Seneca College

UBER
Team Short Paper #1

History
Founded in 2009 the company was launched in San Francisco, providing cars for hire. Initially, they had marketed themselves as a ride sharing company to make travelling around San Francisco streets easier. It was created by entrepreneurs Travis Kalanick and Garett Camp. In a span of a few years, their Uber smartphone application revolutionized travelling around cities for millions of people around the world (Telegraph). The idea came to light when Kalanick and Camp could not hail a cab on a snowy night in Paris in 2008. They decided to solve the problem by creating an application that would be as simple as pushing a button and getting a car (Vanity Fair).

Service
The mobile application which is compatible on Android, iOS and Windows Phone enables riders to connect with drivers using their phones GPS capabilities. Thus, allowing both parties to know their locations and eliminating the question of when the ride will actually arrive. Payments are made through the mobile application via credit card – all in the background and completely cashless. Uber operates in 45 countries and cities from Abu Dhabi to Zurich.
Furthermore, Uber offers this particular service at different levels:-
UberX - which runs daily with economical cars that can seat up to four passengers and costs relatively lower than a taxi
UberXL - which runs daily as well with economical cars however, it can seat up to 7 passengers. Thus, resulting in a cost that almost matches what a taxi would charge.
UberBlack - which costs more because of the high-end town cars with professional drivers
UberSUV – which charges a premium for larger vehicles
UberLUX – which is the top of the line option. Customers will be able to ride in luxury cars such as Porsche and BMW 7 series sedans.
UberEATS – a different concept launched by Uber recently, which allows them to deliver food from the restaurants to the customers.
In addition to the services provided by Uber it is the simplicity of the application interface that attracts a high number of customers. The ability to see the car on the map which gives you an accurate estimated time of arrival and estimated fare provides tremendous convenience for customers which sets them apart from regular taxis. Uber has managed to capture the share of the market through their great application, excellent social media marketing and fleet of drivers. (Pullen)
Challenges
Uber has faced criticism along six aspects: * Competing with taxi drivers unfairly – entering the market without following regulations and fares * The attempt of capturing the whole market – aspiring to become a monopoly * The cars being underinsured and some drivers being unsafe * The possibility of customers privacy being invaded * Gives room for discrimination between drivers and passengers * Undermining working standards of taxi drivers and compensating its own drivers poorly ( Rogers)

Safety
Uber shares a casual and moral responsibility for how their drivers interact with the customers since it links the two.
Privacy
Ubers data collection of, name, address, credit cards and locations of visit does spark a concern. Data on venture capitalists, journalists, elected officials, and others could be used for all improper purposes which could include corporate espionage and manipulation of regulators (Rogers).
Discrimination
this challenge aspect seems to exist in the Ubers rider-feedback model which enables a customer to rate the quality of driving carried out by the driver. If a driver is unable to maintain a minimum score they would be removed off Ubers roster. This allows for passengers to misuse the feedback model to their own advantage as they may give low ratings to racial-minority drivers whether out of implicit or explicit bias. On the other hand, drivers may be less likely to pick up passengers if they learn that they are racial minorities and may generally prefer to pick up passengers who are wealthier or from whiter neighborhood. (Rogers)
Labor Standards the effect on labor standards so far is unclear. If Ubers market share and network continue to grow, and its app enables drivers to have passengers rather than empty cars most of the time, it may allow Uber to pay their drivers well while keeping their costs down. In contrast, it may cut driver pay or even cut drivers entirely, especially if price competition from other ride-sharing companies increase.(Rogers)
Uniqueness
Various differences set Uber unique from the Taxi and Limousine service industry. The app simplifies the way of requesting an Uber ride and eliminates short waiting times. Unlike, regular Taxi services, the app gives users beneficial data such as length of trip, miles travelled, average speed, estimated time of arrival, estimated fare, car model, plate number, drivers name, drivers average ratings.
Below is a chart to show the differences between Uber vs. Local Taxis in reliability, wages, accessibility, and legal differences (Egan: Started determined nun et al. 2014).

| Uber | Local Taxi | Reliability | Offers a great advantage for those who value time. Statistics show in April, 2014:
- 94.62% cars arrived within 15 minutes
-99.98% cars arrived within 30 minutes | Statistics show:
- 27% cabs arrive within 15 minutes-62% cabs arrive within 30 minutes | Wages | The cheapest tier service – Uber X can achieve up to a median income of $90,000 annually if worked 40 hours per week. | Income varies by the number of hour’s drivers’ work and deductions paid to maintain the cab. Drivers renting or leasing a plate can earn between $25,000-$30,000 annually after working 6 days a week. | Accessibility | Efficiency in the application – allows the app to directly assign the closest car to the passenger. In addition, the application enables a direct channel of communication between the passenger and the driver. | Customers in need of the service have to go through a taxi dispatch or hail an available cab on the street | Legalities | Facing one instability regarding the restrictions on the number of cars operating. | Facing a more strict policy |

SWOT Analysis (Makos) Strengths | * Well recognized brand * High standard of service – verified drivers and cars * Unlimited fleet of vehicles * No full time drivers – Uber does not hire drivers * Low operational cost * Low competition – major competitor is Lyft * Cashless payment via the application * Dual rating system which creates trust and safety * Convenient system use for drivers – gives them the ability to reject unwanted clients * Price – lower than traditional taxi operators * High Valuation of Uber – More investment prospects | Weaknesses | * Idea can be easily copied * Relationship between Uber and drivers is ethically questionable as it lacks real connection * Incentive to remain with Uber as a customer is low * Operating costs of vehicle is relatively high (gas, insurance, car maintenance) – drivers may not be able to achieve high profit margins * Unpredictable business model * Privacy concerns | Opportunities | * Dissatisfaction of customers with traditional cabs due to high prices and long wait times * Exploit new and big markets where taxi services are inconvenient and expensive * Rise in number of Uber drivers can reduce the Estimated time of arrival * Increase in valuation might appeal to more investors * Cheaper electric cars could be used in order to reduce cost and increase drivers profit margin | Threats | * Drivers aren’t happy with low-profit margins which could lead to bad publicity. Thus, resulting in discouragement for new drivers from joining Uber * New legal regulations could ban Uber from operating in some countries * Increase in competition could lead to decreased prices – Ubers revenue will decline * Frauds and Scandals could increase * Self-driving cars eg: Google Cars, could eliminate the need for Uber |

Works Cited
Alpe, Lauren. "The History of Uber." The Telegraph. Telegraph Media Group, 03 Nov. 2015. Web. 24 Feb. 2016. .

Egan: Started determined nun, S. about: Syria, G., Stella: Vigil for Michael Brown about respect, n., strongest; magnet, L., Letter: Welcome back to Ottawa, &., & Mills, (2014). Tale of the taxi tape: Uber vs. traditional cabs. Ottawa Citizen. Web. 26 Feb. 2016, from http://ottawacitizen.com/news/local-news/tale-of-the-taxi-tape-uber-vs-traditional-cabs

Forbes. Forbes Magazine, 05 Dec. 2014. Web. 24 Feb. 2016. .

Mills, Carry. "Tale of the Taxi Tape: Uber vs. Traditional Cabs." Ottawa Citizen. 14 Oct. 2014. Web. 26 Feb. 2016. .

"SWOT Analysis for UBER." PESTLE Analysis. 2015. Web. 24 Feb. 2016. .

Pullen, John. "Everything You Need to Know About Uber." Time. Time, 04 Nov. 2014. Web. 24 Feb. 2016. .

Rogers, Brishen. "The Social Costs of Uber." SSRN Electronic Journal SSRN Journal. Web. 24 Feb. 2016. .

Swisher, Kara. "Uber C.E.O. Travis Kalanick's Warpath." Vanity Fair. Web. 26 Feb. 2016. .