Uber’s business model is not like the taxi business. I don’t think that Uber should be banned and that it is completely fair that the taxi industry is losing business. The strengths to the business model are that it is usually more affordable than ordering a taxi, and allows the customer to order the Uber right from their smartphone without having to use cash like you would for a taxi. An alert is then sent to the nearest driver’s phone and send them the address to be picked up. The prices for Uber are lower compared to traditional taxi operators. Great post! Some of the business strengths for passengers include real-time tracking, accurate ETAs, cashless rides, etc. Uber has revolutionized ride sharing and kickstarted a movement of Gig economy market. That is until Uber, and other tech companies, were faced with legal and regulation issues. On the other hand, I think this would help with the amount of scary experiences people have with Uber and they can work on fixing their reputation. It can help the employees potentially make more money, but they are more at risk with their hours of service and also their independent ratings when they are on call. Please let me know what you think! Taxi drivers use their own cars when providing taxi service and Uber gets 20% of the fare. When horse and carriage was the only form of transportation way back when, nobody claimed it to be unfair when automobiles started entering the market. I believe there may be some consequences such as Uber losing the flexible driving schedule if they become employees and that is why many Uber drivers want to remain independent contractors. Their pricing methodology, is managed by a demand system and route price changes upon the demand of the ride during peak hours and days. You provided a lot of detail, and I was very happy to be able to read and write on it. It is argued that Ubers expenses may have been much larger than its revenues. Drivers have freedom in when and how long they work for. Had they adapted to changing times and technology, perhaps they could have survived. The European Court of Justice ruled that Uber should be viewed as a transportation service and not just a middleman for the passenger and driver. Since people prefer Uber, taxis and transport services are losing money. China is a key partner country. The IRS defines an independent contractor by stating “an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done”. The sector of … Uber’s business model is not like the Taxi business. The driver then drives the passenger to the desired location and is paid via credit card. HUBER Technology provides state-of-the-art equipment for municipal and industrial water, wastewater and sludge treatment. If that means that taxi companies die out, then so be it as they are outdated and outperformed by modern companies like Uber and Lyft. Uber is good competition for other taxi companies around the country, and it so happens to be what the consumers want and just happens to be better than everyone else. A dedicated High Level Innovation Cooperation Dialogue (ICD) was set up in 2012. “its core business, is facing serious challenges in its core markets because the gig economy is under attack by regulators worldwide, which has been downplayed so far”, DISRUPTIVE INNOVATION AND THE GIG ECONOMY: THE UBER STORY, https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee. This gives these new tech companies the opportunity to reduce expense on employees and gives workers supplementary income on a flexible schedule, Tech company critics claim that companies such as Uber, Lyft, and TaskRabbit have shifted their responsibilities of health care, sick time, paid time off, and workers’ compensation on the workers and general public, California created a new Law, known as the Gig-economy bill or AB5, which ruled that companies like Uber and Lyft must treat more of their workforce like employees, Uber, Lyft, Postmates, DoorDash, and Instacart responded by joining together to create a ballot initiative that would exempt them from the law claiming that classifying their workforce as employees would take away the flexibility and freedom the workers currently have, The creation of AB5 was inspired by the language of how The California Supreme Court defined an independent contractor. I agree with your point a lot. In order to maintain ones place in the workforce you have to be adaptable/ And now that companies such as Uber and Lyft exist, taxi drivers are becoming obsolete. Since Uber drivers work on behalf of Uber, they should be treated as employees instead as independent contractors. I also see this as a demand from society as they were not getting what they wanted from the taxi industry so they choose Uber instead. I also agree with you that Uber is obligated to do certain things for their employees and this will be costly on their end. I also happen to agree with everything you said in your answers to the questions. Companies work based off a supply and demand system so if the taxi services are not meeting the demands of the customers then it is on them if they are loosing business. Convenience is a major advantage that Uber possesses over taxi companies and that advantage is totally fair in the name of competition. Some strengths with the Uber business model are that their ride service has pleased many people. Uber has been engaged in many lawsuits and that has hurt them quite a bit. I understand that it would ruin the business model for the drivers to become employees of the company, but do you think there are other ways to keep passengers safe while still holding drivers accountable? I don’t think it would be fair for cities to ban Uber. 1. Uber has placed itself as the leading ride-sharing application and it is one of the first ride-sharing apps, operating across the globe. Another emerging strength of Uber, lies within its global and continuously expanding international reach that expands to more than 50 countries and with a user market of over 80 million people. They also have different types of Ubers so it can accommodate for either one person, a small group, or a large group. Thanks Todd! The London transportation authorities decided to not extend its taxi operating license due to safety issues with Uber. Unlike many taxi services we all see in different cities and towns, Uber is a company that allows the drivers to be somewhat as part time investors/owners. If not, what range of responsibility should Uber, and other companies like Uber, have on their workforce? Tony, It was renewed for the third time in 2014. Ubers business model is a smartphone app that connects you to a service of drivers. These medallions can cost anywhere from $60,000 to $700,000! A large majority of uber drivers do it as a side hustle to earn some supplemental income. One the other hand, the risk is based on economic stability and keeping customers, but this comes with any public company which depends on other investments to stay alive. Things that must be reconsidered for the future of work: disappointingly low minimum wage, lax overtime rules, weak collective-bargaining rights, and excessive unemployment. This is because Uber designed an app which can be used simply anytime and anywhere by just a click of a button. Taxi companies are outdated and inconvenient. Uber’s business model was to create an app that connects you to drivers if you need a ride somewhere. Share. Taxi companies and drivers are losing jobs and going bankrupt in cities or high taxi areas due to the convenience of these transportation services like Uber and Lyft. That’s over a 20% reduction in value for something that’s “needed” for the job. However, the policy changes were not enough. One main issue remained. So that is a great incentive for the drivers because they are getting more money for there time. At the end, they need to be paid for their hard work they did the whole day. Like most things, I think they’re are good and bad sides to this. Our main focus is liquid/solid separation in general and headworks equipment in particular. Sharing the Liberal Utopia. Yes, I agree with the California State law. If not, what range of responsibility should Uber, and other companies like Uber, have on their workforce? Although Uber has some amazing strengths, it is not foreign to having some weaknesses as well. Change ), You are commenting using your Facebook account. A great example of this is in London through 2017 where they were not eligible to drive and obtain a taxi license due to safety issues. There is a discussion as to whether other states will follow the lead of California and create a law similar to AB5, The London transportation authorities decided to not extend its taxi operating license due to safety issues which will directly affect Uber’s presence in that European market. Uber is a company just like every other transportation business and banning it just because they are negatively effecting other businesses like taxi would be unfair. You do not need money on you, since it is already connected to your card it automatically takes the money out of there when you order a ride and it is completed. Uber has stated that the decision is “extraordinarily and wrong” and have since closed that loophole, To help with the safety of drivers and passengers, Uber announced a series of new safety procedures including enhanced safety training for drivers and a “discrimination button” which allows drivers and passengers to report any abuse, Despite Uber’s efforts, the London transportation authorities stood by their decision to revoke Uber’s license. Are the business aspects of the worker’s job controlled by the payer? As for banning these services much like Uber was banned in London in 2017 due to safety procedure and not meeting the requirements for a taxi license is a different story and I feel that since it is much like a taxi service, they companies should be held to the same standard is a taxi license is required in that area. What is the Uber business model? Uber has little debt, or fixed commitment. Banning Uber from cities could be a hit or miss on the aspects of economic gain and the job market. I love your answer to question number 3, I couldn’t agree more. So, in some ways, having wage protections, health insurance, employment protections… these are all good things for all workers (which is why businesses must provide them to employees). While I think this is a very good point, I also believe it is important to note that some of their drivers want to be independent contractors as it is a side hustle and not their full-time job. 1. The schematics of this service seem flawless. If so, why? I believe taxi drivers should introduce new services and innovations that would earn them profit, such as maintaining or improving safety regulation far better than Uber and Lyft, become more flexible with fares, offer ride sharing services, serve the passengers with the same rate irrespective of peak times of high demand, etc. 3. And, disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products and alliances. If the Uber driver is listed as and employee then I think Uber should have to take a more in-depth approach to vetting who can become a driver. Contatti interni; The major weakness I recognize is the exclusively digital platform can compromise the overall security of the service. Its simpler and more trustworthy for the consumers, and for the other businesses, its just good and pure competition. Huber Technology srl. L’espressione “disruptive innovation” appare per la prima volta in letteratura in un articolo di Clayton Christensen e Joseph Bower, “Disruptive technologies: catching the wave”, pubblicato nel 1995 sull’Harvard Business Review. It has also shown that the gig economy will alter the future of work. Uber is the most recent company to join the titans of the technology sector thanks to its much-needed disruption of the taxi sector since 2009, two years after the arrival of the iPhone. Uber is definitely a disruptive technology and therefore disruptive innovation but limiting it with that label would not do it justice. Some other things to keep in mind are pricing and payment, splitting and paying out proceeds from the rides, turning the revenue into profits, and reinvesting the profits to grow the business. Cost-saving through innovation. As we have previously discussed in What is Innovation, the ideal definition for innovation is: The slow-growing profits come from 20% of every ride, but with proper planning and reinvesting (part of their operations) they are able to capitalize. It’s less costly than taxis because it gives you your total before getting into the car rather than a taxi that charges you by the minute that you trip takes. I really enjoyed your post. Freelance writers, for example, have spent the last few years decrying these laws, as they limit their ability to work whenever, wherever, and for whomever they wish. I really enjoyed reading your post as I too agree with your third bullet. Gig Economy, and where success is rewarded with good reviews that encourage more business. Uber drivers can make their own schedules and turn on their driving/availability on when and where they want. Uber is great for locations that do not have taxis located at every coroner and allows for an easy request for a ride as you pay before the ride even gets to you. That is exactly what happened with the taxi industry, people would rather not have to deal with cash and have the ability to get a ride right at their fingertips. I think it is fair for Uber to be allowed in cities because In don’t believe in limiting a company from expanding into cities and trying to make more of a profit. Research and Innovation. Visit us. This is like any other business or industry, when the current system in place is not working then a new business comes in and takes some of their cliental and revenue and if the original business does not change to meet the needs and demands of clients then they usually die out. This would allow for the drivers to maximize their earning and could open up a few different advantages for Uber itself. As a regular consumer of the app, I believe that one of Uber’s key strength has to be the pricing. I like the business model they have with independent contracting, as my job is very similar. I think you had a very good post but I can also see where Cameron is coming from in his response as well. Subscribe. On the other hand, this also has bough concerns as to how safe it is for just anyone to be a driver. One major strength of Uber is its debit/credit card only payment method. A few weaknesses are that the relationship between Uber and the drivers is ethically questionable. Hi Mihali, To make this even deeper three factors also defined by the IRS to state if they are an employee include “Does the company control or have the right to control what the worker does and how the worker does his or her job? Kelly, Ultimately numbers seem to indicate Uber is being overpriced by investors. but, to have something like the california state law in effect for whatever cities permit uber to be allowed in. Overall, its one of the best independent contracting jobs in the market right now, and as long as safety is a priority for Uber, it will continue to succeed. Uber claims to be doubling its size every six months. I disagree with the California law to require companies like Uber and Lyft to treat their drivers as employees. Change ), You are commenting using your Twitter account. Member of the HUBER group. Uber was built off the idea that drivers are their own boss. With that being said, I don’t think cities should ban Uber from entering the transportation market. It is like saying that Apple and Google are not allowed to use open source because it is better than Microsoft and it is putting Microsoft out of business in the mobile market. Uber also isn’t obliged to pay Social Security taxes, unemployment insurance, or worker’s compensation either because of how they identify their employees as independent contractors. Thanks for your reply. Is it fair that taxi drivers and companies are losing business? In the second question you talked about how Uber is trying to receive all of the benefits of having their drivers as independent contractors without any of the responsibilities. Share. -I would say uber should stay in cities; its pretty vital and handy. Sounds pretty dumb right? This led to a former taxi driver to kill himself, due to the economic hardships he was facing after Uber entered the market. This is a great aspect of the business as it allows for there to be rate transparency and ensures the costumer is not getting ripped off. Well done! The flexibility provided by the gig economy has created exponential growth due to the prevalence of the Internet. Another strength is that Uber drivers are usually readily available because of the very flexible hours Uber allows for. Statistics show that there is a growing number of people engaging in flexible and freelance work due to the sharing economy. Uber Technologies is an American app-based transportation platform headquartered in San Francisco, California. It’s important for Uber to do many background checks and provide a code that only the real driver and passenger receive to confirm identifies. The company knows that their customers complain all the time about their pricing and how its to expensive but the company has refused to lower it. So, I do not think Uber should be banned, but I do think the ride-shares should be as regulated as the taxis. Newsletter. This is because, most people forget that what set Uber apart from other car transportation services is that they let their contractors the opportunity to work whenever they felt like it and if the state takes this privilege away then the Uber service in California is likely to decline because they wont have contractors willing to work for the service. 2. Multiple big name investors invested $1.2 billion into Uber. Uber uses technology to displace low-skilled workers who may have little access to other jobs, and as a result makes labor (and ultimately the cost of a ride) cheaper. I would say Uber’s weaknesses are that they have a very unpredictable business model, there are many privacy concerns, and lastly we hear many scary experiences that people have with Uber and similar companies. I think Uber and Lyft should be allowed in cities as well. You can download the paper by clicking the button above. Though Uber is convenient, it has disrupted cab drivers and taxis by taking over. Some of their strengths are it has a high standard of service, verified drivers and cars. The Current and Future State of the Sharing Economy, Designing for Labour: Uber and the On-Demand Mobile Workforce, Labor Platforms and Gig Work: The Failure to Regulate. Uber drivers can set their own schedules and work at their own pace. I believe taxi drivers should also enable features like Uber where a person can make their payment cashless and see the driver’s rating and experience with driving. There are too many stories flying around about how people are being attacked by rogue drivers for the sake of keeping the business model under the “independent contractor” employee model. What are it’s strengths and weaknesses? Uber claims that there is a misperception between how much Uber, and other companies in the gig economy, affect the American workforce market. 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