Essay on Uber's Success in the Sharing Economy: Challenges & Opportunities

Introduction

Uber is currently a crucial organization in the sharing economy, where a new economic model has been structured. The new economic model is applied by independent contractors to offer their underutilized resources, such as vehicles. Uber services are less costly as compared to a traditional taxi, making it upend the taxi business. Uber Company experiences a resounding success and strives to expand locally within the United States and internationally.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Save 25%

The success of Uber is marred with various challenges cutting across technical, social, regulatory, and legal obstacles. One of the most notable challenges is fueled by the taxi industry, which claims that Uber has an unfair advantage. Such that, Uber does not comply with the similar licensing requirement as subjected to other taxi services. The taxi industry has argued that Uber does not vet their which pose unsafe condition for driving. In major cities, Uber services based on different concerns. The latest concern is that Uber Industry is subjected to different lawsuits such as lawsuits filed by the company's independent contractors. The presence of Uber in the market has affected the lawmakers to create new policies and regulations that govern the new app applied for the ride-sharing system. Since Uber resources must be increased to meet the regulatory requirements. Because of the regulation, Uber expansion opportunities are hindered.

Background

In 2009, Garrett Camp and Travis Kalanick created a smartphone application to allow the user to connect with the drivers for hire services. The founders attended the inaugural address in Washington, D.C. Uber aimed to facilitate convenient transport at a slightly low cost. Initially, the foundation was called UberCab Inc., which was a privately own firm (Malin & Chandler, 2016). In 2010, the organization was later renamed as Uber Technologies, Inc. Camp and Kalanick, the cofounders, designed the mobile app for Android Smartphones and iPhones (Delimatsis, 2018). The apps were useful in helping the customers to the expected time for the arrival of the Uber drives using the integrated GPS on their smartphones.

The concepts of ease of use of the Uber app attracted many consumers. The passengers only need to download the app on their smartphone, where they pay for a ride for hire via a Transportation Network Company (TNC), applying the UberX platform to take a picture and Scan their credit cards using the camera on the phone. The drivers-for hire for the maintenance, personal insurance, gas, automobile for their cars. In other words, the drivers do not necessarily need to maintain the automobile inventory.

One of the advantages of using Uber is that drivers are allowed to drive their cars when and wherever they want. In essence, drivers are given the freedom to operate their small business enterprises. During peak times, a surge pricing model can be applied. Uber of late has introduced a new tiered structure to replace the initial charge of commission of 20 percent in some cities that had varying rates of commission, which rely on the number of the working hours.

Uber's services are preferred mostly by the younger generation as they do not own them outright. In some countries such as India, most of the citizens do not own a car, which is an advantage to Uber services. Typically, if the majority owns a car, the Uber business is negatively affected.

Alternatives

One of the alternatives is for Uber to identify its target market. By identifying the target market, Uber will establish a stronger marketing mix to allow it to become successful. Like any other transport services, Uber has fewer constraints as compared to Taxi Cabs. In some instances, Uber has encountered different public resistance and regulatory obstacles. Uber services face some regulations in some cities. However, the Uber business model has correctly exploited the use of smartphone technology to connect its drivers, consumers, and cabs. The strategy has been active and less-expensive in buying transportation.

The other alternative is providing several services to consumers, depending on their preference. The strategy is useful when using services such as UberX, which has a low -budget alternative. In some instances, the drivers are allowed to use their cars to transport customers. Other options that can be explored are Uberpool, UberSUV, UberXL, UberLux, UberBlack, and UberSelect (Malin & Chandler, 2016). Even though the services are good, some of the Uber drivers operate on a part-time basis, which inconvenient its operation in specific times.

Proposed Solution

There is a need for Uber to engage in a strategic partnership with other companies to allow them to expand and become successful. Since some of the Uber drivers offer their ride on a part-time operation, the strategic partnership will be useful as it will allow Uber to utilize the resources and knowledge of local organizations familiar with the country's tradition and culture. For instance, in the US, Uber has effectively partnered with American Express. I once witnessed this effective strategy, which saves a lot of time.

Recommendations

There is a need for partners to determine specific prices that should be charge across the countries regardless of the car. For that reason, the Uber services will be more likely to expand and maintain its partners. Ethical standards must be set for every partner to comply with regulations.

References

Delimatsis, P. (2018). From Sacchi to Uber: 60 years of services liberalization, 10 years of the services directive in the EU. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3267963

Malin, B. J., & Chandler, C. (2016). Free to work anxiously: Splintering Precarity among drivers for Uber and Lyft. Communication, Culture & Critique, 10(2), 382-400. https://doi.org/10.1111/cccr.12157