Free «Uber Case Study» UK Essay Paper
Table of Contents
Uber has grown dramatically since its inception and become the multinational company, which is offering its services in many countries worldwide. However, this random expansion coupled with the nature of the business has created a plethora of problems for the company. Uber connects passengers with taxis using the special application, which customers click to request for a cab. Drivers use their own vehicles to offer the service and give Uber a cut of about 20% on the price paid. The company is facing a number of issues locally and abroad while continuing the expansion of its operations.
The company is dealing with tough laws in most of the cities it is offering the services. The first challenge arises from the nature of the business since it is not very clear to most city authorities whether the company should be classified as a technology or a taxi business. In this regard, Uber positions itself as a technology company that merely connects customers with cab drivers. This ambiguity has led to some city authorities terming Uber services as illegal. Such authorities’ decision can also be explained by the fact that there are no laws dictating how the business such as Uber should be taxed and regulated (Dostmohammad & Long, 2015). Consequently, the company had to terminate its services in some cities.
Currently, Uber relies on a smartphone application to offer its services. This program is only useful if there is the proper internet connection. However, it cannot be used in areas where internet connection is either weak or unavailable. In addition, the application does not work when internet service is down due to some technical problems (Edelman & Geradin, 2015). Such a challenge is common for Uber in most developing countries as internet providers are not be very reliable there.
Drivers do not receive payments in cash since clients are expected to pay through MasterCard service. This poses a challenge to drivers and clients especially in developing countries as they might not have access to MasterCard or might not have credit cards at all. To exemplify, such a problem is common in African countries where Uber is making inroads. The mentioned policy of the company limits the number of cab drivers who can join the service as well as decreases the number of clients significantly. Consequently, most drivers would likely to prefer the traditional cab service where they receive payments in cash. Moreover, the clients of such service would avoid the stress of having to acquire debit cards that they might not necessarily need. In essence, the mode of payment used by Uber is a challenge that might hamper its expansion plans in developing countries.
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Uber relies heavily on modern technology to reach its potential clients. For instance, the company can offer its services only to people who have access to the special application. Such limitation affects the service’s expansion in the countries where the number of smartphone owners is rather low. Nevertheless, some of these countries represent a very good potential market since the traditional cab service are very unreliable there. Furthermore, even in the developed countries, the company can offer its services to people who have Uber application only. Such policy, in turn, rules out people who are not technology savvy especially the older citizens who yet would benefit from the service immensely (Mueller, 2015). Additionally, Uber services might be unreliable to people who have lost their smartphones: such users cannot access the service even if they extremely need it. Overall, the above-mentioned factors affect the income of the company adversely.
Uber is facing numerous challenges while developing its services worldwide. Having considered the fact that the company heavily relies on modern technologies, one can deduce that main Uber challenge is the absence of these technologies in some developing countries. Thus, the company will take over developing markets only when internet access and smartphones become accessible to most people in the country. Lastly, tough laws in some cities is a challenge that will take a time to overcome, as these cities need to come to terms with the new technology and the new legislation.
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