Question

Textbook: Information Systems Business Concepts
Baltzan, Business Driven Technology, 8e ( Baltzan, 8e)

Disrupting the Taxi: Uber

Ray Markovich started driving a taxi in Chicago three years ago after closing his struggling wireless-phone store. Driving a cab wasn’t particularly gratifying or lucrative; he had to pay $400 a week just to lease his 2011 white Ford Escape. It was predictable if monotonous work.

Well, there’s nothing monotonous about it now. In June, Markovich, a thin, well-dressed man with short brown hair and spots of gray in his mustache and goatee, walked into the local office of Uber Technologies, the San Francisco-based taxi-technology startup.

Uber put him through an hour of orientation, gave him a free iPhone that carries its car-dispatch app and some gear to mount it on the windshield, and sent him on his way.

Since then, Markovich has had to dodge flak from traditional cabbies who complain they can no longer pick up riders in the city’s tonier neighborhoods, and he’s receiving a constant flood of emails from Uber itself, offering steep discounts on new cars and other perks to secure his loyalty.

At the same time, he has increased his earnings by about 20 percent and says he’s simply evolving with his customers. “No one under the age of 40 with a smartphone is going out and getting a cab anymore,” says Markovich. “I say, if you can’t beat ’em, join ’em.”

There’s a battle for the future of transportation being waged outside our offices and homes. Uber and a growing collection of well-funded startups, such as the ride-sharing service Lyft, are trying to make getting a taxi as easy as booking a reservation on OpenTable or checking a price on Amazon.com — just another thing you do with your smartphone.

Flush with Silicon Valley venture capital, these companies have an even grander ambition: They want to make owning a car completely unnecessary. They’re battling each other, city regulators, entrenched taxi interests and critics who claim they’re succeeding by running roughshod over laws to protect public safety.

“Being out in front of the taxi industry, putting a bull’s-eye on our back, has not been easy,” says Uber CEO Travis Kalanick, 37. “The taxi industry has been ripe for disruption for decades. But only technology has allowed it to really kick in.”

Nearly four years ago, Uber introduces the idea of allowing passengers to book the nearest town car by smartphone and then track the vehicle on a map as it approaches their location. After the ride, the service automatically compensates the driver from the customer's preloaded credit card- no awkward tipping required. It's a simple experience and a much more pleasant way to get a ride than stepping onto a busy street and waving at oncoming traffic.

Uber has raised $307 million from a group of backers that include Google Ventures, Google's investment arm, and Jeff Bezos, the founder of Amazon. It operates in 270 cities around the work and was on track to book more than $1 billion annually in rides in 2013, according to the financial information that leaked to the gossip website Valleywag last November. In February alone, Uber expanded to Dubai; Honolulu; Lyon; Manila; Milwaukee; Pittsburgh; Tucson; Arizona; and Durban, South Africa.

In the process, Uber has managed to become one of the most loved and hated start-ups of the smartphone age. Its customers rave about the reliability and speed of the service even as they bitterly complain about so-called surge pricing, the elevated rates Uber charges during hours of high demand. Uber has also been blocked from operating in several markets by regulators out to protect the interests of customers or entrenched incumbents, depending on whom you ask. After customers complained about the ban in Austin, Texas, the Austin City Council adopted a regulatory structure for ride-sharing, enabling Uber to operate in the city. In Boston and Chicago, taxi operators have sued their cities for allowing unregulated companies to devalue million-dollar operating permits. Things grew especially heated recently in Paris when incensed taxi drivers shut down the highway exits to the main airports and gridlocked city traffic.

Kalanick calls the cab industry a "protectionist scheme." He says these protests are not about the drivers but cab companies "that would prefer not to compete at all and like things the way they are."

His opponents are equally critical. They accuse Uber of risking passengers’ lives by putting untested drivers on the road, offering questionable insurance and lowering prices as part of a long-term conspiracy to kill the competition, among other alleged transgressions. Fueling the anti-Uber cause is the case of a San Francisco girl who was struck and killed by an Uber driver.

“Would you feel comfortable if you had a 21-year-old daughter living alone in the city, using a smartphone app to get in a vehicle for hire, and that vehicle ends up being a 2001 Chevy Astro van with 300,000 miles on it?” says Trevor Johnson, one of the directors of the San Francisco Cab Drivers Association. “I’ve made it my personal mission to make it as difficult as possible for these guys to operate.” Kalanick calls himself the perfect man for the job of liberating drivers and riders. His previous company, video-streaming startup Red Swoosh, was well ahead of its time, and Kalanick limped along for years taking no salary before selling it to Akamai Technologies in 2007 for a modest sum.

“Imagine hearing ‘no’ a hundred times a day for six years straight,” he says. “When you go through an experience like that, you are sort of a hardened veteran. You only persevere if you are really hard-core and fight for what you believe in.”

@ Identify Uber's ebusiness model and explain how it is disruptive.

@ Explain why some market segments are not included in Uber's business model.

@ List the ways Uber is using collaboration and wireless technologies to improve its competitive advantage in the taxi market.

Please, write several pages and your words in detail. I need your answer very detailed.

Answer 1

[1]

[A] Uber’s e-business model –

Uber is a smartphone application that gives on-request service to clients. It associates willing travelers to taxi drivers. Cab drivers utilize their very own vehicles when giving taxi service and Uber gets 20% of the toll. The all-out procedure is basic, enlisted Uber clients request a taxi utilizing the Uber application, an Uber driver at that point dispatched to the traveler's area and help the travelers to arrive at his goal. The traveler's charge card is utilized as the sole payment strategy.

1. Uber application is easy to use, quick responsiveness from servers and frameworks and negligible glitches make Uber uncommon.

2. Flagging down a taxi with the smartphone is simple and any traveler can profit by it.

3. Uber has built up a strong framework, marking and customer trust in the taxi service business.

The Uber e-business Model in a Nutshell -

1. The Taxi Driver - Anyone with a driving permit and a vehicle can apply for an Uber driver in any Uber secured urban communities. Subsequent to screening, the driver is enrolled in the Uber framework and given an Uber iPhone. This furnishes a consistent salary to anybody with a vehicle without extra risk or speculation.

2. The Passenger - Registered Uber clients download the Uber application to their smartphones and on the off chance that they need a taxi, they call a taxi by means of the Uber application. They can likewise follow the taxi on their smartphones as it draws near. This administration is advantageous for the travelers, gives them moderately ease agreeable help.

3. Partitioning the Profits - Uber separates the passage, generally 80% to the driver and 20% to Uber. Indeed, even after a 20% compensation cut, the cab drivers win more than the conventional taxi administrations. In certain urban areas, Uber needed to decrease its rate in view of rivalry from comparable organizations like Haio and Lyft. It is evaluated that Uber needs to bring down its benefit in every one of the urban communities it works in the coming months.

4. Future Growth –Uber needs to put resources into innovative work for future development. The underlying reinvestment will be a humble sum, yet enough to hinder future income. And, lawful and administrative issues will expand costs. Development opportunities for Uber are huge, it as of now covers 200 urban communities in 55 nations and will advance to many new urban areas maybe within a year or so.

[B] Uber being Disruptive –

The taxi and ride-sharing industry have consistently been focused, however with the passageway of Uber into the image, the degree of rivalry all of a sudden rose higher.

1. End of different exchange costs

Uber has made it with the goal that these exchange costs never again exist. There are no charges to be paid when holding a vehicle through the versatile application. This is surely not the situation with your traditional vehicle contract services, where you need to pay a charge for each progression of the exchange of saving or procuring the vehicle, autonomous of the real passage that you will pay toward the finish of the ride.

2. Empowering increment in the profitability of benefits and business rates

The idea of sharing economy, which Uber focused in on, includes turning resources that are either unused or under-utilized into assets that are gainful or, at the end of the day, beneficial. Private cabs that are not utilized regularly are as yet bringing about support costs. Regardless of whether they are left to sit in a parking area, their worth still deteriorates. Uber tended to this by giving vehicle proprietors an alternative where they can get cash out of these inert assets. As it were, this likewise gives extra pay to drivers who like to work low maintenance, which means they will possibly drive when they are accessible.

3. Utilization of cutting edge innovation

[A] The improvement of a mobile application is potentially the best procedure that Uber utilized. Individuals love to utilize their smartphones; truth be told, their day by day lives include substantial use of smartphones, with key exchanges directed over the smartphone. By taking advantage of this, Uber caused the riding open to paying attention. For Uber, they knew that they have an ensured market in smartphone clients; they simply needed to cause them to understand that they need their administration.

[B] Innovation has been known to have the option to separate and move beyond administrative section boundaries [another point that legislatures disagree with] on account of the utilization of the web. The boundless reach of the web additionally implied it was simpler for Uber to extend to different urban communities all around the globe.

[C] Uber exploited the idea of shared utilization by concocting a mobile application that is exceptionally simple to utilize while pressed with highlights that are intended for clients' benefit. For instance, the utilization of GPS innovation for coordinating drivers and their vehicles with travelers, and following or checking the excursion, eliminates time, exertion, and search costs. Constant coordinating additionally diminishes the interim it, for the most part, takes between deciding to a taxi organization and the taxi landing at the area you determined to lift you up, on the grounds that the application matches you with the driver that is nearest to your area.

[D] Booking your pickup time is another component that makes Uber increasingly appealing. Travelers can save their ride regardless of whether they have not yet landed at the area where they will be grabbed, and it unquestionably decreases the issue of saving their ride later.

[2] Some market segments are not included in Uber's business model because–

Uber Taxi – Uber was presented with the new arrangement, which enables the explorer to book the close by city by utilizing the smartphones. Uber is utilizing the remote system to every single taxi and this business is full founded on the remote system. Remote Networks – Wireless system is a method of associating various gadgets in a system without utilizing any physical correspondence, it utilizes a media transmission system to interface gadgets. Uber utilizes multi-fragment kind of segmentation and as needs are, it focuses on a few client sections with various degrees of administration. The ride-hailing giant offers economy administrations, for example, Uber X, Uber Pool, and Uber XI for cost-cognizant clients. Simultaneously, Uber PREMIUM comprising of a fleet of trendy vehicles is accessible for clients who wouldn't fret to pay more.

1. Having understood that it's powerless when a lot is on the line segment, Uber is irately fabricating different defensibilities. Beginning with a central system impact [even a powerless one] makes this simpler in light of the fact that they can use their enormous system to turn out new defensibilities.

2. So, Left unaddressed, competitive exposure because of this defect in their system impacted Uber into a circumstance as we see with the carrier business, where there are razor-slender edges and high affectability to value rivalry. That is a distinct difference to the high edge, victory take-most market you typically observe with system impacts organizations with the segments if induced.

3. Most importantly, Uber is hindered in certain urban areas by controllers to secure the interests of clients or dug in officeholders. Ubers additionally does exclude clients who are without a smartphone for Uber's application.

[3] Ways in which Uber is using collaboration and wireless technologies to improve its competitive advantage are –

1. Location services - When clients demand a ride on their portable application, Uber utilizes an area administration to make sense of the two riders' and drivers' areas. So as to inform a close-by driver of the solicitation and give a moment answer, a precise area innovation is critical.

2. Route framework - For Uber drivers, a solid versatile route framework is an unquestionable requirement to have so as to get and drop off riders.

3. Charging framework - Fare is reflected just after the ride is finished on the portable. This "money free" framework is key to Uber's model.

4. Rating framework - A two-way appraising framework empowers riders and drivers joining forces with the organization to assess the ride experience following drop off. It urges riders and drivers to be at their best conduct and screens driver quality.

5. 4G arrange - Most of the smartphones are utilizing the 4G LTE system. That implies data can be recovered and sent through an IP exchanging parcel organize at the speed of multiple times quicker than 3G. Specialist organizations all have poor inclusion in specific zones and that doesn't function admirably for this administration.

[A] Geolocation -

Innovation has progressed, and it has turned out to be a path simpler to get data about the points of interest of area highlights.

Recognizing a device’s location -

1. Geolocation for iOS utilizes the Core Location structure to find a client's gadget. The Core Location structure gives classes and conventions to design and timetable area conveyance and send area occasions to the server. The Core Location structure likewise lets Uber characterize geographic areas and screen a gadget's developments as it crosses characterized limits.

2. Geolocation for the Android adaptation of the Uber application was executed utilizing Google's Location APIs. They can shrewdly oversee fundamental area innovation while meeting different improvement needs when executing area based highlights.

Providing driving directions

Enrolling the application as a steering application at that point makes bearings accessible to the Maps application and all other mapping programmings on a client's gadget. Uber application for iOS utilized MapKit, and Android is made conceivable by the Google Maps Android API.

Integrating with mapping programming

Presently, Google Maps offers incorporation with Uber. However, Google Maps isn't the main help that Uber employments. To abstain from paying Google for access to their answers, Geolocation is to be sure the most significant innovation in Uber's innovation stack. Be that as it may, you may be keen on different functionalities too on the off chance that you need to realize how to manufacture an application like Uber.

[B] Pop-up messages and SMS -

Uber instant messages are controlled by the Twilio media communications supplier. To execute pop-up messages in the iOS application, Uber more likely than not utilized Apple Push Notifications Service, and for the Android application they more likely than not utilized Google Cloud Messaging [GCM].

[C] Payment Integration –

1. Uber utilizes a cashless framework. You can pay by means of promotion code or credit card. This expels any human-to-human money moves from the condition, including tips. [Uber takes 20 percent of a driver's toll, which makes for a somewhat productive plan of action.]

2. When tolerating card installments, there are sure prerequisites that organizations must conform to. In the US, these are known as PCI necessities. The Payment Card Industry Data Security Standards [PCI DSS] are a lot of prerequisites intended to guarantee that all organizations that procedure, store, or transmit credit card data to keep up a protected domain. As a result, this applies to any dealer that has a Merchant ID [MID].