Efficiency of Uber’s Business Model

Question:

Explanation of Uber and the Services they provide.

Uber Technologies Inc. is recognised as a leading transportation technology company headquartered in San Francisco, California, United States. The company has been discerned to be operating across 633 cities globally. The main form of the development activities conducted by the company has been further seen to be identified with operating Uber Car transportation along with mobile app for food delivery. Uber has been discerned to be driving its own cars, although drivers are free to rent a car for driving with Uber. Uber along with similar companies has been able to challenge the existing business of taxi. The business model of the company has been further discerned to rely on app to arrange rides between riders and cars. The technology implemented by Uber is also able to provide history of rides, automatic billing cycles and along with history of routes (Chokkattu and Crook 2014).

The main discussions of the essay have aimed to discuss on the various types of the topics such as the how the company is providing the added efficiency. It has been further able to critically discuss the implementation of the Uber model in the trucking industry. Some of the other depictions of the study has been able to identify other industries in which the Uber model might be useful

The ride sharing service such as Uber has been depicted to be vastly dependent on efficient technology matching which was available for the people who wish to drive with them and available at the time when taxi radio dispatch systems were introduced in 1940s. A common measure of efficiency highlights the time drivers spent on searching for somebody who is looking for a ride and pick them up (Rempel 2014).

The examining of the capacity utilization has been measured either by fraction of time drivers have a fare paying passenger in the car and by the total fraction of the miles where the drivers log into system in which passengers are in the car. As per the statements given by several economists it has been discerned that the increased efficiency in terms of the capacity utilization is due to the fact taxi data pertain to the period Uber has been able to make significant inroads in the market which likely to raise the capacity utilization rate for the taxis in compare to the drivers of Uber. Despite of the different caveats, as per the statement given by economist the Uber model may be considered as a more efficient driver passenger matching technology. The company has been further supporting faster matches. Uber’s flexible labour supply model along surge pricing system which is closely matched with the demand. The various types of the differences in the utilization has been discerned with implications for the resources other than the passengers and drivers (Nistal 2016).

Expansion into Trucking Services

Another added benefit of the company has been further discerned with added flexibility of the drivers. Uber drivers are free to work when they want and also able to earn extra incentive in cases the rides are particularly needed during peak demand. The overall efficiency with the ride sharing technology has been directed with the benefits of the riders. The new on demand services for Uber has been able to offer quick response time managed with quick payment interactions which are often seen to be lacking with taxis and other companies are also seen to be left behind with more competition (Berger, Chen and Frey 2017). The UberX drivers has been seen to be having substantially greater amount of utilization rate with the taxi drivers are seen to be similar in nature. Some of the other contributing factors for higher utilization rate and efficiency has been seen with Uber’s more efficient driver-passenger matching technology. It has been further seen with the support for the faster matches, inefficient taxi regulations and labour supply which is seen to be closely matching throughout the day. The medallion system of restricting the total number of riders is meant to make the ride available only to those who wanted to get a ride could not get one. The depiction based on the fixed pricing per kilometre for Uber gas been able to ascertain a fair system for all.  It has been also seen that the rating quotient of the company has contributed significantly both for the riders and the drivers. The riders look forward to maintain a cordial relationship with the driver. It has been further seen that the rating system allows to know about the stat of both the riders and passenger which in turn is able to depict efficiency (Doepke and Tertilt 2016).

Uber has been further seen to introduce the on-demand service of transportation with the dispatch services launched with the new application for trucking dispatch service known as Uber Freight. The main working of the app has been seen to be based on the same principle of Uber, where the matching of the commercial shipper has been implemented with a truck drivers looking for a job. The freight rides can be booked based on several weeks in advance or on the similar date. The independent truck drivers need to negotiate with the fare of the shippers, the price on the Uber Freight has been further seen to be predetermined and guaranteed. As the driver is able to get appropriate shipment for the payment which is paid within a week (Piazzesi and Schneider 2016).

Other Potential Areas for Implementation of Uber’s Business Model

The critical analysis has been further able to depict that distance is one of the strongest factors for determination of the prices and the cargo type and location. Similar to ridesharing services, the company has been able to consider the marketplace dynamics to surge prices overtime to match supply and demand (Noam Scheiber 2017).

However, as per the experts this model may not be a revolutionary service. It is similar to the original service as for the private black car industry. This has been further able to make the service more convenient for the drivers and the riders. This particular service has been further seen to include various types of the competitors such as Convo, which has been seen to be backed by Greylock Partners and has raised $18.5 million (Rempel 2014). In general, the truck drivers are seen to be having a dedicated time for shipping around of the loads. In case the company is able to sign adequate number of shippers and the drivers will be able to fade with the job options directly in their phone (Craig 2015). This is different from the Uber service which is used by people in every day. The truck drivers are seen to be able to swipe through the marketplace of loads to decide which one he or she is looking for booking instead of automatic matching. However, the truck service of Uber has been seen with such a long term negative implication for the drivers. Uber freight was created after the company acquired self-driving truck company Otto, is seen to have the foundation for driverless trucks. The main idea here is to generate revenue and shipping network from the various types of trucks dispatched as per to this business. This has been also seen to give the company data and network to create the driverless truck business for future. It has been further discerned that the progression from General Uber drivers to Uber driverless cars won’t be easy as driverless cars will lead high amount of attrition rate. However, from operational point of view this is seen as an improving criteria (Uber 2017).

The implementation of Uber truck services is mostly from in and in the shipment throughout the Texas. It has been further discerned that the location and date for finding the best load for the site is available in the application. The company is further continuing to add freight updates for everyday in the application so that customers can return soon after suitable transporter is available (Berger, Chen and Frey 2017).

Conclusion

It needs to be understood that no particular technology is inherently destructive. This calls for the need of interpreting other areas where Uber service might be appropriate. The Uber service can be implemented in various areas of business which will help customers hire trusted professionals for different types of services such as carpentry, interior designer, wedding photography, salon at home, training and yoga. The customers will be a able to connect to the service professionals across several regions the single application and hire a professional for the designated service (UBER 2016).

Of the other areas of the services can be included with laundry service which will offer wash and fold services to pick up laundry and return the same in a clean and folded fashion. The company can offer dry cleaning services seven days a week and especially operating midnight so that business professionals can find it easy to avail the service. As Uber has proposed to enter the freight market similarly can aim for shipping services. This will eliminate the need of going to Post Office or nearby third-party courier service such as FedEx, UPS, or DHL. The users can only take a picture of the item which they would like to send along with the address of the distribution. Uber can further along with the package at doorsteps and send it anywhere across the world (Rogers 2015).

The most out of the box concept can implemented by Uber and be seen in healthcare industry. The idea of concierge medicine is discerned as one of the immediately evoking image for people who need to go through overcrowded waiting room to see a doctor. The cost alone has been discerned with getting a personalised care from a doctor to the idea of oncierge medicine out of reach for most people. With the introduction of Uber medical app, the company can eliminate this waiting time among the users. The main feature of the application can allow the individuals to make doctor appointments and also request for prescription just with the touch of a button. This will also allow individuals to gain instant messaging access with the doctor. As an important service which it can offer has been seen in terms of appointing well-trained doctors at the doorstep in less than an hour from placing the request on the application. It has been discerned that several stops parrying their specialities from paediatric medicine to cardiology. Uber needs to further keep in mind that the services it offers are at a very competitive rate so that the number of users are attracted to opt for it rather going with the traditional services (Osborne 2016).

Despite of introducing Uber food delivery company can improve slightly more on the customisation of food genres. It can orient a different app which will provide the options only for those individuals who care a lot about fitness and avoid all the food items which contain cholesterol are trans-fat.

In addition to this, Uber also has the option to offer grocery service at doorstep through an app which will be used by large number of customers who don’t have time to visit the grocery store. The company can charge an excess for the delivery without compromising on delivery time and packaging of the goods bought from the grocery store (Noam Scheiber 2017).

Conclusion

The various depictions made in the study has shown that the main criteria for efficiency of the services for Uber has been considered with capacity utilization. It has been further discerned that the most notable factors for the success of present services is due to reasons such as with the support for the faster matches, inefficient taxi regulations and labour supply which is seen to be closely matching throughout the day. It has been further discerned that introduction of new Uber model in the trucking industry although has a lot of potential from operational point of view, however the introduction of self-driving truck after the initiative taken by Otto may not be favourable by many employees currently working for the Uber freight services. Some of the other areas of implementation of such services has been evident with areas such as wash and fold laundry services, doorstep grocery, plumbing, salon and personal fitness trainer.

References

Berger, T., Chen, C. and Frey, C. B. (2017) ‘Drivers of Disruption? Estimating the Uber Effect’, Working Paper, pp. 1–11.

Chokkattu, J. and Crook, J. (2014) A Brief History of Uber, techcrunch.com. Available at: https://techcrunch.com/gallery/abriefhistoryofuber/.

Craig (2015) Uber and CMU Announce Strategic Partnership and Advanced Technologies Center | Uber Global, https://newsroom.uber.com. Available at: https://newsroom.uber.com/2015/02/uber-and-cmu-announce-strategic-partnership-and-advanced-technologies-center/.

Doepke, M. and Tertilt, M. (2016) ‘Families in Macroeconomics’, in Handbook of Macroeconomics, pp. 1789–1891. doi: 10.1016/bs.hesmac.2016.04.006.

Nistal, P. D. (2016) ‘Comparative Study of Uber and Regular Taxi Service Characteristics’, 23rd Annual Conference Transportation Science Society of the Philippines.

Noam Scheiber (2017) ‘How Uber Uses Psychological Tricks to Push Its Drivers’ Buttons’, New York Times, pp. 1–19. Available at: https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html.

Osborne, H. (2016) ‘Uber loses right to classify UK drivers as self-employed’, The Guardian. Available at: https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status?utm_source=digg.

Piazzesi, M. and Schneider, M. (2016) ‘Housing and Macroeconomics’, in Handbook of Macroeconomics, pp. 1547–1640. doi: 10.1016/bs.hesmac.2016.06.003.

Rempel, J. (2014) ‘A review of Uber, the growing alternative to traditional taxi services’, AFB Accessworld Magazine, pp. 1–6.

Rogers, B. (2015) ‘The Social Costs of Uber’, The University of Chicago Law Review Dialogue, 82(85), pp. 85–102. doi: 10.1787/9789264065307-en.

Uber (2017) Introducing Uber Movement, Uber Newsroom. Available at: https://newsroom.uber.com/introducing-uber-movement/.

UBER (2016) Pittsburgh, your Self-Driving Uber is arriving now, UBER Newsroom. Available at: https://newsroom.uber.com/pittsburgh-self-driving-uber/