and through providing a brief account of the Uber company;  its historical origins about how Uber evolves into an influential company in the mobility service provider field and the reasons behind its success in developing an innovative business model. The analysis will proceed to uncover Uber’s internet ecosystem and finally discuss Uber’s internet transformations. 

What is Uber?

critical analysis

Uber is an intermediary company that offers door-to-door ride services for riders by matching them with available drivers all operationalized on a digital software application, known as the Uber app (Tillman, 2019). By typing your destination and personalizing your pick-up spot, a display of real-time estimated cost will be presented and connect you to a driver with the option of a cashless ride (Uber, 2020). The eligibility to be a driver is a registered vehicle and a minimum of one year of driving experience (Tillman, 2019). Because a private asset is being shared to serve another individual’s way of commuting to another place (Schneider, 2017, p. 47), Uber’s operation elicited humanity’s tradition of sharing resources to ensure the continuity of the society’s operation, one of the concepts of sharing economy (John, 2018, p. 75-76).

Uber

Figure 2: Uber. Image: stockcatalog, CC BY 2.0.

The story behind the ride-hailing giant

It all started with the frustration of two friends, Travis Kalanick and Garrett Camp being unable to get a ride on a snowy night in Paris back in 2008 (Uber, 2020). This frustration ignited the inspiration of a software application to serve a ride request conveniently which turns into the core objective of Uber, connecting passengers and drivers instantly with just one click on a button (Uber, 2020). The Uber app was initially named UberCab.com and was being experimented with for its service- testing in San Francisco back in 2009 (Blystone, 2019). The pair marketed their app by providing free rides for participants towards various tech events, akin to a 50% discount offer for new users of the Uber app in the present, the app’s innovative design and successful marketing campaign through providing incentives to secure more loyal users soon took the world by storm (Brovkin, 2017). Subsequently, it was launched in May 2010, in San Francisco (Blystone, 2019). The early steady rise was seen when the initial launch of the UberCab was raised 11 million in 2009 and later renamed as Uber and had a monstrous growth in the capital of 37 million to enable Uber to expand its international market in 2011 (Anwar, 2018, p. 60). The relatively early entry to the international market and product expansion managed to secure its legitimacy in the transportation industry even when new competitors were introduced in the market, notably Lyft which was founded in 2013 (Anwar, 2018, p. 60).

The sorcery behind Uber’s business model 

Previous literature praised the architecture of the software application as a strategic business administration and advanced service that benefited Uber, drivers and riders (Schneider, 2017. P. 49-50; John M, 2017, p. 3). Extending onto those strengths that Uber is notably known for, I want to further argue that Uber’s disruptive business model is built on the basis of harnessing and filling on the technological gap that has been existing in the taxi industry noted by Schneider (2017, p. 47) with the normalized socio-cultural practices and values generated under the Internet era. Schneider pointed out the distinctive features of what Uber can offer users, for instance: riders have the power to personalize their ride experiences (2017, p. 49) while drivers can maximize their income through using a driving monitoring software program as a customer service standards guideline (2017, p. 53) in contrast with the time- consuming service waiting time for passengers to call the company for a ride (2017, p. 40). Moreover, Uber took advantage of the nature of a digital intermediary platform in which it sparked an interwoven and infinite attraction law between drivers and riders in which the article specifies more riders than more drivers and this circuit go on requires little capital (John M, 2017, p. 3) compared to the traditional taxi industry’s tremendous maintenance costs on taxi cabs (Schneider, 2017, p. 40). These active dynamics that both riders and drivers and Uber’s burdenless business administration are exhibited towards the ultimate cultural value of the Internet era which is empowerment as noted in a short article by Barlow in which he highlighted how the Internet represents independence, decentralization, and freedom (1996). These values have governed society in modern times and the taxi industry has subsequently overlooked the fact that it should manifest these digital era values into their business model. Subsequently, Uber preyed on their unawareness and made a breakthrough in transportation.

Uber e táxis em São Paulo

Figure 3: Uber e táxis em São Paulo. Image: nuclimeditorial, CC BY 2.0.

Uber’s ecology

Industry position

Uber was coined by the classic example of “sharing economy” influential startups (Harris, 2017, p. 271). Uber focuses on the ride-hailing business and extends the concept of “transporting” to meal delivery and shipping loads known as UberEats and UberFreight (Uber, 2020). 

Owners

Amidst previous scandals in Uber, Travis Kalanick’s CEO position is replaced by Dara Khosrowshahi (Kollewe & Rushe, 2017). The major investor of Uber is SoftBank which aims to assist the company in advanced technological transportation development projects (Levy, 2019).

Users

Riders of Uber are no longer exclusive to the privileged and instead become a popularized form of transportation due to expansion in ride options (Jungleworks, n.d.). Customers that request a food delivery service is another user segment under Uber’s second product, UberEats (Uber, 2020). 

Suppliers

Anyone that owns a car and is financially capable of being liable for all maintenance costs in order to provide commuting service for passengers is Uber’s suppliers, namely the Uber drivers (Wallsten, 2015, p. 3). While Uber keeps 20 percent of every ride transaction, the rest goes towards the driver (Schneider, 2017, p. 49). 

Partnerships

Uber partnered with DrinkWise to promote drinking with responsibility and safety (Uber, 2020), RedCross for charity delivery service (Uber, 2020), and Dettol to further solidify customer’s trust in Uber during a health crisis (Taylor & Denman, 2020) to glorify and expand the flexibility of Uber’s brand (Swaay Partner, 2020).

Competitors

Major competitors include Ola known for its “start code” feature that acts as a security and verification check before a journey starts (Srivastava, 2020), and Lyft for its price transparency (Chen, 2019).  

Regulators

Uber’s complex jurisdiction nature has made regulations a hard conquest in other countries. Uber proposed the idea of using its own app’s design to self-regulate (Witt et al, 2015, p. 181).

Uber as the lens to refine the Internet landscape

How has Uber’s transformative effect be manifested in understanding the way the general public perceives the Internet? One must dive in to critically analyze Uber’s business operation and its implications to answer this question.

 

Figure 4: Uber’s ecology map designed by Man Kwan Cheung

Uber’s employment practice and twisted labor dynamics

Uber’s recruitment advertisement matched with the initial utopian expectations of how we pictured the Internet as noted in Barlow’s declaration in which the Internet is coated with the notion of equality and empowerment, any traditional practices from previous industries is strongly opposed to in this document (1996). However, the harsh reality of Uber’s treatment of drivers who are belonged to vulnerable and marginalized groups in the society with disadvantaged backgrounds (Zwick, 2017, p. 686) transformed prior beliefs on the aforementioned concepts of equality and empowerment (Barlow, 1996) in which it was a facade to lure and deceit those groups of individuals to work as a slave. An example of Uber drivers’ outcry during COVID19 will be used to illustrate this argument. The strong contrast against traditional “nine- to- five” work mode plus constant exaggeration on possible incomes (Witt et al, 2015, p. 182) as well as lenient screenings to lower the entry requirement of being an Uber driver (Zwick, 2017, p. 686) seemed like a good exchange, yet with the popular belief that this will not be an actual career to the workforce (Goggin, Vromen, Weatherall, Martin, Webb, Sunman & Bailo, 2017, p. 35), it seems plausible for Uber to secure a group of long- term drivers to survive (Zwick, 2017, p. 686). Transposing this tactic towards the case of the Uber drivers working during COVID19, those Uber drivers were financially disadvantaged which continues to drive is the only option (Dubal & Whittaker, 2020). Uber created the customer review system as an incentive to boost the work productivity of drivers (Zwick, 2017, p. 686) meanwhile demanding drivers to pay ongoing mandatory car maintenance cost albeit in a midst of a public health crisis (Dubal & Whittaker, 2020) is a manipulative way to locked drivers into a life- dependent work contract and further mirrored the arbitrary nature of labor dynamics in the Internet era.

Figure 5: Uber drivers pay tribute to colleagues lost to Covid-19: ‘We’re also human beings’ Video: Guardian News. YouTube. All Rights Reserved. 

Uber and the government’s role in legal regulations

Uber’s proposed model of regulation reflected that the Internet’s self-governance concept as Barlow conceptualized can be manipulated by technological companies like Uber (1996). The emergence of digital companies forced a change in the government’s role in influencing regulation policies (Karppinen, 2017, p. 98). Uber’s non-tangible nature reflected governmental institutions’ limitations onto posing any regulatory rules that can feasibly operationalize on Uber (Witt et al, 2015, p. 177) and in order to overcome this, Uber convince the public that since customers utilized the customer review system to rate ride experience hence service quality is justified through rider’s own experience, this refined customer and driver’s position as self-sufficient enough to promote self-governance in the newly established digital transportation intermediary platform (Witt et al, 2015, p. 182). Looking at the website of Uber in regards to the COVID19 resources, Uber is legitimizing the work conditions with the gimmick of “helping everyone amidst of a crisis, our company will always stay by your side” (Uber, 2020). In the turbulent times of a public health crisis where government priorities might not be focused on the operations of a digital ride intermediary platform, it provided a favorable distraction to enable Uber to romanticize the regulatory landscape and set up with their own rules without proper appraisal (Witt et al, 2015, p. 181). 

Closure

Uber created another legacy in providing passengers a convenient ride experience that is more personalized and more advanced than the taxi industry could offer (Schneider, 2017, p. 49). Yet, being technologically innovative does not mean that society has to keep a blind eye on its implications to society and blindly succumb to Uber’s problematic realities. Through the case study of Uber’s twisted labor dynamics and shifting trends on regulating a digital commercial platform, this analysis revealed our expectations of the utopian socio-cultural values of the Internet might be a hard conquest to achieve.

Bibliography

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Embedded multimedia citations

Google maps con Uber by DownloadsourceES is licensed under CC BY-NC-SA 2.0.

Guardian News. (2020). Uber drivers pay tribute to colleagues lost to Covid-19: ‘We’re also human beings’. YouTube. Retrieved from: https://www.youtube.com/watch?v=D4lQRTj5Zwg&feature=youtu.be

Uber by stockcatalog is licensed under CC BY 2.0

Uber e táxis em São Paulo by nuclimeditorial is licensed under CC BY 2.0

Man Kwan Cheung
About Man Kwan Cheung 3 Articles
Hi! My name is Jacqueline and I am majoring in Psychology and Digital Culture, currently in my second year. I aspired to incorporate my knowledge in Psychology into understanding the digital landscape, particularly in how a lot of the digital products we see in everyday life manipulates the psychological mechanisms humans have and shape our behavior.