The case of uber (a)
- 1. E-BUSINESS SYSTEM THE QUEST FOR LEGITIMACY IN DIGITAL DISRUPTION: THE CASE OF UBER (A) CASE - 1 SUBMITTED BY:- GUNJAN GUJRAL 501704072
- 2. INTRODUCTION(1/4) • Uber, an app for smartphones users to easily find the taxis and develop a connecting network of passengers and drivers • Uber has disrupted the entire taxi industry very effectively by introducing a smartphone-enabled app. • Uber by 2016 was listed in Fortune 500 and also completed 2 billion rides within 7 years of its launching. • The main funders of it are Google Ventures, Morgan Stanley, Microsoft etc.
- 3. • Issue and Solutions by founders, Travis Kalanick and Garett Camp before Uber was launched and post it’s launching:- INTRODUCTION(2/4) Problems Difficulties of finding a taxi in Paris Observed taxi shortage severe problem in cities Not increasing rate of Medallions issued with the increase of the population growth Increase in dissatisfaction of customers due to lack of cabs on street Solutions With introduction of Uber there was a rise in the price of a medallion from 1.32 billion to 650,000 The customers were satisfied with convenience and promptness offered by Uber Transportation was reliable as running water and accessibility to everyone
- 4. INTRODUCTION(3/4) Download the Uber App Create an Account and enter the credit card no. Select the type of uber service desired, app reveals the drivers nearby Agree to the estimated fares shown Can also contact driver via phone or text Once ride completed, drives push a button of end of ride. The fare is automatically deducted from customer’s account An email is reciept by customer • Process followed by Customer for a ride of Uber
- 5. INTRODUCTION(4/4) • Process followed by Drivers for a ride of Uber Customer’s request is received Drivers contacted via app Drivers can reject or accept request based on location or customer’s rating Once request is accepted, drivers may contact customers via phone or text Drivers can also check the high user demand using heat maps At the end of the trip, driver is required to press the end the ride button
- 6. ISSUES FACED BY UBER(1/6) Issues in Uber’s Business Model “Surge Pricing” and Other Fare-Related Issues Insurance Coverage Safety and Driver Background Check Privacy
- 7. ISSUES FACED BY UBER(2/6) Uber’s Business Model • Laws banning or limiting the no. of Uber drivers • Fingerprinting required in Miami jurisdiction • Not complying local licensing rules • Airport drop-offs were prohibited Solutions • Won battle of banning by reaching out to it’s customers • Customer’s sent mails, twitted personally to the jurisdiction of different states • Uber remover “taxi” from it’s name as it was not a taxi business so adhering to taxi licensing rules was ruled out later
- 8. Surge Pricing Fare determined by the duration and distance of the trip Raising the price more than 1.2 times the normal fare Surge pricing automatically activates whenever demands exceed Uber keeps 20% of total fare as commission and drivers keeps the remaining Solutions The price was later shown not only for distance and duration alone The price included tolls, traffic and surge prior to customer’s request for pickup Useful for customers during the time of surge pricing Drivers time online was further broken- down into 3 significant components ISSUES FACED BY UBER(3/6)
- 9. Insurance Coverage The uber was not giving insurance coverage during the period-1 Period-1 is defined as when driver has the uber app open but not received a booking or accepted a pick Solutions Uber purchased an insurance to provide primary third party liability insurance This insurance was issued that were accepted even during the period-1 ISSUES FACED BY UBER(4/6)
- 10. Safetyanddriver backgroundcheck •1.Drivers commenting lewd •2.DrunkDrivers •3.High Speed chase •4.Non-Proffesional Drivers on road Solutions 1.Rules were introduced 2.Diver had to be at least 21 years old 3.Must possess a personal license 4.Personal auto-insurance 5.Vehicle legally authorized to drive ISSUES FACED BY UBER(5/6)
- 11. Privacy • Customer’s credit card and personal details are captured in uber platform • Users resisted to share their information, credit card or their name • Troubling in customers’ privacy was reported Solutions • Uber hired a data privacy expert and a law firm to seek recommendations • New privacy policies were shorte, simplified and explainable • Users will be able to choose whether to share the data with Uber ISSUES FACED BY UBER(6/6)
- 12. SWOT ANALYSIS Strengths • cashless payment system is used, Uber can track and choose highly rated drivers • The prices are lower compared to traditional taxi operators • It has a high standard of service, verified drivers and cars. Uber Black users enjoy very high standard of service • Operational cost is quite low. Weaknesses • The idea can be easily copied • The relationship between Uber and the drivers is ethically questionable • There are privacy concerns within the application itself with it’s users Threats • Legal regulations in different countries • Problem with local jurisdictions • Increasing competition will ultimately decrease prices • As new markets and drivers are joining, fraud and scandals are also increasing. Opportunities • Can go in new markets in different countries • It can exploit new and big markets in countries like India where taxi services are inconvenient and expensive • Additional services like transporting older patients to hospital, transporting children to school and transporting pets to the vet can be offered
- 13. RECOMMENDATIONS(1/2) • The aggressive “Move fast and Break things” approach to growth should not be followed by Uber • As Uber has already established its as a well-known brand, it’s branding can get effected with one wrong step • While expanding itself in other countries, Uber should learn about all the laws and regulations of the market • The privacy concerns should be disclosed in front of passengers more transparently
- 14. • The surge of prices should be set in a limit of demand • Proper training and background check in all parts of worlds should be done • More expansion in business can be done by introducing new product line or entering in a new market • Allow users put in for a reservation hours or days in advance, and let drivers commit to pick up a reservation. RECOMMENDATIONS(2/2)