If you are in a hurry to a place and all the taxis
on the road are occupied, no worry, Uber can help you solve the problem. All
you need to is open Uber App on your smartphone and submit an order, a car will
soon drive by and take you to your destination. However, the prevalence of Uber
squeezes the market shares of taxi, making them lose a large part of income.
And the company now are involved in a lawsuit filed by the governments in several
countries. Though facing with lawsuits, Uber continues to serve consumers and
the lawsuits do not influence users’ favor to Uber.
A report from Bloomberg predicts that the revenue
of Uber keeps growing every year, and it can reach 3.5 billion dollars in 2023,
which exceeds the market value of about half of the companies in Standard &
Poor index.
The graph from Forbes shows that the market share of Uber surges
from 9% in 2014 to 29% in 2015. At the same time, the revenue of taxi drivers is
eroded seriously, with the decrease of 17% market share and rental cars are
also influenced.
Uber is changing the way of transportation for
people and leading the taxi industry to a new direction. The author will
utilize Business Model Canvas to analyze how Uber creates, delivers as well as
captures values and changes the taxi industry.
What makes Uber most special is that for the
company both passengers and drivers are their customers and their roles can
exchange as demand sometimes. The company is targeting at people who do not own
a car and they usually need to travel to another place in rush hour. With the
help with mobile app, the order can be picked up by the drivers nearby so that
it saves time for passengers. And users can track how long will drivers take to
pick them up on the electronic map. Compared to the charge of taxi, the cost of
each ride on Uber is lower, so the price advantage attracts more users to join
in Uber community. For drivers, people who have a cars are willing to earn
extra income by driving are the main source. There are also people who want to
get new experience and meet more strangers. Both of passengers and drivers are
the target market of Uber. For passengers, Uber offers them with on-demand
service, which is overthrow of traditional taxi industry. When consumers
require the service, the service will arrive at agreed time after the
manipulation on smartphones. It not only provides convenience to passengers,
but also invests drivers with more opportunities. Drivers are able to regard this
job as part-time job, since it is flexible and does not influence their daily
life.
At first, when the
company was launched, in order to gain favor of innovators, the company offers allowance to new users and coupon to those who invite their friends to the
usage of the App. It is hard to earn profit at first, but later, more and more
users in many countries endow the company with great profit. Since the company
do not have to hire full time drivers and buy rental cars, it saves a large
amount of cost. Uber gets revenue from the car rides based on the distance and
different types of cars are charged differently. Recently, the company apply a
new policy, surge pricing, meaning that if the
demand of service is increasing, meanwhile, the number of available drivers is
limited, passengers will be charged at a higher price per mile than usual.
What’s more, the
payment way is quite different from the traditional taxi. Paper money is not
accepted, so passengers need to connect their credit cards or other online
payment to the App and drivers gain income online. It is the reflection
of the development of technology and offer users with convenience.
Uber is a big challenge to traditional taxi industry
since it changes the role of target consumers, creates new value of on-demand service,
provides more convenient way of payment. It does change people’s travelling way
and people’s attitude towards demand of service. The new business model which
it establishes, makes not only the industry but the world more efficient.
