Uber is a riding trend

Robyn Beck/AFP Getty Images. All rights reserved
Robyn Beck/AFP Getty Images. All rights reserved

Introduction

Uber as the leader of sharing economy, occupies an extremely important position and leading significance in today’s society. Uber is committed to providing people with a better third-party network platform and a more convenient and faster network ride platform. At the same time, Uber has developed a brand-new commercial ride mode and more ride options and provided an on-demand service mode in a certain sense.

This paper aims to critically discuss and analyze the relationship and influence of Uber in economy, history and culture/society. In the first part, this paper will briefly summarize the specific situation of Uber to understand how Uber exists in the digital platform. In the following part, this paper will analyze the development and creation process of Uber from the perspective of historical development. After that, this paper will discuss Uber’s network ecological environment. In the last part, this paper will discuss Uber’s revolutionary transformation of the internet.

What is Uber?

Uber is a transportation network company and a mobile application, which can connect independent driver networks with potential passengers (Uber, 2014). Uber unites potential customers with independent drivers through the network, forming a shared economic service (Uber, 2014). At the same time, Uber has explored various driving service modes, such as carpooling, high-end luxury service, delivery and logistics, etc. At present, Uber occupies most of the services in this service industry (Slee, 2015, p.58). Uber, headquartered in San Francisco, California, USA, links passengers and drivers with mobile applications to provide car rental and real-time sharing services (Slee, 2015, p.58). Uber’s success is attributed to its technology, its efficiency in matching drivers and passengers and avoiding the insurance, sales tax and cost of taxis in reality (Slee, 2015, p.59). At the same time, its success is due to the fact that the mode of network sharing economic services is more in line with the development of network technology in today’s society.

The historical beginnings of Uber

As an article by Brian O’CONNELL, Uber was originally founded from a “simple idea”-what if people can ride directly on their mobile phones? A company launched UberCab after a storm without taxis. Uber means “above everything else”. With the help of UberCab, the company enables riders to find customers through mobile phones and find affordable riding orders within a few minutes. A few months later, UberCab gave up “Cab” and officially changed its name to Uber, because Uber is not a formal taxi company. After the company made a certain profit, Uber began to recruit employees and launched interaction on Twitter. It not only shows the ability of social media to connect business partners, but also shows the trend of companies making profits and getting on the right track. Shortly after Graves became CEO, Uber launched UberX, the purest ride-sharing service. Uber gradually takes advantage of the advantages of the Internet and the convenience of sharing platforms, so that people can choose different service types and are no longer bothered by waiting for taxis.

Uber also received a lot of controversy during this period. For example, in 2010, the Metro Administration of San Francisco issued a “Stop and Ban” letter to Uber, accusing them of not having a taxi business license and robbing the original taxi service. It took three years for this contradiction to be resolved. Uber’s advantage has also become an irritating shortcoming of itself. The convenient, fast and cheap sharing mode has also caused the weakening of the taxi industry and the imbalance of the industry economy. Therefore, Uber has to take different measures such as policy revision and reconciliation with the local government.

Uber user holding smartphone Image: Mat Hayward
Uber user holding smartphone
Image: Mat Hayward

Uber’s revolutionary business model

As scholars Mikhalkina and Cabantou(2015, p.61) mentioned in the article, the term business model means that a company can obtain a certain profit through a certain structure and operating system in its operation. Uber, as a convenient transportation network company, connects free drivers and potential customers through the network and gradually forms a network driving supervision mode. Uber actually provides a platform and creates a shared economic service mode of sharing and traveling. Uber not only provides a safe and reliable platform for passengers, but also ensures the interests of drivers.

Guarantee for customers and drivers——as mentioned by Slee(2015, p.58) in the article, in the face of the phenomenon that passengers are waiting for the unequal information of taxis, customers can easily meet the ride demand through mobile phones (network social platform, namely Uber). Uber provides passengers with an extremely convenient ride mode and economic needs to meet different requirements of passengers. As Calo (2017) mentioned in the article, Uber, a network sharing economic service mode, ensures the rights and interests of passengers and drivers

On-demand transportation service——Uber’s on-demand transportation service makes Uber gradually rise and be accepted by people. Uber meets the price requirements of different customers by providing services of different models. As Shaughnessy (2016) mentioned in the article, people seek third-party assets through the “business model” provided by the platform, and in the process, customers get certain benefits from it through platform interaction and revenue, and so does the platform (p.7). Passengers can choose their own needs by choosing business models such as vehicle model and direct route price presentation. This is also Uber’s most distinctive business service model.

“Surge pricing”——Uber uses a calculation method of “surge pricing” to connect passengers with drivers. The operation mode of “surge pricing” is mainly due to the fact that the price calculated by Uber increases when the weather is bad or the passenger demand increases. When the price increases, Uber’s platform will inform the driver so that the driver has the right to choose. The calculation of “surge pricing” mainly comes from the multiplier of standard cost rate, and the specific growth trend will be determined according to the busy degree of local cities.

Source: Gary Fox(2020)
Source: Gary Fox(2020)

Uber’s internet ecology

As Looi (2001) mentioned in the article, Internet eco-economy takes Internet technology as the core to realize the value chain reconstruction under the cross-industry vertical integration, break the industrial boundary and realize cross-border innovation, thus reconstructing the production relations and greatly releasing the user value and economic value. Uber’s ecological network system is composed of suppliers, regulators, competitors, users, partners and competitors in the sharing economy. Uber positions itself as a network sharing service industry in a sharing economy industry.

Uber connects passengers and drivers through the network platform, giving passengers and drivers certain advantages and good experiences, so Uber has also become the main competitor of the ride industry and taxi industry. Uber’s main competitors are Bolt in Europe and Grab in Southeast Asia (Horan, 2019), Lyft in the United States, Ola in Australia and Didi in Asia (Masige, 2020). In real life, the taxi industry is also a competitor of Uber. Uber’s core suppliers mainly come from drivers, who share their cars with passengers. Google is also the provider of the platform to Uber, thus providing maps to social platforms such as Uber and Facebook and is also an advertising provider. Uber connects passengers and drivers, so Uber’s users are mainly drivers and passengers. The main threat to Uber’s business process comes from regulation (Sauviat, 2020). Just like the development history of Uber mentioned above, Uber attempts to transform itself into an internet company.

However, after the requirements of the regulatory authorities, Uber must comply with the regulations and requirements of taxi companies (Sauviat, 2020). Uber is mainly owned by CEO Dara Khosrowshahi and their founder Travis Kalanick and Garrett Camp. Uber has many partners, which are mainly divided into payment methods and partner platforms. Uber’s payment methods are mainly divided into payment partners such as Paypal, Visa and Mastercard. Secondly, Uber platform also cooperates with Quantas, Virgin America and Rideshare Accident Vehicles by stimulating consumption.

 

Below is a diagram of Uber’s internet ecology:

Uber’s internet ecology
Uber’s internet ecology

Uber – A transformative innovation influences the society from multiple perspective

 

  • Uber——a new business model

 

Uber has innovated and reformed the traditional taxi mode to a great extent, regardless of its business service mode or ecological network environment system. As Schneider (2017) mentioned in the article, Uber, a service form (riding directly through mobile phone and network), has developed huge potential customers by using digital media. Not only that, Uber also attracts more customers by providing different service forms. Just like the price model mentioned in the above business model, Uber is a new business model, which can represent the accurate needs of consumers. Uber gives customers a certain choice space and mode in a convenient and quick way. Secondly, Uber, as an intermediary company, connects customers and drivers through digital media, which greatly reduces operating costs to a certain extent. At the same time, this business model gives passengers and drivers double security through the supervision of the third-party platform, which makes Uber stand out in this shared economic service industry. However, this business model is not invulnerable. According to Slee(2015), in the early market, Uber’s business model of avoiding business tax greatly squeezed the development of the taxi industry and made it stagnate. As Penn and Wihbey mentioned, the development of sharing economy like Uber has actually squeezed and replaced the traditional economic model, which makes the development of traditional business model and new business model unbalanced. Similarly, John (2018) also expressed the same view in the article, that the sharing economy is actually a deprivation of the traditional economy, which makes this interest relationship less pure.

Figure 6:“Taxi Cabs vs Uber” by aaronparecki is licensed under CC BY 2.0

  • Uber’s influence on economy, culture/society

Uber creates opportunities for the unemployed and makes the economy grow. Uber gives suppliers certain opportunities and creates a diversified culture. According to Donald (2016), Uber and other carpooling services provide certain job opportunities and sources of funds for people without job opportunities. Uber provides certain job opportunities for the unemployed, which enables them to obtain additional income and capital sources. On the other hand, sharing economy gives people more free space and better opportunities to make money. In other words, this shows that Uber’s sharing economy model has created diversified culture, provided people with more economic sources and made the economy grow. However, Uber, a sharing economy model, has also brought about the negative impact of unequal and overburdened economic development. According to Donald (2016), this kind of carpooling service will cause too much burden on local transportation and bring unfair treatment to local transportation groups. Such as inadequate supervision, tax evasion and violation of laws and regulations. As Donlan (2015) mentioned in the article, Uber’s private property belonging to suppliers is not regulated by the government and laws, which will lead to excessive burden on local transportation and uneven development of the industry.

A final note

Overall, Uber is an important form of networking transformation, and the key to its success lies in Uber’s introduction of a new business model. Uber connects passengers and drivers together through the network, providing a convenient and fast ride platform for suppliers and users, and expanding the mode and structure of on-demand service by using the Internet. In addition, economically, Uber provides a platform to increase job opportunities and income sources for more people. Culturally, Uber has created a diversified cultural service form for people. Although Uber still has many defects in supervision and service, it has to be admitted that Uber has provided many advantages for people in life, economy and culture.

Reference list

 

Calo, R. (2017). THE TAKING ECONOMY: UBER, INFORMATION, AND POWER. Columbia Law Review, 117(6), 1623–1690.

 

Donlan, T. (2015). Uber First. Barron’s, 95(30), 39. http://search.proquest.com/docview/1699514266/

 

John, N. A. (2018). Sharing Economies. In The age of sharing (pp. 69–97). Polity.

 

Horan, H. (2019). Uber’s Path of Destruction. American Affairs, III(2), 108-33.

 

Looi, C.K. (2001), Enhancing learning ecology on the Internet. Journal of Computer Assisted Learning, (17), 13–20. doi: http://doi.org/10.1111/j.1365-2729.2001.00155.x

 

Sauviat, C. (2020). Uber’s business model: An uncertain future. Chronique Internationale de l’IRES, 168(4), 51–71. https://doi.org/10.3917/chii.168.0051

 

Schneider, H. (2017). Uber Innovation in Society. Springer International Publishing.

 

Slee,T. (2015).  On the Move with Uber. In What’s Yours Is Mine: Against the Sharing Economy. OR Books

 

Shaughnessy, H. (2016). Harnessing platform-based business models to power disruptive innovation. Strategy & Leadership, 44(5), 6-14.

 

Uber. (2014, October 12). CTV National News – CTV Television. http://search.proquest.com/docview/1610835409/

 

MASIGE, S. (2020, Feb 21). Uber may be dominating Australia’s rideshare market, but competitors DiDi and Ola are beginning to catch up. Business Insider.

 

Mikhalkina, T. & Cabantous,L. (2015). Business Model Innovation: How Iconic Business Models Emerge. In Fuller, C.B. , Vincent Mangematin (Ed.), Business Models and Modelling : Advances in Strategic Management .(Volume 33).(pp.59 – 95). doi: https://doi.org/10.1108/S0742-332220150000033024

 

Multimedia Reference List

Uber. (2015). How the Driver App Works. Retrieved from

https://www.youtube.com/watch?v=10eiFrRqWlI

 

BRIAN O’CONNELLUPDATED. (2020). History of Uber: Timeline and Facts. Retrieved from

https://www.thestreet.com/technology/history-of-uber-15028611

 

Samar Singla.(2020). How Uber Works: Insights into the Business & Revenue Model. Retrieved from

https://jungleworks.com/uber-business-model-revenue-insights/

 

How surge pricing works. (2020).  Retrieved from

https://www.uber.com/us/en/drive/driver-app/how-surge-works/

 

Cruz Donald. (2016). Ride Sharing Services: Cultural and Social Impacts to Society. Retrieved from

https://medium.com/global-intersection/ride-sharing-services-cultural-and-social-impacts-to-society-1e3909932596