UBER - Essay - Grade: A+ PDF

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Essay angående UBER's betydning og forretningsmodel på globalt plan...

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Naveed Neghabat D3

Engelsk A Essay

8/4-2018 Aarhus Handelsgymnasium

Digitalizing the taxi services Ever since mankind planted its very first feet on the ground, an essential objective for the race has been to discover the world. In the beginning, these explorations only took place by foot – as this was simply the only available method. However, as the population grew more intelligent, other means of transportation started to emerge – such as the use of boats, planes, and last but definitely not least, cars. The latter has been an invention, which we have been making extensively use of until this very day. One main goal has been the true driving force for these inventions to gain ground: Increasing the effectiveness of our travels. Both in terms of cost, time, and quality. Consequently, a number of different companies have begun to offer individuals a way of getting around town easily – one of these being Uber. However, this has proven itself not to be entirely free of complications. This essay will firstly account for the concept, which Uber has centered its business model around. Furthermore, the pros and cons of using Uber – both for the drivers, competitors and customers – will be analyzed. Lastly, the essay will attempt to assess the future potential of Uber and other similar services.

Uber is a San Francisco based technology company and has been experiencing more than rapid growth during recent years. The company offers an extra alternative to individuals wishing to quickly get around town – and therefore serves to combine these customers with freelance cab drivers. The system functions solely through a single smartphone app – where payments also are handled online within seconds, which completely eliminates the need for the customer to be carrying cash. As the consumer marks to which destination he is headed, the application locates the nearest available driver, who will be notified. In the meantime, the customer is at any time able to check the current location of his ordered Uber car, whilst the application displays the remaining time, before the customer’s lift arrives. As the passenger steps into the car, everything is taken care of – and he is conveniently brought to the notified destination. Lastly, as the payment is processed, it is split into two parts: A chunk goes to Uber, with the rest going to the driver, who is liable of the any costs associated with owning the car. All in all, it can be concluded that the service offered by Uber is in many ways similar to that offered by regular, traditional taxi companies – however, when having a closer look at the

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Naveed Neghabat D3

Engelsk A Essay

8/4-2018 Aarhus Handelsgymnasium

application, one may see, that the digital solution, which Uber has introduced, has opened up for a much more convenient fare than traditional companies have offered previously.

First of all when analyzing the pros and cons of using Uber, it is important to note, that the even though the company in many ways is similar to a regular taxi service, one will quickly notice that the prices of fares ordered through Uber are most certainly remarkably cheaper than regular taxi fares.1 Naturally, this may be caused by several factors – but is inarguably one of the primary pros, which has drawn a stunning 3.82 million pickups from traditional taxi services to Uber in the period of May through June in 2015 in Manhatten.2 Furthermore, as Uber has become such a widespread service globally, one will experience that their ride will be ready for them in a matter of minutes – in many cases it does not matter where, they are situated or what time of the day, their urges have come to life. However, even though Uber services at first glance are seemingly more economical than black cab fares, this may not always be the case. For instance, Uber makes use of a concept called ‘Surge pricing’ which allows the application to raise the price of a fare – sometimes more than double it up – in case of significant events such as storms, big events, and during peak hours.3 In addition to this, the drivers themselves are held accountable in case of accidents – and are liable for having the proper insurances, should complications occur during a fare. If this happens not to be the case, Uber will not cover the associated costs. Lastly, a vast number of traditional taxi drivers have been complaining heavily about the speedy uprising of Uber – which has resulted in a decline in standard taxi fares, as previously mentioned. Specifically, this change has mainly been caused by the fact, that Uber drivers must not meet the same criteria in regards to license, and does not charge monthly fees to its drivers as opposed to regular taxi companies.4 Consequently, the fares offered by Uber have potential to be much cheaper than their competitors – which has resulted in an almost surging demand for Uber drivers and their services. To sum up, one can tell that there are both a number of pros and cons associated with using Uber as an alternative to a regular taxi services for the drivers and customers, while the competitors have primarily been experiencing cons as a result of the birth of Uber. The pros range from lower fees for drivers resulting in a much easier access to become a driver to a more convenient and 1 Source: Attached document: ’Why is Uber so controversial?’ 2 Source: Attached document: ’What is Uber and what should I think about the controversies?’ 3 Source: Attached document: ’Why is Uber so controversial?’ 4 Source: Attached document: ’Why is uber so controversial?’

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Naveed Neghabat D3

Engelsk A Essay

8/4-2018 Aarhus Handelsgymnasium

cost-efficient solution for the passengers. However, for traditional taxi companies, this has resulted in a significant decline in revenue – consequently making room for angry, dissatisfied taxi drivers.

In order to correctly assess what the future holds for Uber, it is important to take into account the current pitfalls and complications, the company is currently facing. As previously mentioned, the drivers must only meet very few criteria when applying to work for Uber, which means that a majority of 21-year-olds with their own car less than 10 years old, a clean criminal record and 50 dollars in cash are able to become drivers for the company. Some have seen this as a threat of the passenger’s safety and have begun opt out of choosing Uber for their fares. However, it is clear to the naked eye that Uber has a lot of potential in the future – both in terms of continually and gradually spreading out geographically as well as locally which will result in a much more closeknit taxi-service, that may very well outperform the traditional companies. One may argue that Uber must make its drivers live up to the same standards and acquire the old fashioned taxi license, which regular cab drivers are forced to spend up to years of correctly master and thousands of dollars to own. However, if this happens, will prices still be able to stay low? Naturally, one may be able to expect a rise in prices as a consequence. On the other hand, it is important to note, that the cost of the fare is not the only reason for which individuals may choose Uber in replacement of the traditional services. As Uber operates solely digital, this gives the customer many advantages that the old fashioned companies are simply not able to offer. Advantages, which can be expected to be highly valued by the younger generations – a generation, which is very likely to make up for the primary chunk of the taxi driver’s customers in a few years’ time. In conclusion, it can be assessed that Uber most definitely holds a large potential for the future – this is both in terms of spreading geographically as well as continuously making improvements in the locations, where they are already situated. If Uber is able to offer a low-cost alternative to regular taxi fares as well as simultaneously adding more innovative features to their digital smartphone app, the future for Uber may naturally be very bright.

All in all, one must note that the service that the technology company, Uber, offers is in many ways alike the offers from standard taxi companies, these two alternatives have many differences. For instance, the prices of the two differ widely as well as Uber being much more

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Naveed Neghabat D3

Engelsk A Essay

8/4-2018 Aarhus Handelsgymnasium

digitally oriented, making room for a much more convenient overall experience. However, the low prices are mainly caused by less needed requirements in order to become a driver, which has created dissatisfaction among regular taxi drivers, as their customers have decreased sharply. Furthermore, a number of cons also apply for the passenger, as it is the driver’s responsibility to have the proper insurances in case of the parties being involved in an accident during a fare. However, if these cons are sorted out for Uber and viable solutions are found without necessarily resulting in a significant rice of prices, Uber may very well only have seen the beginning of a long-going adventure which is set for success. The world is rapidly becoming more reliant of digital solutions – and Uber is offering just that. The company has digitalized a very traditional industry and has overcome a hefty number of challenges already – if this development continues, there is no saying how large the firm may become.

Words: 1530

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