The Disruption of Sharing Economy Platforms: Uber, Lyft, and the Traditional Taxi Service

Topics: Uber Sharing Economy Taxi Service Social Platform

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The concept of the “sharing economy” has garnered considerable recognition due to the recent transformations seen in the global economy. This subtle but profound transformation has prompted a reevaluation of the concepts of employee and worker. In the past, maintaining consistent work characterized by enduring commitments, predictable schedules, and accompanying perks was fundamental to attaining a stable livelihood. However, a new paradigm emerged as scientific comprehension advanced and cultural conventions transformed. The paradigm shift discussed in this context was driven by the emergence of the digital age and a growing focus on achieving a balance between work and personal life. This change placed a higher value on independence, flexibility, and transitory commitments (Borowiak & Ji, 2019). Ridesharing applications such as Uber and Lyft signify this transformative shift’s first stages. These platforms have facilitated the emergence of economies where individuals with expertise in many disciplines, such as driving and design, can provide their skills flexibly, leveraging the benefits of the internet and the attractiveness of adaptability.

Figure 1: The rise of the gig economy over the past decade

This shift is more than a temporary trend; it signifies a profound modification in our collective attitude to our professional responsibilities. The sharing economy has garnered significant interest from those seeking work due to its flexibility and autonomy. The appeal of this phenomenon transcends age groups, including the inquisitive youth seeking knowledge and older people seeking engagement (Gonzalez-Padron, 2017). The adoption of this strategy by the workforce has been accompanied by a similar adaptation by enterprises, enabling them to access a much-expanded talent pool while minimizing the burden of permanent expenses. In the current juncture characterized by technological progress, economic dynamics, and societal conventions, it becomes evident that the sharing economy exerts a profound impact beyond its immediate implications. It is concurrently establishing the foundation for the future labor landscape.

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The Allure of Uber and Lyft

A paradigm shift in mobility has been gradually emerging inside the bustling thoroughfares of urban areas and the serene corners of local neighborhoods. Uber and Lyft, two prominent firms that have gained widespread recognition, are positioned at the forefront of this transformative movement. However, what factors have contributed to the widespread dedication of individuals worldwide towards these platforms? One notable advantage is the outstanding level of usability. The contemporary practice of individuals standing on street corners with outstretched arms in anticipation of a taxi’s arrival has become obsolete. Requesting a trip may be initiated conveniently using a smartphone interface, requiring just a few clicks (Nadler, 2014). Subsequently, the user can track the driver’s whereabouts in real time, receiving an estimated cost and anticipated arrival time. The advantages of transitioning to a paperless system extend beyond the sole purpose of making reservations. The procedure is streamlined throughout. Passengers can communicate and coordinate with their drivers, modify their itineraries as necessary, and disembark from the vehicle without the need to be concerned about providing exact change since the payment process is automated (Paik et al., 2019).

Nevertheless, the transformative effect extends beyond the mere simplicity of the interface. These platforms’ dynamic pricing structures have significantly transformed traditional perceptions and practices in the transportation services industry. The concept of surge pricing, first introduced by Uber and Lyft, entails the adjustment of the base fare to higher levels during periods characterized by increased demand (Koutsimpogiorgos, 2023). Hence, the potential for securing a transportation service at a significantly reduced cost is greater on a Tuesday afternoon compared to a Friday night during peak commuting hours. Critics have legitimate concerns, notably about the escalation of rates during periods of high demand. However, many users appreciate the transparent pricing structure and the potential for cost savings by using the service during periods of low demand.

However, these websites’ allure is not limited to their members. Uber and Lyft have provided drivers with novel avenues for income generation and more autonomy. Without limitations imposed by a taxi company or fixed work hours, drivers using these platforms possess the autonomy to establish their schedules, exercise discretion in selecting trips, and strategically anticipate spike pricing to optimize their income (Schor, 2016). The service’s versatility has attracted diverse individuals, including students seeking supplementary money and seniors seeking to use their spare time to become Uber drivers.

The notable achievements of ridesharing platforms such as Uber and Lyft may be mostly ascribed to their adeptness in leveraging the prevailing societal ideals of convenience, transparency, and flexibility. Not only have they brought about a revolution in transportation methods, but they have also set a higher standard for consumers’ expectations in the digital era. As we observe the urban environment, it becomes evident that these platforms have significantly transformed the transportation sector, ushering us into an era where innovation and service are intricately intertwined (Raval, 2020).

Uber Copter is now available” for all riders by “Uber

The Impact on Traditional Taxi Services

In addition to fundamentally transforming transportation methods, the rapid rise of ride-hailing businesses such as Uber and Lyft have disrupted the hitherto unchallenged supremacy of traditional taxi services. The widely prevalent yellow cab, in conjunction with its counterparts around the globe, has served as a longstanding fixture in urban environments for several decades. These structures symbolized the dynamic and vibrant nature of urban life, embodying the concept of convenience and availability (Dubal, 2019). However, with the emergence of ridesharing applications such as Uber and Lyft, the traditional taxi sector was compelled to make a strategic choice.

The primary observable consequence has been a decline in revenue. The conventional taxi industry has seen a decline in its daily pickups and revenues due to the increasing preference of clients for app-based bookings, real-time monitoring, and pricing that is often similar. auditory landscape of urban areas has seen a notable transformation, as the traditional cacophony of taxi horns has been replaced by the discreet arrival of private automobiles adorned with the recognizable insignia of ride-hailing platforms such as Uber or Lyft. The advent of new technology has coincided with a shift in consumer behavior and expectations (Paik et al., 2019). In contemporary society, individuals commuting prefer using cellphones as a means of transportation, owing to the perceived dependability and accessibility of these modern platforms, as opposed to the unpredictable nature of hailing a cab directly from the street.

why uber can compete with taxi service

The existing challenges encountered by traditional taxi services were further intensified due to regulatory obstacles. Traditional taxi services were trapped in a complex network of stringent limitations and outdated practices. Still, Uber and Lyft effectively navigated the intricate landscape of rules by using their substantial resources, engaging in lobbying efforts, and garnering public support. The regulations initially intended to ensure the safety of individuals ultimately transformed into constraints that hindered their ability to adapt to changing conditions (Borowiak & Ji, 2019). Strikes, protests, and legal battles depicted a state of disorder within the sector, as the conflict between traditional and emerging forces emerged as a prominent topic of discussion in several communities.

Nevertheless, it is often observed that new ideas often arise as a result of experiencing adversity. Certain well-established taxi services, seeing the shifting dynamics, adapted their strategies. The individuals devised their proprietary software, offered competitive pricing, and only accepted electronic transactions. This situation exemplified the age-old adage that one must adapt or face extinction. The transportation industry is undergoing a significant shift, but with inherent complexities, as several individuals grapple with the difficulties posed by emerging competitors (Kirchner & Schüßler, 2019).

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Sharing Economy changes contemporary social values

The emergence of the sharing economy signifies not just a shift in conventional employment frameworks but also a deeper transformation in the values and aspirations of contemporary society. The allure of autonomy and flexibility in the professional setting is increasing as technology progress blurs the boundaries between traditional and modern work arrangements. The emergence of ridesharing applications such as Uber and Lyft signify a notable transformation, introducing new challenges and opportunities. The sharing economy offers individuals the autonomy to establish their schedules and achieve personal objectives, which is a prominent illustration of empowerment for many individuals. This presents firms with the prospect of using diverse skill sets without the need for long-term commitments to individual personnel. We must capitalize on the possibilities presented by this emerging era to foster a future of work that is mutually advantageous.

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.


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