Disruptive Innovation: A Case Study of Uber. Business & Marketing (Essay Sample)

Disruptive Innovation: A Case Study of Uber
Name
Institution
Date
Disruptive Innovation: A Case Study of Uber
Introduction
Disruptive innovation has the effect of altering the manner that business is run in an industry by taking advantage of technology to attract an ignored segment of the market by the dominant players in the industry. Uber is a taxi-hailing app that creates an online interface that connects a registered driver to their passenger, who initiates the transactions by asking for a ride over the app. At present, Uber is the largest company in the international personal road transport industry, where it makes an average of 15 million daily trips in 600 cities across 65 countries globally and has employed at least sixteen thousand people (Damle, 2018). On the other hand, the city taxis were the ‘pre-Uber model’ taxis, which had managed to isolate new entrants from the taxi business using political powers to create legislation that created barriers to entry. Damle, V. (2018) has conducted a study to determine whether Uber can be considered a disruptive technology in the international personal transportation business. Since its inception in 2009, Uber has managed to transform the operations of the taxi business to the point that most city taxis were converted to a similar peer-to-peer app (Damle, 2018). The advent of Uber created a shift in market demand that resulted from the convenience and other benefits that the apps created to resolve the issues that were experienced by city taxis. This report analyzes the case of Uber as a Disruptive Innovation while addressing two key issues. The paper starts with a critical application of problem-solving techniques applied to the business issues in the case and then develops solutions that may be useful in the future.
Overview of the Case
According to Christensen’s definition, a Disruptive Innovation must develop from an underserved, low-end, and a new market, which never existed before. Therefore, Christensen does not consider Uber Technologies Inc. a disruptive technology in the taxi industry because it took advantage of technology to attract the existing market by offering what the city taxis failed to offer in terms of convenience. Initially, Uber was designed to target the millennial population, which is tech-savvy, lazy, and selfish, using taxi-hailing apps (Damle, 2018). The millennial population was not the only underserved community by the city taxis. This is because every taxi user demanded the same features from the city taxis already, which made the target market to be composed of all the taxi users. Therefore, according to Christensen, Uber did not target an underserved or unserved market and did not grow by understanding the needs of the customers as an ordinary disruptive technology from that market.