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Uber is one of the transportation companies that connects its customers, divers, as well as operators through online services (Cannon 26). For the past few years, the company has grown rapidly due to the increased number of people who use private transportation services. Also the as a result of its increased demand for the service, the company has faced many challenges in the process. The company was initiated in 2010 as Uber by its founders Travis Kalanick, as well as Garrett Camp. In the beginning, the company enabled on-demand services to private cars which were black and were driven by licensed drivers that were professionals. Although there are many transportation network companies, Uber has dominated and become more popular in providing transportation services in the United States (Cannon 26).
Although there is a significant rise in the transportation services, there is nothing strange about the changes, as well as the disruptions that the company has experienced in the recent time. One of the key changes was the adjustment in the working arrangements during the late periods of the 1970s, as well as during the early periods of the 1980s. This adjustment led to taxi management change from the previous employer-employee to independent contractors. The latest changes and adjustment that have been experienced in taxi industry has been brought about by a significant rise in the TNCs since the beginning of the 2010s. The rise in TNCs has been contributed by superior convenience, as well as customer experience. Although the exact extent of impact TNCs is still not known, it is now vivid that some taxi companies that operate in the main cities in the United States have been under enormous pressure in the recent periods (Cannon 26).
Many transportation companies have experienced sharing economy during their service delivery. This is because individuals have been interacting with one another in online services in exchange of goods, as well as services. These connections have been made possible via websites, as well as new phone applications such as Airbnb and Uber. These applications have created and developed market space where peers have interacted with one another. As a result of these apps, as well as sites, individuals have been able to rent out enough rooms that they possess through Airbnb. They have also been able to rent out the empty backseats in their vehicles to be used by travelers via Uber. Collaborative consumption has enabled numerous transportation companies to grow and develop significantly because of the following reasons: there is a reduction in transportation costs, it has also led to increases in efficiency, and the long run has resulted in an increase in profits for the companies (Cusumano 33). As result of connection through websites, as well as phone apps, instant connections between suppliers and consumers has led to a reduction in the transaction costs. Since consumers are expected to agree to the terms and conditions that these companies provide, these companies have not been subjected to full legal actions on their sites, as well as application users. This has led to the creation of regulatory concerns which are associated with market competition, the act of protecting consumers and legality of the firm`s practices.
Uber has utilized innovative, as well as creative online technologies that have enabled its customers to find and ask for their services more conveniently. These innovations have some setbacks such as creating destruction design in economics. This is whereby latest innovations, as well as firms, create competition with the technologies or companies which have established and running at the moment. When these new technologies and businesses succeed, it leads to the disappearance of the established firms and techniques. Thus these companies will enjoy profits while the established ones will continue to fall rapidly until they disappear (Cusumano 33). This disappearance causes enormous harm to the established enterprises and the society as a whole.
Many Uber customers, as well as consumers, have criticized the company for its surge pricing because the act is a violation which is against customer’s protections. The company utilizes algorithm to enable surge prices. This means that there is an increase in price as demand also increase. The increase in price should be an indication that more drivers would be available to provide services to the customers. As a result, this should increase customer`s welfare because the service is more available to the customers. Also due to increase in demand, the driver`s welfare should rise as a result of the collection of more profits. The surge in pricing has been witnessed when natural disasters such as Northeastern storm took place, and the company has received a lot of criticism for this action. This is seen as abusing the safety of customers during perilous circumstances and situations. They have also been criticized as a result of their operators and drivers failing to comply with federal law, state, as well as city law. This is because in numerous cities, for someone to rent rooms, as well as charge an individual for riding services, they need permission from the city`s authority (Cusumano 33).
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