Another major strength of Uber, is that it has lower prices compared to other ride sharing corporations. Let’s highlight Uber who is part of the sharing and gig economy. Uber Technologies Inc. as the camouflage of disruptive innovation is so significant that in case its belligerent cost- cutting strategy and convenience offering … Are the business aspects of the worker’s job controlled by the payer? Uber and Lyft drivers did not become employees when AB5 took effect January 1st; AB5 is California’s new gig-work law. They also have different types of Ubers so it can accommodate for either one person, a small group, or a large group. One main issue remained. You bring up a great point that I honestly did not even consider. But since you have to call or wave a Taxi down, it’s just not as simple for the consumer to push a button on their personal phone and have a driver pull up within ten minutes. Taxi should just work with or for Uber if they feel they are losing business. The European Court of Justice ruled that Uber should be viewed as a transportation service and not just a middleman for the passenger and driver. This has caused many taxi drivers to go out of business and face bankruptcies, foreclosures and evictions. https://www.irs.gov/businesses/small-businesses-self-employed/independent-contractor-self-employed-or-employee. You simply pick your pick up spot, find a driver, and make the payment all through a smartphone. Citing, Uber had 17 months to comply with the conditions of their temporary license and have continually put Londoners at risk by letting drivers on the road who are not licensed or insured, Critics of the decision claim that this decision will put a financial burden on Uber drivers who rely on that income. On the other hand, this also has bough concerns as to how safe it is for just anyone to be a driver. What are it’s strengths and weaknesses? 2) Do you agree with The California State Law which now requires companies like Uber and Lyft to treat their workforce like employees as opposed to independent contractors? A few weaknesses are that the relationship between Uber and the drivers is ethically questionable. Do you think more cities should ban Uber from entering the transportation market or let Uber run in their cities? With the workforce, employers are now seeking people who balance work and play, and who work at what they are passionate about, are often more focused and productive. My point is, just because a new product or a new service enters an established market, there is nothing unfair about it. You were very thorough with your answers and I was very intrigued to everything you had to say for each question. Amazing job with your discussion post for this weeks group. That’s just how business goes. Uber uses technology to displace low-skilled workers who may have little access to other jobs, and as a result makes labor (and ultimately the cost of a ride) cheaper. Competition is vital because it leads to innovation and people are always looking for products or services with more features and capabilities that costs less but can do more such as Uber. Had they adapted to changing times and technology, perhaps they could have survived. As for whether or not its fair that taxis are losing business… part of me says that the market decides. Also, if people want to do this as a full-time job, Uber may be able to offer them benefits and more things than they would have gotten as an independent contractor. To begin I do not think that it is fair. Uber being a relatively new company gives it a lot of risk to invest in them. All in all, competition is important and taxi business can compete with Uber. For a city of, what, 15 million people, that’s an awful big difference. That is exactly what happened with the taxi industry, people would rather not have to deal with cash and have the ability to get a ride right at their fingertips. Some people have had scary experiences with drivers trying to kidnap them and not take them where they are supposed to go. Yes, I do agree with The California State Law. In my opinion, more cities should not ban Uber from entering the transportation market. Personally removing these services like Uber and Lyft is absurd and should not even be a factor when it comes to city transportation. As stated in my response, I agree with not shutting down and banning Uber due to competitive reasons, but do you think other reasons such as the London example hold grounds? but, to have something like the california state law in effect for whatever cities permit uber to be allowed in. The estimated base case valuation for Uber is $5.895 billion. It most definitely goes both ways in regards to the drivers being considered independent contractors. The first is based on the concept of book-lending libraries, where goods and services are provided for free or low costs. To make this even deeper three factors also defined by the IRS to state if they are an employee include “Does the company control or have the right to control what the worker does and how the worker does his or her job? 3. I feel like its biggest strength is its flexibility and its reliability; however, its reliability is also its greatest weakness, considering uber’s rumors of… not well background checked drivers, and the sexual harassment cases. That being said I do believe Uber should be allowed to drive in cities and should not be banned just because they are competition to another company. But this is not the only operation of the company. I enjoyed reading your post. It is also worth mentioning that unlike traditional taxis, Uber is cashless as the app is connected to a credit or debit card. Even though it is a great law to be put into place to ensure their employees are treated ‘fairly’ and have the security like many other workers do, this can backfire to the customers. EVP Technology and Innovation | Uber Elevate | Uber - YouTube Like most things in life, jobs change with the times. Yes I do agree with California’s law because in the end, independent contractors are solely responsible for themselves and the work they do. Again, mixed feelings on this one. And, disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products and alliances. It creates competition and even though taxi companies are suffering from it, competition sparks motivation and new innovations to improve the transportation industry. Uber appealed and was granted a 15-month license and agreed to more government supervision, and multiple policy changes. I believe competition is vital and nowadays everyone (companies/businesses) are competing with one another. Using the GPS technology from your mobile device, Uber is able to locate where you are, locate an available driver near you, and send directions to your desired destination. The taxi and limo market is dominated by local players and is regulated in most cities. Additionally, as noted in the reading, because they are not specifically a transportation company (like, say, Yellow Cab), they are not subjected to the same regulations as those businesses are. Another emerging strength of Uber, lies within its global and continuously expanding international reach that expands to more than 50 countries and with a user market of over 80 million people. We offer a comprehensive line of stainless steel equipment. On the other hand, I think this would help with the amount of scary experiences people have with Uber and they can work on fixing their reputation. Taxis may do well during this pandemic, we’ll have to see. I disagree with the California law to require companies like Uber and Lyft to treat their drivers as employees. This new law grants contractors the edibility to have basic protections like minimum-wage requirements, health benefits, and social security. At Uber, we believe the future of mobility is increasingly shared, sustainable, and automated. You do not need money on you, since it is already connected to your card it automatically takes the money out of there when you order a ride and it is completed. These “taxi drivers” use there own cars when providing the service and Uber gets 20% of the fare. Taxi drivers use their own cars when providing taxi service and Uber gets 20% of the fare. Uber is great for locations that do not have taxis located at every coroner and allows for an easy request for a ride as you pay before the ride even gets to you. As an independent contractor myself, I personally feel that this is a major win because not having those crucial benefits. I also happen to agree with everything you said in your answers to the questions. What are it’s strengths and weaknesses? In my opinion, obviously it’s not “fair” that this market is losing business. Uber Technologies, la controversa piattaforma californiana di trasporti privati, ha accettato un'offerta da parte del gruppo delle telecomunicazioni giapponese Softbank per la rilevazione di una quota multimiliardaria della società. Allowing the drivers to be independent contractors allows them to have more flexibility with when they want to work and it allows them to make as much money as they desire in the amount of time that they desire. Innovation is key to all kinds of success, yet business innovation seems to be difficult to discuss. It is exactly what competitive innovation is all about and that is no different in this situation. I don’t think more cities should ban Uber just because Taxi companies are suffering. And this can ultimately cause their business to shut down in the long run. The IRS defines an independent contractor by stating “an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done”. Reason why this is such a strength for Uber is because the consumer always has access to the service as opposed to restricted to cash only. Is Uber disruptive innovation? According to Christensen’s theory, a “disruptive” business has to either originate in a low-end market and move upstream to higher value markets, or it has to create a “new market foothold,” meaning it creates a new market where none existed.“A disruptive innovation, by definition, starts from one of those two footholds,” Christensen says. Uber’s business model was to create an app that connects you to drivers if you need a ride somewhere. I believe Uber should be allowed in other cities as long as they are following the cities guidelines. The phone’s GPS knows exactly where you are. (these include things like how the worker is paid, whether expenses are reimbursed, who provides tools/supplies, etc) and Type of Relationship: Are there written contracts or employee type benefits (i.e. Regular Taxi service regulations are not applicable for Uber. Uber also has its weaknesses. Is it fair that taxi drivers and companies are losing business? All the steps can be done in just one smartphone. Uber claims that there is a misperception between how much Uber, and other companies in the gig economy, affect the American workforce market. Uber’s business model is not like the taxi business. Taxi companies are outdated and inconvenient. Also, company and its customers have no bonding. This allows for a lot of malicious perpetrators to remain incognito. While the CEO of Uber is optimistic that Uber will be able to make profits in 2020, skeptics are not as certain citing stricter US and International regulations, and Uber’s own spending. Research and Innovation. Uber is definitely a disruptive technology and therefore disruptive innovation but limiting it with that label would not do it justice. All of these steps ensure strengths which include convenience, safety, increasing costs due to regulatory and legal processes, and connecting with local companies to gain traction in new markets. They do not have to worry about funding employee healthcare, or contributing to retirement savings, or even (as noted above) taking into account reimbursements for fuel, vehicle upkeep, etc. One of Uber’s biggest strengths is its colossal and highly reputable brand name. An alert is then sent to the nearest driver’s phone and send them the address to be picked up. Kelly, In a capitalist market that is absolutely absurd. This is just the way capitalism works, companies fight for their share in the marketplace, which benefits the consumer. Thanks for your reply. It also gives the drivers the option to know such the trip is going to be. This Is law is in direct contact with California’s new gig economy law known as Assembly Bill 5. I liked your post. Do you agree with The California State Law which now requires companies like Uber and Lyft to treat their workforce like employees as opposed to independent contractors? There have been instances where hackers have entered the app posing as a driver in order to abduct the passenger. Print. The driver winds up with around 80% of the fair while 20% goes to the company. The Gig Economy is growing worldwide and is predicted to soon represent 50 percent of the workforce in the United States. That to me, is the best way for many people to make quick and easy money when they want to make it, or need to make it. Business is business in a sense that there is always something new or innovative being developed and it’s unfortunate that the taxi industry is losing business, but simultaneously its not any one person or company’s fault. The Uber business model is that everyday people can utilize their own cars as taxis without having to work for a taxi company. Uber has made a rating system that assist customers to rate their riding experience as well as the motorist. – I complete disagree with the state of California requiring companies like Uber and Lyft to treat their workforce like employees as opposed to independent contractors. People like the availability of Uber (and the prices, usually), so perhaps the taxi companies should continue to evolve their own platforms to have more availability and price transparency. Huber Technology Inc. 1009 Airlie Parkway Denver, NC 28037 USA +704-949-1010 +704-949-1020 huber hhusa net. All of this is a low-cost market where the driver gets a good cut (80%) and can still grow. 2. What are its strengths and weaknesses? Do you agree with The California State Law which now requires companies like Uber and Lyft to treat their workforce like employees as opposed to independent contractors? Also, do you think there is/will be a consequence that will arise from The California State Law? I think the company should allow their drivers to choose if they want to be employees or independent contractors. From there the driver transports the rider to the destination and by then the payment is made and the driver and rider go their own way. Adelina, I would say Uber’s weaknesses are that they have a very unpredictable business model, there are many privacy concerns, and lastly we hear many scary experiences that people have with Uber and similar companies. pension plan, insurance, vacation pay, etc.)? At the end, they need to be paid for their hard work they did the whole day. Today, no company better exemplifies the power of platforms in an era where digital and … Subscribe. Uber’s business model seems to basically be to act as a liaison between someone who wants to pay for a ride somewhere, and someone who wants to get paid to drive them to that destination, while taking a kind of commission off the top, from the fares collected from the rider to the driver. It’s the Taxi company’s fault for not updating their services. Uber reported its 2019 fourth quarters earnings with a loss of 1.1 billion. It allows people to make quick and easy money that they want to make when they want to. Uber was built off the idea that drivers are their own boss. On the flip side, traditional taxi services are a hassle because you have to first find the taxi company phone number and then you need to talk to the operator and tell them your address for them to pick you up. Some cons are that workers would then be obligated to be considered employees rather than independent contractors which would affect their freedom in terms of what hours they work. Do you think more cities should ban Uber from entering the transportation market or let Uber run in their cities? I don’t agree with The California State law requiring companies like Uber to treat their workforce like employees. Uber is more preferable transportation than the Taxi industry in many ways. Visit us. 2. The imputed value for Uber was $17 billion. One major strength of Uber is its debit/credit card only payment method. Newsletter. The passenger’s credit card is used as the sole payment method. The online platform will be most used and very essential to the Gig Economy. Hi Tony, Also, I think it is fair that taxi and other companies are losing business because their prices are way to expensive and unreasonable. So, in some ways, having wage protections, health insurance, employment protections… these are all good things for all workers (which is why businesses must provide them to employees). In Philadelphia, medallions were worth $65,000-$80,000 in 2005, but decreased to $50,000 in 2018. Following the definition, by the IRS the California state law is in check and is in scope for enforcing. Sorry, preview is currently unavailable. Also, drivers may get to set their own hours in the app based on what the companies say and can only take customers that they are assigned. Uber and Postmates have since sued the state of California claiming that the law is unconstitutional and irrational. -The business model is providing a customer in needs of transportation to a certain location. The primary market that Uber is targeting is the taxi and limo services. It is great for Uber, especially in their business model. Also, it is okay for people to create new products or services that differentiate themselves, that is exactly what happens in a competitive market. People also used it as their main source of income, but again, they got to be flexible with how many hours they were working and which days they wanted to work. The only other option for taxi is to work with Uber to save their own company or don’t work with them and continue to lose business. Contatti interni; Uber has raised many concerns and questions like insurance issues, workers, etc. All in all, removing Uber to help keep taxi jobs is not a good idea. When you need a ride, just pull out your smartphone and tap a button to order a car. When horse and carriage was the only form of transportation way back when, nobody claimed it to be unfair when automobiles started entering the market. The primary market that Uber is targeting is the. Do you agree with The California State Law which now requires companies like Uber and Lyft to treat their workforce like employees as opposed to independent contractors? The implementation of the Agreement is overseen by a Joint Steering Committee. Although, I believe that Uber should not be ban from entering the transportation market, I also think it is unfair that taxi driver and companies are losing their businesses. In 2017, Uber’s license was revoked for poor oversight of drivers. ( Log Out / I guess the best way to try and address that would be to try and have a system where gig workers can “opt in” or “opt out” of “employee” status. This is like any other business or industry, when the current system in place is not working then a new business comes in and takes some of their cliental and revenue and if the original business does not change to meet the needs and demands of clients then they usually die out. Lower prices and convenience are arguably the most important aspects of Uber. I feel that Uber should be welcomed into other cities if it causes such a major disruption that renders cab drivers obsolete, then so be it that’s how competitive business works. So, how I guess I just don’t know how you’d enable that freedom to the workers without having the businesses finding ways to take advantage of it. That’s over a 20% reduction in value for something that’s “needed” for the job. This brings me to our strengths, being cashless in today’s world is now a norm for most businesses offering the convenience of not having to worry about having enough cash in your pocket for a ride. According to his HBR article, Uber doesn’t meet either of these criteria. If the Uber driver is listed as and employee then I think Uber should have to take a more in-depth approach to vetting who can become a driver. Print. If not, what range of responsibility should Uber, and other companies like Uber, have on their workforce? Uber Technologies, Inc. develops and operates proprietary technology applications primarily in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. Despite the new law in California Uber and Lyft drivers did not become employees in that state. Uber drivers can set their own schedules and work at their own pace. What is the Uber business model? 3. 1. Is it fair that taxi drivers and companies are losing business? This is because Uber designed an app which can be used simply anytime and anywhere by just a click of a button. Basically, the business model of Uber is designed as a smartphone app which provides on-demand service to users. Apoorva, I love your answer to question number 3, I couldn’t agree more. A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short term commitments. I’m not too sure. Ubers business model is a smartphone app that connects you to a service of drivers. The prices for Uber are lower compared to traditional taxi operators. Uber is evolving the way the world moves. Yes, the sob stories and the loss of taxi services are going extinct is sad and not good for select individuals, but as said in the article where a price was given for Uber, there are subways and other transportation that was already downgrading and shutting the taxi business out of the market. Some strengths consist of the user-friendly Uber app with minimal glitches. ... including laser technology, lighting, or microscopy and imaging. Like most things, I think they’re are good and bad sides to this. Uber drivers are employees of Uber and thus, should be treated as such. And, there is a divide between the workers who want to remain as independent contractors and the others who want to be recognized as employees. It is like saying that Apple and Google are not allowed to use open source because it is better than Microsoft and it is putting Microsoft out of business in the mobile market. The basic operations begin with a requester or rider downloading an app in which a check is made to make sure the rider is safe and eligible for a ride. I don’t like the idea of the taxis having a monopoly on the business – and, in fact, one of the things that was their undoing (and led to lawsuits) was the crazy amounts people had to pay to try and purchase the Taxi Medallions – a requirement to operating a taxi cab. Hear about EVP technology and innovation at the 2019 Uber Elevate Summit! It has also shown that the gig economy will alter the future of work. The other form is when a company provides a mobile app (for a fee) that suppliers and customers use to buy and sell goods and services, Disruptive innovation is an innovation that creates a new market and value network and eventually disrupts an existing market and value network, displacing established market-leading firms, products and alliances, Not all innovations are disruptive, even if they are revolutionary, For example, when automobiles hit the markets, they were not disruptive towards the market of horse-drawn vehicles because automobiles were seen as an expensive luxury item, Disruptive innovations tend to be produced by outsiders and entrepreneurs in startups, The business environment of market leaders does not allow them to pursue disruptive innovations when they first arise, because they are not profitable enough at first and because their development can take scarce resources away from sustaining innovations (which are needed to compete against current competition), A disruptive process can take longer to develop and usually have more risk associated with it but when it hits the market it achieves much faster penetration and a higher degree of impact on the established markets, Beyond business and economics disruptive innovations can also be considered to disrupt complex systems, including economic and business-related aspects, A gig economy is a free market system in which temporary positions are common and organizations hire independent workers for short term commitments, The term gig is a slang word for a job that lasts a specified period of time and is usually used by musicians, Examples of gig employees include freelancers, independent contractors, project based workers and temporary or part time hires, Gig employees have become more popular in the more recent years, has also contributed directly to a decrease in jobs as software replaces some types of work to maximize time efficiency, People tend to change jobs frequently throughout their life so the gig economy can be seen as an evolution through that, With this type of economy saves businesses resources such as benefits, office space and training and have to ability to work with experts for specific projects that might be too expensive to hire as staff, The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy, employment rate between the highest- and lowest-income families is at its widest it has been in 10 years, For those earning $20,000 or less the unemployment rate is 21 percent, close to what it was during the Great Depression in the 1930s, A new revolution is currently taking place, that will form a new type of economy. Is it fair that taxi drivers and companies are losing business? This has opened up job opportunities for drivers who can work at their leisure. So, by simply acting as a liaison, and collecting their commission from the fares received, their revenue is minimally impacted by employee-related costs and liabilities. 2. I actually had a similar response to this question. Uber Technologies Inc (NYSE:UBER) Share Price and News. Tony, Uber has looked at faults within the taxi business and made those changes to give customers a better riding experience. Some prefer Uber and some like to travel using the traditional taxi. Also Incentive with Uber still remain at a low. Thanks Todd! Though Uber is convenient, it has disrupted cab drivers and taxis by taking over. The reason Uber attracted people to start driving for them is because they got to pick their own schedules and do it as a side hustle or for extra cash if they needed it. I believe Uber is very convenient and fast for someone to reach to their destination quickly. Convenience is a major advantage that Uber has. Uber does not hire drivers, there are no responsibilities toward employees. 1) What is the Uber business model? No, I don’t think cities should ban Uber from entering the transportation market and yes, I think it is completely fair towards taxi drivers and companies. Is it fair that taxi drivers and companies are losing business? It takes away the independent contractor and puts the name of the driver involved with the company directly. Uber is good competition for other taxi companies around the country, and it so happens to be what the consumers want and just happens to be better than everyone else. Uber has stated that the decision is “extraordinarily and wrong” and have since closed that loophole, To help with the safety of drivers and passengers, Uber announced a series of new safety procedures including enhanced safety training for drivers and a “discrimination button” which allows drivers and passengers to report any abuse, Despite Uber’s efforts, the London transportation authorities stood by their decision to revoke Uber’s license. The company, which is Uber in this case, also receives a cut of compensation that each driver earns. The strengths to the business model are that it is usually more affordable than ordering a taxi, and allows the customer to order the Uber right from their smartphone without having to use cash like you would for a taxi. Some strengths with the Uber business model are that their ride service has pleased many people. I think you bring up a great point as it pertains to Uber considering its drivers employees. 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