UBER Technologies Inc: A Technology Startup Company (Research Paper Sample)

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Uber
UBER Technologies Inc. is a technology startup company providing services of ride-sharing by connecting independent drivers and customers by using an app. It has an international base in 58 countries with a value of $41billion.Its services cost less than the traditional taxi services, making it popular and therefore upending the taxi industry. This paper attempts to discuss situations where UBER faced external challenges or opportunities, detailing the company’s response, and explains PESTLE and Porter's 5 forces on the company
One main accusation tabled against UBER is that it does not adhere to proper standards of safety. It is alleged that its outsourced drivers were involved in three rapes, mainly in Delhi, India; Chicago; and Boston. These rapes have shrouded the company’s image and put its safety into question. In addition, a lawsuit in San Francisco for the wrongful death of a six-year old alleging the driver being distracted by the UBERX app struck and killed the girl. The company responded by claiming that the driver wasn’t an agent of theirs and was neither en-route nor transporting a customer at the time of the accident (BBC 1).
On re-establishing their safety reputation, the company added a ‘safe ride checklist’ to its app, a pre- pickup notification encouraging customers to confirm the registration plates and verify the drivers name and appearance before entering a taxi. Furthermore, a team of safety and fraud professionals have been added to authenticate the drivers, to gather with dedicated incident response teams to address customer complains India (Michael 1).
Another challenge faced by UBER is insurance criticism. UBER’s website claims it offers a one million US dollars claim in liability insurance plans for its drivers. Some states however have issued warnings, claiming that the rideshare insurance does not cover them in accident incidents, citing the use of personal cars for commercial purposes. Because of this, these states are reconsidering insurance options. This has been solved by insurance firms such as Geico and MetLife moving in to offer packages for rideshare services (Zoephel 4).
Moving on to Poter’s 5 forces on UBER, first, it can be considered that the threat on new entrants is high. UBER has new patents, with several patents being signed recently. Besides patents, UBER does not have any other protection. In addition, the new entrants need low seed capital to start a business. Furthermore, there are no costs to switch services.
The bargaining power of the suppliers can be considered to be moderate. This is because UBER outsources all assets. In addition, there are no substitutes for individual drivers, and the suppliers have the power to negotiate for higher prices at UBER’S expense. Furthermore, drivers do not face any switching costs and UBER has the power to set terms and rates (Zoephel 3).
The bargaining power of the buyers can be considered to be high. This is because UBER is not a day-to-day service, and customers can choose when to utilize it. The switching costs for the customers are also quite low. There is also an abundance of competitors and substitutes (Lydia 1).
The threat of substitute products and services is also high. This is caused by the existence of many substitutes across the transportation industry like trains, buses and other taxi’s, with the closest substitute being the traditional taxi service. Public transportation is also deemed to pose a serious threat. UBER’S ability to make profits is seriously affected by substitutes (Zoephel 5).