...In the last 4 years, surge pricing has become a common news topic due to the controversy caused by its use by Uber. The argument has been whether surge pricing is a disadvantage or advantage to consumers. When demand rises for a good (from Fig1 below, demand (D1) increases (D2)), the price must rise to bring the system back to equilibrium (P1 to P2) with a higher quantity supplied (Q1 to Q2). The higher cost is to encourage suppliers to meet the demand required by allocating more resources to the areas that are willing to pay the higher price P2. Hence, the higher price charged to consumers result in higher profits for firms. In this essay, I will be focusing on the effects of surge pricing and whether a ban would correct the disadvantages associated with it....
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... However, during the storm, public transportation was limited, and the buses weren't running due to the cost of fuel, trains, and the subways were at a standstill due to the flooding. Uber, a car service company, came into the picture for transportation. This paper will show how the demand and supply of transport services were affected by Hurricane Sandy, during a time of disaster, and how the consumers reacted to the changes in prices. The Law of Supply and Demand Maddalena (2012) states, “It is all a matter of supply and demand and what happens when one or both are disrupted from their normal point. When a market is functioning normally supply and demand intersect at a point (called the equilibrium point) which bases the best price that the market is willing to pay as well as the best quantity that the market will provide. When a market is disrupted due to some external event, supply and demand can change causing a new equilibrium point and a new price and quantity” (Maddalena, 2012). With the events taking place during Hurricane Sandy, the Uber transportation company took advantage of the consumers by surging their prices for services rendered. Surge pricing by definition means, the cost of a single ride can reach as much as seven times the normal rate. Due to the demand by consumers, Uber intentionally raised prices because they were the only company available to provide transportation. The supply of drivers needed were the reason the prices were surged, in order to meet...
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...Understanding Markets Main Pricing Polices The company has three different price structures: It has a fixed airport rates, standard fees per minute or per mile charge, and a dynamic pricing. Fixed Airport Rate: The flat airport rate is not available in every city. For example, for our search from West Palm Beach to Fort Lauderdale International Airport, the flat airport rate was not available. The base fare, cost per minute, and cost per mile vary city-by-city, and Uber service. Uber fare rates are different for UberX, XL, UberPlus, Black Car, and Select. To give you a feel for the range of Uber fare costs, here’s a look at the fare costs in Los Angeles California. LA features almost every Uber service and the prices aren’t much higher or much lower than other American Uber markets. Los Angeles Uber costs | Base Fare | Cost per minute | Cost per mile | Safe Rides Fee | UberX | $0.80 | $0.21 | $1.10 | $1 | UberXL | $3 | $0.35 | $1.85 | $1 | UberPlus | $5 | $0.40 | $2.35 | $1 | UberBlack | $8 | $0.45 | $3.55 | n/a | UberSUV | $15 | $0.55 | $4.25 | n/a | Dynamic Pricing: Dynamic pricing refers to where the company set its pricing based on the available drivers and passengers requests. This scenario usually takes place during bad whether , traffic conditions, peak time , and holidays (supply and demand). Ridesharingdriver.com/how-much-does-uber-cost Forbes.com Washingtonpost.com/news/wonkblog/wp/2015 Are pricing practices consistent with competitors...
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...Especially considering the special events that were mentioned at the beginning of this essay, which cause excess demand to bother local residents by setting off surge pricing on a variety of goods and services. Another example, would be during states of emergency and demand my excess its usual quantity; this was the case for Jessica Seinfeld, author and wife of Jerry Seinfeld, who was charges a 450 dollar uber fee during a small snow storm. Successful examples of variable pricing only work when consumers are treated with fairness and consideration, which should always be understood when setting a price for any good or service. As for my personal position on surge pricing, I find it quite interesting and helpful as well as very bothersome during certain situation. San Francisco is often a popular destination for large events like conventions and music festival, which can be particularly unfair to locals through surge pricing. In addition, raising prices during or after times of crisis like earthquakes or storms is extremely unfair. Overall, I believe that variable pricing is essential in providing ride during high demand or low supply time, because it creates incentives for producer or supplier to be reedy for...
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...------------------------------------------------- Uber Technologies ------------------------------------------------- What is Uber Technologies? Uber Technologies, Inc. was founded in 2009 by Travis Kalanik and Garrett Camp as a way to solve their own transportation problems in the traffic congested city of San Francisco where it is still based and headquartered. Uber Technologies offers an on demand car service application for smartphone users that links drivers with people needing a ride. According to Jim Makos of Pestle Analysis “It brilliantly connects the transportation industry with technology via its ride-sharing app.” With the click of a button on the application you can summons a vehicle of your choice see your rate, pay your fare online, see how far the vehicle is and know when it has arrived. Once they arrive you are provided courteous and outstanding service and a cashless transaction with tip included in the fare. Uber has empowered people to use their personal vehicles to provide for profit rides to earn income. This has been a great opportunity for people to earn extra income and for some it has become their only source of income. Uber is providing jobs in an economy where the unemployment rate is at a high 7 %, in turn this will benefit our economy by promoting an entrepreneurial and financial opportunity for Uber drivers. Uber originally started under the name UberCab but after a cease and desist order from the city of San Francisco ordering them to...
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...the exclusive use of V. Veeraiah, 2016. 9-316-101 NOVEMBER 1, 2015 YOUNGME MOON Uber: Changing the Way the World Moves Uber is evolving the way the world moves. By seamlessly connecting riders to drivers through our apps, we make cities more accessible, opening up more possibilities for riders and more business for drivers. From our founding in 2009 to our launches in hundreds of cities today, Uber’s rapidly expanding global presence continues to bring people and their cities closer. — From the Uber website, November 2015 In late 2015, Uber was among the most high-profile new companies of its generation. Founded just six years ago, the company connected passengers to drivers at an unprecedented scale, using point-topoint software enabled by smartphone technology. Customers raved about Uber’s reliability and convenience. The breathtaking efficiency of its value proposition had fueled astonishing growth: It was now said to be booking 2 million1 rides a day, and although it did not report revenues as a private company, analysts estimated Uber’s net commission from drivers would come in between $1.5 billion and $2 billion2 in 2015. But if there was an adage about disruptive technology companies—”move fast and break things”— few companies embodied this adage better than Uber. Not only did the company endure frequent customer criticisms about its surge pricing policy, Uber was constantly battling government regulators, taxi companies, and critics who charged that...
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...副标题：楷体_GB2312，四号，居中 阅后删除此文本框。 Case Analysis-Uber CONTENT Formal Case Presentation UNIVERSITY Laurentian University COURSE COMM-2036 PROFESSOR Michelle Medina Munro GROUP #1(Yunbo Bai, Yiwei Fu, Yuxiang Shen, Shuo Yang) 2015-03-16 Background Uber was founded by Travis Kalanick and Garrett Camp in 2009 in San Francisco and the app was released in the following June. The app allowed users to summon a car to pick up them where they are, and take them to the destination. In February 2014, Uber cracked the world’s largest transportation market in China. Through the expansion in large cities, under the fierce competition in the China’s taxi market, ride-hailing service provided by Uber achieves great success and obtains consumer’s loyalty while faces lots of problems respectively. Objectives Individual Objectives Uber’s chief executive officer (CEO), Travis Kalanick, aims to make Uber’s market in China surpass the United States. Corporate Objectives Looking at data of Chinese online chauffeur market in 2015, Uber only held 8.4% of the market share. Therefore, Uber still has huge upside potential to earn more market shares. In addition, Uber tries to develop various types of cars, like “People’ Uber”, “Uber Green”, and “Tesla”, which have already exited. Improving consumers’ satisfaction is also one of Uber’s objectives. Uber aims to provide safer, comforter, and quicker...
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...2015 MGMT 5260 – Final Project Project Report Ha Luu Nguyen 213651096 Nidhi Joshi 213678271 Nomita Chennamraju 213862529 Raghvendra Bagla 213678560 Srini Venkatachalam 213678453 MGMT 5260 – Final Project Contents EXECUTIVE SUMMARY ................................................................................................... Error! Bookmark not defined. APPENDIX – 1 – BUSINESS MODEL OF UBER ................................................................................................................ 6 Purpose and scope.................................................................................................................................................... 6 Methodology and sources of information ................................................................................................................ 6 Highlights of findings and implications for value creation. ...................................................................................... 6 APPENDIX – 2 – VALUE CREATION CYCLE OF UBER ...................................................................................................... 7 Purpose and scope.................................................................................................................................................... 7 Methodology and sources of information ................................................................................................................ 7 Highlights...
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...Name: Vijay Srivastav Subject: Econ 202 Class: Summer 2016 Section: SF1 Instructor: Dr. William D. Hermann Date: 06/27/2016 I. 1. The United States and Mexico have sign NAFTA along with Canada in the year 1994, which allowed all the three-nation to demolish trade barriers among them. Mexico is a developing nation, a developing nation faces major challenges in the form of lack of infrastructure, lack of investment and lower living standards. Whereas, The USA, is a developed nation and always thrives over any investment opportunities. This disparity helped both nations to mutually benefit each other. The companies in the USA moved to Mexico in search of cheap labor, land and attractive government policies. On the other hand, Mexico benefited by trading farm product, dairy, and remittances from workforces. However, over the period of time, the factor of production which were in favor of the USA have depleted. The reason for this change is due to the emergence of other competitors such as India and China. Those products, services, and facilities which were generating revenue for Mexico are now challenged by the countries like China and India. The reason for this shift is due to comparatively higher wages, unrest in society, corruption in government, and underdeveloped infrastructure. This is further accelerated by phenomena of globalization which removed many trade barriers between east and west. 2. Consumer surplus is the amount a buyer is willing to pay for...
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...“taxi” (uber in this case) because of the decline in the price charged for that, which is related to the increase in the suppliers of this type of transportation (no barrier to entry anymore). In other words, Uber has created a new market (new consumers and new drivers). Therefore, in my opinion, it is not accurate to say that Uber has only created a competitive advantage related to the taxi industry, since it has created a new market in some sense. Uber’s organizational design created a workplace revolution that changed the roles that taxi drivers used to have. The technological feature (a simple app) allowed the drivers to become their own bosses. As Professor Malone preview in his book “The Future of Work”, Uber is part of these new types of decentralized organizations that will reap the scale and knowledge efficiencies of large organizations while enabling the freedom, flexibility, and human values that drive smaller firms. 2. Uber Competitive Advantages relative to TAXI: a. In user Experience: i. No cash Exchange ii. The user can then rate the driver (and the driver can also rate the user) iii. “Guarantee” Supply since Uber’s platform uses algorithms and “heat maps” to estimate how many potential users may be in an area b. In driver Experience: i. “Guarantee” Demand because of the “heat maps” ii. Flexible working hours iii. Can earn more money by being a Uber’s driver iv. Low barrier-to-entry to start (no need of licenses or medallions) 3. Uber Competitive...
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...Nguyen From: Derek Su Date: November 22, 2015 Subject: Uber Extra Credit Project What is Uber? Uber Technologies Inc. is a network orchestrator, connecting passengers with drivers. Uber manages a network of drivers and passengers through a phone app. It also provides options and varieties in the transportation service. Business Model: Step 1 (Request a cab): The first step in the business model of Uber is about creating a demand. People have a smartphone app, which lets them request a cab instantly or schedule it for some time later. Step 2 (Matching): As soon as the request is made, a notification about your details is sent to the nearest driver. Cab driver has the option to accept or reject the ride. In case he rejects, notification is sent to another driver in that area. Step 3 (Ride): Customer can track the cab when it is arriving and the ETA is also shown to the customer. The meter starts as soon as the customer sits in the cab, which can be tracked through the customer side app as well. Friendly drivers make sure that the ride is comfortable for the passenger. Step 4 (Payment & Rating): Once the ride is over, customer gets an option to rate the driver. Rating system is an important part of Uber’s business model as it lets a person know about the driver before booking a ride and helps him trust the driver. Revenue Streams: * Car rides on per km/mile basis * Surge pricing technology: Whenever the demand increases, per mile prices...
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...CHAPTER 1 INTRODUCTION 1.1 INTRODUCTION Customer loyalty is both an attitudinal and behavioral tendency to favor one brand over all others, whether due to satisfaction with the product or service, its convenience or performance, or simply familiarity and comfort with the brand. Customer loyalty encourages consumers to shop more consistently, spend a greater share of wallet, and feel positive about a shopping experience, helping attract consumers to familiar brands in the face of a competitive environment. Types of Loyalty To understand customer loyalty one must recognize there are different types and degrees of loyalty. There is monogamous loyalty and there is polygamous. There are also behavioral and attitudinal aspects. A look at these concepts will clarify what “customer loyalty” really is, and this is important because having a solid understanding of the concept is critical if one hopes to design a reward program where loyalty enhancement is the primary objective. Monogamous vs. Polygamous Loyalty We live in a world of polygamous, not monogamous loyalty. For example, a person might shop at Safeway, Thrifty Foods and Save-on-Foods and unfailingly shop at all three. The person is then loyal to them, but not to others, and yet 100% loyal to none. In their book Loyalty Myths, Keiningham et al. (2005) suggest that “loyalty can in part be thought of as the probability a customer will purchase a brand on any particular purchase occasion. For example, a customer...
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...in the province of British Columbia, particularly in the city of Vancouver where the company, Uber, has been trying forcefully to tap into the city’s passenger transportation market. “Commercial ride sharing is an arrangement where for profit, taxi-like services are provided by private drivers, using technology like smartphone apps. GPS is used to connect drivers with people seeking transportation, and payment is made online” (TranBC, 2014). Uber is an App based company that networks passengers with drivers that transport them to their destination for a fee. UberX is Uber’s low cost option in which the company’s only requirements for drivers are to be over the age of 21, have a valid driver’s license, personal auto insurance, and a four door automobile which has had a vehicle inspection within the first 30 days of partnership with Uber (Elliott, J., 2014). The drivers also need to have a police background check done, and that’s it. These bare bone prerequisites have lead UberX to be scrutinized by the provincial and municipal governments, as well as the taxi industry. The scrutiny comes from Uber refusing to abide by the rules and regulations set out by the Passenger Transportation Board and the Insurance Corporation of British Columbia (ICBC), as they say the Passenger Transportation Act is archaic, and does not adhere to the ride sharing industry. The taxi industry feels Uber is an illegal taxi service, putting the safety of the passengers and drivers at risk, and creating...
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...individual has different needs and wants due to their lifestyles, and there are endless options/packages from which to choose. However, cost can be the over-riding factor above other factors because the consumer earns low profits if any at all. Switching costs are small if any at all when switching between used cars, but new cars have slightly higher switching costs due to warranty and advertising costs. With so many choices, manufacturers are at the beck and call of consumers. If they do not meet the new standards of today's economical and environmentally conscious consumer, manufacturers will suffer greatly mainly due to the foreign car market like Honda and Toyota. Honda and Toyota can blend superior efficiency and quality with competitive pricing because it costs them less to make their cars. Foreign alternatives have forced American producers to keep up and offer similar products that consumers want at a similar price. Although consumers always have an alternative, their buying power is somewhat limited by the factor of negotiating power on price since discounts are usually built into the price. This limitation on bargaining power stems from the fact that consumers do not buy huge volumes of...
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...MANAGERIAL ECONOMICS Suggested Practice Problems • All multiple choice problems in Chapters 21, 22, and 23 • Individual problems: 21.2, 21.3, 22.5, 23.3, 23.5 • Answers (Click Here) Complete Final Exam. The exam must be completed by Sunday at 11:59 p.m. ET. Exam covers Weeks 5, 6, 7, and 8. Chapter 21 – Getting Employees to Work in the Firm’s Best Interests Chapter 22 – Getting Divisions to Work in the Firm’s Best Interests Chapter 23 – Managing Vertical Relationships Managerial Economics, 3rd Edition Luke M. Froeb; Brian T. McCann; Michael R. Ward; Mikhael Shor http://en.wikipedia.org/wiki/Managerial_economics / http://www.coursehero.com/sitemap/schools/501-FIT/courses/1467122-ECONBUS-5421/ http://www.coursehero.com/sitemap/states/Massachusetts/ Managerial economics is the "application of the economic concepts and economic analysis to the problems of formulating rational managerial decisions".[1]It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units. As such, it bridges economic theory and economics in practice.[2] It draws heavily from quantitative techniques such as regression analysis, correlation and calculus.[3] If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by...
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