Uber: The Economists' Dream - A Look at Its Benefits - Essay Sample

Introduction

Uber is a taxi alternative that was established in 2015 at a high capital startup price, ranking it higher than most of the existing companies. Many people who support uber have cited availability, low cost, convenience, and seamless transactions as the main reasons why uber is economic friendly. Drivers have cited higher earnings and many economic opportunities as the advantage of this traveling model to the economy. Uber is an economist's dream due to different reasons; much of it has been attributed to disrupting the overpriced and sclerotic taxi industry.

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Many economists love uber because it brings the economic theory closer to a life where demand and supply forces govern the industry. The uber industry has helped break the monopoly of taxis, which taught people to accept the surging prices of the economy (Das, Bhatt, and Path 69-78). Ubernomics is one primary tool that can be used to keep low profiles for uber and ensure that the research mission is achieved. Prestige creates a type of power that complements uber's politics that are, most of the time, hard-charging making a need for ubernomics to prove to people that they should love uber just like economists do.

Uber is an industry that has had rich literature in economics, making many of them have access to data that is delivered in real-time. Uber has unprecedented data on the behavior of rider and drivers, where it uses surge pricing where the prices change as demand changes (Das, Bhatt, and Path 69-78). This concept of price changes as demand and supply change is what makes the economists take uber to be a good idea that favors the economy. Uber is changing the way that people travel in various countries, which is measured using Vehicle Miles that portrays efficiency in deadheading and vehicle occupancy.

Uber has helped promote Peer to Peer exchange where the exchange between uber and the riders who use them for transport are strangers; hence, it creates an open-access of communities. Unlike the taxi industry that would otherwise have doubts in the risks that may occur when transacting with strangers, uber creates a P2P platform that enables riders to rate and leave reputations for the driver (Meyer 1). This technology creates a willingness of people transacting with no fear of dealing with strangers. Uber works in a way that economists do not observe the price that the rider is willing to pay for the services offered, so consumer market surpluses are not taken into consideration. Economists take Uber to be a massive repository that displays moment data, which helps answer different questions about the economy.

Uber's online platform is user-friendly, and the rates it charges change to equalize supply and demand. Uber charges according to the time a client spends in the car, whether the vehicle is idling or moving. This means that on a clear road, the vehicle moves at high speeds, which means that the prices will be lower compared to taxis, which charge depending on the distance (Hahn and Metcalfe 1-19). Uber has helped reduce the need for the many expensive licenses imposed by taxi drivers by the government. Uber does not require any licenses making any qualified driver have free entry to the business compared to the taxi business. Uber drivers also earn higher rates than taxi drivers on an hourly basis making this a more economical option for many potential drivers to choose due to its efficiency.

Uber has attractive prices and creates a platform for increased additional choices of transportation for different consumers. The increased opportunities for shipping by this company have reduced the need for car ownership, and this helps to reduce the spending people do when they have their cars (Carranza et al. 1-19). Economists argue that uber reduces the urge of many people buying cars due to easily accessible and available transport. The fewer cars there are in the country, the less the spending on car maintenance which works well for them compared to owning a car and spending a lot of money on different costs it incurs on them.

Uber also helps to save on parking space in towns as they are on the move all the time compared to owning a car where an individual has to pay parking fees every day when they travel with the cars they own. Economists prefer uber because it helps to save on such costs. Insurance costs are another reason why economists prefer uber to owning cars (Carranza et al. 1-19). The cost of insuring a car is relatively expensive, which is a difficult task for economists. They, therefore, choose to use alternatives such as uber as long as they do not incur the costs of having to pay a lot for the insurance systems, which they take to be exaggerated.

Conclusion

Uber is a sharing economy that promotes trusted techniques as well as different practices for secure transactions between two strangers using digital platforms. Many economists prefer the sharing economy because it aids them in leveraging more personal resources while using the excess capacity of the services it offers. Uber drivers are independent, and the platform requires that they must engage in the algorithmic fixing of prices that ensures that each trip has its price while reducing the amount of competition offered.

Works Cited

Carranza, Valerie, et al. "Life cycle analysis: Uber vs. car ownership." Environment 159 (2016): 1-19.

DAS, SARIT PRAVA, Dhaval Bhatt, and Sailaja Path. "Transformation Of Urban Transportation-Strategic Perspective A Case Of Uber Technologies, Inc." International, Journal of Research in Business Management 5.3 (2017): 69-78.

Hahn, Robert, and Robert Metcalfe. "The Ridesharing revolution: economic survey and synthesis." More Equal by Design: Economic Design Responses to Inequality 4 (2017).

Meyer, Jared. Uber-Positive: Why Americans Love the Sharing Economy. Encounter Books, 2016.