E commerce Influence of Uber on UK Taxi Industry

Question: Discuss about the E-commerce Influence of Uber on UK Taxi Industry. Answer: Introduction: Innovations transpire in every pitch of life and that with advancement of new technologies has become very important. The same has been the case with the transportation industry where new services of taxi have made peoples journey a smooth ride. One of the models of the development of technology is the taxi service offered by Uber that has gradually become the talk of the town in London. The service that is being provided by Uber can be availed easily. The only factor that people need to consider is the use of an application to avail the service of Uber. As per Bashir, Yousaf and Verma (2016), the uprising of Uber has caused a major impact in the traditional taxi industry of UK that has witnessed difficulty in standardizing the sector. The labour standards of Uber have been under question with its interference for low-wage activity in coming years. Effect of Uber on car hire sector: Ubers application is being availed across 350 cities across the globe, gaining immense popularity among hire-car riders. The company has been fortunate enough in earning huge amount of profits for the innovation of its application. This has been hugely achievable because of the services that are offered by the company through its application. It can be said that Uber has swapped the conventional ways of hiring a taxi with a new upgraded version. The car hire industry is being observing an alteration through the hands of Uber. It has made a major impact in eradicating the various costs of transactions that have for long being afflicting the industry, especially those involved in search costs. According to Harding, Kandlikar and Gulati (2016), many cities have been viewing enough fragmentation due to regular support for upright and straight amalgamation of the sector. Sector Integration: Uber has always been encouraging upright and straight assimilation in the car-hire industry. The taxi industry is stated to be hugely fragmented in equal dimensions. For instance in Manchester, overhanging owners are responsible of chartering their operating rights to few companies of management who in turn, obtain or let cars according to the prerequisite of the domestic regulations. As per Balafoutas et al. (2013), drivers then lease the same either on weekly or daily basis. In various cities, there are existence of diverse licensing systems, though the system of licensing has not always consented the owners operatives or the drivers direct service cheering upright integration. As per Frechette, Lizzeri and Salz (2016), taxi companies have been putting their cars on lease to drivers instead of paying them for shunning away from the related costs inclusive of laws pertaining to minimum wages and taxes of compensation related to unemployment and union. Uber has been striving hard to reduce the upright disintegration for having direct contractual association with the drivers. The gaining of market share is letting the industry integrate straight. The organization has been building up a massive database of the behaviours of riders and drivers. These sorts of data are obligatory to Ubers price setting tactics and market functions that would not have been possible in an articulated industry (Srensen 2016). Such kind of expansion has the ability to make it moderately simple in certifying that Uber scrutinizes the laws and plays it consequently to the rules in continuing goals of public (Stokes et al. 2014). Acquiring immense network comprising of drivers and customers along with their data stack on their behaviour, Uber is hugely seen as a game changer. E-Commerce Models: Big business giants like Amazon.com and Walmart have been successful in consideration of a coordinated model of business through e-commerce, though there are other ways of making money through e-commerce websites (Gassmann, Frankenberger and Sauer 2017). Uber has made the best use of e-commerce in its effort to success. Of the four models that e-commerce boasts of, only B2C or Business-to-Consumer is the one that is applicable with Uber cabs. The present scenario has witnessed internet transforming the ways of undertaking business. The e-commerce websites have been beneficial for both the sellers and the buyers for exchanging of their products, services and other important information making things easier for all along with less time consumption. Uber has been able to create an online platform of its own where it connects those in need of a ride to those having car and time accessible to provide others in exchange of money. In comparison to the other conventional taxis, Uber has been considered comparatively cheaper along with passengers having the opportunity to see and review on the drivers they are dealing with (Sector 2015). Ubers profitability stands at $17 billion, while back in 2014 it was only $300 million without any profits (Ranchords 2015). Uber has been valued at such higher quantity without having any kind of diversity in profits and earnings much less than the other companies with same sort of values. Googles CEO, Eric Schmidt foresees that technology would bring in enormous changes in the total market in the coming years where Uber is seen as the leader for the development. Technology advancement and organizations having same kind of services are emerging with many expectations in market sporadic of fresh concepts based on technology (Eisenbrey and Mishel 2016). In the coming years, technology advancement would become cheaper with diminutive assets becoming part of the sharing economy. Ubers Revenue Generation Model: Uber has never limited its business to a particular section of the people. Uber has come up with Uber X, Uber taxi and Uber Black offering cost-resolution and Uber SUV for people able to pay for luxury. Cab fares vary as per the situation, which is noteworthy from Ubers business model perspective. Demand augmentation would routinely increase the prices of per mile. According to Watanabe et al. (2017), new prices reliability is on the number of available drivers along with number of requests that is being completed by people having enough interest in travelling. The care hire industry has been experiencing huge transformation through the hands of Uber. It has presented people a different way of looking at the cabs that once dominated the roads. Uber has also been offering boats and helicopters as other means of hauling on demand. Uber has been instrumental in commencing with the service of motorcycle pickup in Paris. Ubers Big data Effect on Taxi Industry: Uber has been considered that boisterous force creating perplexity and incomprehension in the marketplace through its entry. As per Damen (2016), Uber has been creating distraction of some kind with experts determining the influence Uber has on the traditional methods of transportation, especially the taxis. Ubers usage of Big Data has blanked on its aim at the turning over policy of the transport industry. The popularity of Uber has not been due to its business being a fresh idea and avant-garde from others. Uber that was not being able to convene is meeting the needs existing in the taxi industry. According to Schildt (2016), its success has much been on its ability to use the Big Data. Using Big Data, Uber has been assisting its customers in getting from their source point to the destination and assembling important information on their choices. This assisted Uber in identifying their customers on an individual perspective. According to Rose and Hensher (2014), Uber knows where th eir customers would stopover and the places they would set out, providing high level of customer service that is reverie for other taxi service providers. It also takes in the alliance it has with the hotel chains and offering special rates of discount. The express success that Uber has gained over the years has made it a susceptible character among critics. Its rival organizations have been complaining for some time now that Ubers business tactics are designed in a way that hampers other transportation modes. Critics have been focusing much on the influence of Uber on the confined and urban infrastructure squabbling on the fact that the organization is making use of the data to congregate the demands of local customers and manoeuvre the political parties to throw out its rivals off the competition pedal (Arcese et al. 2014). Uber has never eschewed the big data effects on the industry of transportation. The taxi industry has been newly affected by this new competition. Statistical explanation states that Manchester people using cabs have demurring in a dramatic manner. Certain reports doing the rounds in March, 2014 stated that an average taxi back then made approximately 1450 trips, which declined fundamentally in 2016 to just a p altry 550 (Geradin 2015). As per industry reports, the drop has been due to the augmentation of services like Uber, having imposed negative facets on taxicabs. Manchesters decline have made people related to the taxi industry persuade people not to panic. Uber has been the power behind the bigger innovations happening in transportation industry. There is a stiff competition within the industry along with more penetration and fresh offerings. In London, UK, certain convoy of taxis compressed new position of tech-savvy by pretentious e-hailo programs propose to compete with Uber. According to Cohen et al. (2016), companies have started reducing their prices, which according to them is the way to go about in doing business. This reinvention has been essential for an emergent marketplace that guides consumers to superior things. There has been immense disruption in the transportation industry in the past few years, which has been considered as the starting point. Things like cloud computing and Big Data are gradually becoming significant factors within the car-hire industry. Ubers impact has been huge in the transportation industry, especially in the upshot on taxi. The transportations private industry has undergone fundamental changes with embarking on the systems of car examining and app-based taxis (Enoch 2015). Ubers use of the e-hailing services comprises of several pros and cons that needs to be focused on. Future of Taxi Industry in U.K: The taxi industry in U.K economically is standing on a figure of almost 9 billion with none of the service providers enjoying lions share of market, indication presence of stiff competition in the UK taxi industry. It offers enough prospects for the technological companies that are keen on moving in and earning some revenues for themselves. However, the feasibility of such a thing happening needs to be monitored and proper steps need to be considered. The taxi app is getting its fair share of media consideration. Hailo has been quite significant in overhauling its limitations in the market place and presenting itself as an important facet. According to Rogers (2015), Londons conventional black cabs have never been cheaper, especially when one considers it for long distance travels, which limits its market to an extent. Londons taxi industry has many potential customers within the city making it a booming sector. However, UK is a big country, where places like Rochdale and Lincoln exi sts that should be taken account of. These parts need to be scrutinized properly and find out whether these apps would have any significant affect on them like they have in London. Companies as Uber need to offer best quality customer service. According to Gabel (2016), apps popularity has been immense with it being quick and convenient, though UK witnesses phone call bookings to app booking at staggering 999 to 1. Hailo apps are designed especially for the market that states every time, I need a taxi immediately, trying to swipe off the competition and minimizing their tax liability. The companies using technology would not find it easy, a replacing something traditional has never been. Conclusion: Uber cannot be considered the most perfect business model. The key in making this point is essential before analyzing the transport system of London, pertaining its improvement. The safety of passengers is still not guaranteed by this taxi app and nor has it been able to stagnate its price from undulating over when London faces events of exclusive nature. London is not the only exclusive place that is being trying to impound Uber. Transport industry has not yet come in terms with the online advancement. Certain articles that were considered did not focus much on the black traditional cabs existing in London, the drivers they have, their knowledge test that is significant for passing to become accredited as some of the most conventional traditions of the city. However, the black cabs need to lower their prices and improve on their service if they want to give themselves any chance of competing with Uber. The success of Uber has posed enough threats for the taxi industry that has landed them into a zone of uncomfortness. Technologies existing in the transport industry have only been feasible in suburban and urban areas in U.K, though in remote rural locations it is not yet had much of an impact. Uber still has not shown any intent in reaching those rural areas in the coming years as it comprises lot of population of the United Kingdom. Reference: Arcese, G., Campagna, G., Flammini, S. and Martucci, O., 2014. Near field communication: technology and market trends.Technologies,2(3), pp.143-163. Balafoutas, L., Beck, A., Kerschbamer, R. and Sutter, M., 2013. What drives taxi drivers? A field experiment on fraud in a market for credence goods.The Review of Economic Studies,80(3), pp.876-891. Bashir, M., Yousaf, A. and Verma, R., 2016. Disruptive business model innovation: How a tech firm is changing the traditional taxi service industry.Indian Journal of Marketing,46(4), pp.49-59. 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