Success of Uber Transportation Service

Question: Describe about the Success of Uber for Transportation Service. Answer: Introduction Uber is an app based transportation service , which is started by the Land Transportation Franchising and Regulatory Board (LTFRB). Uber is not registered with any private agency. Over the last year Uber became a very successful ride sharing company. The recent valuation of Uber is considered to be $ 40 billion (SWOT analysis for UBER, 2015). Uber provides the car taxis, which are alternative of the other taxi services. It is based on the mobile app, which works specifically on the smart phones in order to book the passengers. LTFRB keeps the record of all the drivers and the vehicles in their database. Uber has come up with the most revolutionary way according to which the world moves. The success of Uber is dependent on its extraordinary transportation service that it provides to the customers. The riders and drivers are seamlessly connected with each other through the android app. Now people do not have to wait for Taxi, they just have to book an Uber vehicle to reach their destinations. All the cities where Uber operates became more accessible, which has opened up more possibility for the riders and more business for the drivers (SWOT analysis for UBER, 2015). The global presence of Uber is rapidly increasing and continues to bring people closer. The essay will discuss the reasons behind the success of Uber and why people decide to take Uber instead of a taxi. Paper will also discuss the risks and challenges that Uber could face and how Uber can improve its services. Why Uber is Successful? The taxicab service was meant to provide the easy travel solution to the public and working class people , who had very limited options in public transportation. The purpose of taxicabs was for the people, who wanted to ride in style without driving by them. The taxicab service became popular in the 1800s in the city of New York. This trend started to become more popular with the development in the automobile industry. People got the opportunity to loan a vehicle and started creating competition for the buggy industry, and taxicabs became successful in doing so. The completion increased over time and many taxicab services joined the completion. This is the reason, for which Uber was launched in the year 2009 in San Francisco. The company started using the license holder taxi drivers for their comfortable ride sharing service. Uber is a widely known application in Asia and Phillipines. This transportation services is actively used by the people and mainly by the young riders. It is mainly appreciated by young generation due to the convenience it provides, safety reasons and better price with good service (SWOT analysis for UBER, 2015). The main success of the Uber is associated its user friendly android app. The passengers do not have to wait on the road side to grab a taxi, because they can easily book a comfortable Uber vehicle by making few taps on their phone. Since, smart phones are commonly used by the young generation, thus, Uber is more effectively used by young people. The cities are becoming more accessible for the passengers. The drivers are also generating more business due to the quick and effective service. This is the reason that global business of Uber is rapidly expanding, and Uber has expanded its business in country like India. People prefer to book Uber taxis because their good frequency and availability. Uber has imposed a great challenge and competition to the conventional taxi services, as its fair price is too low than conventional services. Uber is becoming the first choice for the riders in many countries. It cannot be said that it is unfair for other conventional taxi services, because passengers have the choice to choose between Uber and other services. It is just the matter of switching over from one service to another. Uber de-monopolized the taxi services in many big cities of the world and reinvented the business. The success of Uber lies in the comfortable and affordable services. People choose the service, which is more affordable and more comfortable at justified price. In the world, where there is competition in every field, Uber is doing its business is not wrong. Uber is competiting with other conventional services to make its place in the competitive world. People often go to malls and grocery stores and look over the price of the products. The products, which are beneficial and low in price, are choose by the customers. This is the reason, why Uber is opted over other rides. Basically, the supplies in the market are added according to the market demands and demands of the consumers (David, 2015). Thus, the same role is being played by Uber. The dynamic business environment is always filled with completion. The world market can be considered as the free market with equal opportunities for everyone (Dubovik, Janssen, 2012). Uber is breaking the conventional form of transportation and adding to a new service in the public transport. Uber became the problem solver for the public, this mainly because the purpose of the service was to provide the rides to the people, who need taxicabs at affordable prices. Uber is successful because it changed the structure of the taxi services and gaining more reputation for the industry. Uber provide clean rides, with quality customer experience and also accepted payment in different forms. The system provided by Uber is more customers oriented, where customers are allowed to track the vehicle when the vehicle is on its way. It makes the process of waiting for the ride easy. The competition that Uber gives to other taxi services is oligopolistic (Ritz, Corchon, Marini, 2016), where the ch oice depends upon the customers. Such competition is very effective, as it allows the customer to make independent choices, after knowing the price of different products or services (Dubovik, Janssen, 2012). People use the service, which find is more comfortable and good for them. Thus, Uber is by the people despite the price and options, which they have, and thus the success of Uber is visible. In the free market everyone has the rights to operate freely and to work against each other (Tomasi, 2012). Another success mantra of Uber is that its easily accessible and user friendly app allows the customers to get the detailed information about the taxi number, name of the driver, phone number and estimated arrival time. Uber also provides the service of the private car with cashless payments. The private car service is offered to the customers with a private chauffer as well (Wirtz, Tang, 2016). Thus, success of Uber depends upon various factors associated with easy app, driver details, clean ride, comfortable cars, affordable price and different payment options. What makes people decide to take uber over local taxi? People find Uber to be more beneficial than other local taxi services because of its easy booking and accessibility. In the current time, every young men or women have smart phones. Such phones can be very beneficial to download the Uber App. The app is very user friendly and consumes very few mega bytes on the phone. The people decide to take Uber than other taxi services, because they do not have to wait for long time to get a ride. The frequency of the Uber cabs is very good, and Uber is available in all most all the corners of the city at any time of the day (Wirtz, Tang, 2016). The Uber cab rides also offer the discount coupons, promos and discount codes, which can be used by the customers, as well as can be shared with friends and family. The discount codes can be used to get discount on at least two rides (Uber vs GrabCar: The Benefits of Ride-Sharing Services in the Metro, 2015). Another reason for which people have enhanced the use of Uber is the Word of mouth. Uber started providing free rides, discounts and special private services. Due to this, people started sharing the information with their friends and family members. The tech community of the Uber, also use the social networking sites like FaceBook and Twitter to spread the word about their services and benefits that people can get. The business of Uber grew significantly, as people started appreciating their services. The friendly and quality experience offered by Uber, impressed people and encouraged them to use their service more and more. Thus, people use Uber more than conventional taxi service or any other cab services. Uber came up as the new came up as the new way of personal transportation. The cities, which are highly crowded and travelling in the public transports, become very difficult; Uber provided comfortable rides. The company provided the opportunity of personalization to form the customer value (Wallsten, 2015). People decide to take Uber over taxi is because Uber is able to handle variety and volume. The availability of the car is made according to the needs of the customers. If the customer is alone, than they can opt for mini cars, and if they are travelling with friends and family, they can opt for sedan cars or SUV. Uber started operating in over 60 countries and displayed its strong presence in Pacific and Asian region. The cars used by the drivers are from year 2000 or newer, which makes the ride more comfortable and safe. The Uber Pool allows the people to share their ride and split the cost. Uber provided every option that could make peoples local travel more comfortable and saf e. What are potential risks or challenges that Uber is or could be facing? Some of the risk and challenges that could be faced by Uber are that the business model of the Uber is very simple. It works on the app which connects the passenger seeking rides with the company. The milage based fees is taken from the passengers, from which Uber takes its percentage and gives the remaining to the drivers. The ride-sharing is described by the Uber, however, it is considered as the misnomer, where noting is being shared. According to in Robert Nozicks memorable phrase, the app service offered by Uber enables capitalist acts between consenting adults (Nozick, 2013). It is also seen that Uber is very aggressive towards creating the competition and also disregards many norms according to its comfort and convenience. The success of the Uber is just based on the regulatory arbitrage. It is also breaking the Taxi regulation of the Monopoly rent, due to which it is being opposed in Malaysia. The price is being kept artificially low to gain success in the market. Another challenge that Uber can face is because of its claim that its drivers are the independent contractors. Some of the drivers are concern about it because they will not receive insurances, workers compensation and company do not have to Pay Social Security taxes (Azevedo Maciejewski, 2015). However the case is different as the drivers are not completely the independent contractors, but company is saving its costs through this claim. But, according the case going the California courts against Uber, if the Uber drivers are declared as the employees of Uber, company would be forced to pay either minimum wages to the drivers or it may have to stop operating in California (Rogers, 2015). This will decrease the business revenue for Uber. Another challenge that Uber can face is related to taxes. This challenge or risk is related to employer-employee relationship. If the government in the operating countries dismisses Uber as Technology Company than entire ride payment will be considered as the revenue and Uber will have to pay city and state taxes (Page, 2015). The international expansion of the Uber comes with their own risks. If the company is opposed by the government in international market, company may face the risk of losing drivers or it would become hard to find drivers (Page, 2015). How can Uber improve its service / business? The efficient and innovative use of the technology is the main benefit for Uber. In the competitive marketplace, the firms which are able to develop strategically flexible organizations can earn great benefits. The Uber can remain to get success in the market, if it is able to reduce the Driver downtime. The speed on the route is well in the Uber service, but the poick up speed is relatively slow. Uber is not able to provide the scheduled pickups yet. If it is able to make the scheduled pick up for the drivers, it would be beneficial. Sometimes the passenger like to book the ride in advance, but Uber does not provide the option of rebooking (Viray, 2015). Pre booking option can be beneficial for the passengers, who are heading for a meeting, or to airport. Such passengers will be benefitted if they can get their cab ready outside as soon as they reach instead of coming out of the airport and then book their ride. Another problem is that company does not have a strong relationship with the customers. The Uber app is connected with the phone, but do not provide promotional information on mails. Uber may try to enhance their relationship with their customers to remain valuable in the coming competitions in market. The ethical relationship of Uber with its drivers is still questionable? The loyalty between the company and drivers is still low. Company should focus on improving the relationship with drivers, by providing those perks and benefits. Also, the business model of Uber is very unpredictable, which may raise the questions about the privacy of the customers. Conclusion Paper discussed the public transport company, Uber. Uber is a very popular taxi cab service, which is operating in many countries over the globe. The company stated in the year 2009 and in a very short span of time, company gained huge success. The success of uber is based on various factors, which made it successful and popular among the customers. Uber provides the comfortable and timely rides to the customers. The company works through an android app, which can be easily downloaded to the smart phones. Most of the Uber app users are the young people, who just have to use few taps on the phone to get a cab. Uber increased the accessibility for the customers and also the comfortable local travels. Uber is very popular and successful than other conventional taxi services because it provide shared rides, discounts and different payment options for easily travelling. Paper discussed the factors hidden behind the success of Uber. Uber provides the competition in the free market and has also raised a big threat to the conventional taxi services. But, customers have the choice of opt between Uber and other services. Uber is also gone through some legal troubles in Germany and California, but such leagl troubles can be faced if Uber make some changes in technique and functioning. Uber is also successful due to the large number of drivers and cars, which makes the Uber frequency very effective, and passengers do not have to wait for long time to get a ride. But, Google cars could be a big threat for Uber in future. References Azevedo, F., Maciejewski, M. (2015). Social Economic and Legal Consequences of Uber and Similar Transportation Network Companies (TNC).Briefing, European Parliament. Dubovik, A., Janssen, M. C. (2012). Oligopolistic competition in price and quality.Games and Economic Behavior,75(1), 120-138. Gruel, W., Piller, F. (2016). A new vision for personal transportation. Nozick, R. (2013).Anarchy, state, and utopia. Basic books. Page, V. (2015). 4 Challenges Uber Will Face In The Next Years. Retrieved from: https://www.investopedia.com/articles/investing/072215/4-challenges-uber-will-face-next-years.asp Ritz, R., Corchon, L., Marini, M. (2016). Oligopolistic competition and welfare.Handbook of Game Theory Industrial Organization, Edward Elgar. Rogers, B. (2015). The social costs of Uber.University of Chicago Law Review Dialogue, Forthcoming. SWOT analysis for UBER. (2015). Retrieved from: https://pestleanalysis.com/swot-analysis-for-uber/ Tomasi, J. (2012).Free market fairness. Princeton University Press. Uber vs GrabCar: The Benefits of Ride-Sharing Services in the Metro. (2015, August 28). Retrieved from eCompareMo: https://www.ecomparemo.com/info/uber-vs-grabcar-the-benefits-of-ride-sharing-services-in-the-metro/ Viray, P. L. (2015, December 4). Court suspends Uber, GrabCar operations. (P. Magno, Editor) Retrieved from Philstar: https://www.philstar.com:8080/nation/2015/12/04/1528956/court-suspends-uber-grabcar-operations Wallsten, S. (2015). The competitive effects of the sharing economy: how is Uber changing taxis?.Technology Policy Institute. Wirtz, J., Tang, C. (2016). Uber: Competing as Market Leader in the US versus Being a Distant Second in China. InSERVICES MARKETING: People Technology Strategy(pp. 626-632).