Industry Structure of Uber
The transportation industry includes ride-hailing services like Uber. It uses technology and a decentralized workforce of independent contractors to disrupt taxi services. Traditional taxi drivers are either employed by a central company or independent owner-operators. The Uber smartphone app connects drivers and passengers, becoming the backbone of its business model. Ride requests, driver tracking, and payment transfers are accessible using the app. This technology-driven approach sets Uber apart from other cab services and makes it popular.
Competitive Strategies of Uber
Uber uses various competitive methods to preserve its market leadership and grow in the ride-hailing sector. Technology is one of Uber’s main strategies, as it improves its smartphone app to make booking easier for drivers and riders (Dudley et al., 2017). Uber invests in cutting-edge technology to stand out and improve user experience. Uber uses surge pricing, another competitive technique. Dudley et al. (2017) state that Uber constantly modifies fares to attract more drivers during peak demand, balancing supply and demand. This price strategy lets Uber maximize revenue while providing dependable service, especially during peak hours or special events. Uber aggressively enters new markets and regions using its brand and technology. Together with local stakeholders and regulators, Uber hopes to overcome regulatory hurdles and enter diverse global markets.
Pros and Cons of a “Sharing Economy”
Uber’s “sharing economy” model has advantages and drawbacks. The sharing economy optimizes resource use by leveraging idle vehicles and driver time. Used spare capacity can boost economic activity, create jobs, and reduce environmental impact by reducing vehicle traffic. Labor and income inequality are also concerns in the sharing economy. Gig economy workers may not have healthcare, retirement savings, or job security (Dudley et al., 2017). Independent contractors may also work in unsafe environments without legal protections.
Issues/Challenges Faced by Disruptive Innovators like Uber
Disruptive innovations disrupt industry regulatory frameworks, making regulatory scrutiny a significant issue, according to Dudley et al. (2017). Numerous jurisdictions have challenged Uber’s ride-hailing model, highlighting regulatory complexity. Disruptors may threaten industry veterans’ business models. Taxi industry incumbents have protested, sued, and criticized Uber’s market entry. Managing a decentralized workforce of independent contractors, ensuring quality, and addressing driver concerns while maintaining profitability and customer satisfaction is difficult.
Relationship Between Uber’s Registered Partners and Outsourcing
In Uber’s operational structure, registered partners are independent contractors, reflecting outsourcing and the gig economy. Drivers with their vehicles can choose their hours and locations. Uber optimizes resource allocation, lowers operational costs, and expands service coverage using a network of registered partners (Dudley et al., 2017). Uber’s registration of drivers as partners rather than employees raise labor, benefits, and social protection concerns. Registered partners do not receive healthcare, retirement, or other workplace benefits. Drivers face financial risks from vehicle maintenance, fuel costs, and fluctuating demand, which may increase income instability and job insecurity in the gig economy.
Implications of Shifting Towards a ‘Gig Economy’
A gig economy model shift affects businesses and individuals. People have more control over work, schedules, and income in the gig economy (Dudley et al., 2017). This flexibility may appeal to multitaskers and extra-income earners. Gig economy concerns include job security, income stability, healthcare, retirement savings, and unemployment insurance. Without employment protections, gig economy workers may face income and employment uncertainty (Dudley et al., 2017). The gig economy business challenges are managing a decentralized workforce, labor law compliance, and worker exploitation and inequality. While navigating complex legal and ethical issues, gig economy companies must balance worker, customer, and shareholder needs.
Disruptive Innovators’ Preference for “Forgiveness over Permission”
Uber and other disruptive innovators seek forgiveness over permission for strategic and organizational reasons. Complex regulations may hinder agility and flexibility for rapid innovation and expansion. Innovators can push boundaries, breakthrough technology, and business models by asking for forgiveness. This approach risks regulatory backlash and public scrutiny, as Uber’s legal and public controversies show.
References
Dudley, G., Banister, D., & Schwanen, T. (2017). The rise of Uber and regulating the disruptive innovator. The Political Quarterly, 88(3), 492-499. https://ora.ox.ac.uk/objects/uuid:7b1f79d5-a330-4510-a3a0-9d101fd76089/files/mfaa28ac19a3a6b6ac08bcdfd236bb1bb
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