Disadvantages Of Uber

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Reed, M. (2015) review supplier have moderate power to influence Uber’s profit in the transportation service. Since Uber only provides it service to the driver and rider, who uses their web application, their business model depends entirely on drivers with their own vehicle and no substitute for individual drivers as Uber does not own vehicle. Further, anyone with a car and driving license has options to either Uber or other competitor services. Consequently, the suppliers have the power to negotiate a higher price at Uber’s expense. Further, the drivers will not need to pay any switching cost, as they only term to use the app. Reed, M. (2015) also justifies Uber are not powerless because Uber has the power to set terms and rates.

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Transportation industry before Uber starts people had to wait at street side and have to signal a taxi to stop. The taxi fare was structured based on time and distance trip, sometimes the drivers do not use the meter and will demand high fare. The inconvenience waiting time and high rates were a problem for people. Taxi driver needs a professional taxi license to operate the taxi and the license price high. Driver income is paid based on full-time work to cover the daily rental work and fixed surcharge. The public transportation in some country was poor and taxi supply was limited. The situation gets worse during peak hours as people had a hard time finding a taxi. Uber comes with a flexible solution for both driver and rider. Langendonck, N.V. (2015), Juggernaut (2015), Lashinsky, A. (2017) and Reed, M. (2015) acknowledge Uber receiving threats from the taxi drivers. Thousands of taxis drivers go on strikes in many countries and some strikes and incident managed to convince the government to ban Uber in the country. Furthermore, Uber has a new competitor that provide similar service such as Lyft and Grab. Since the companies use the similar business model and supplier, they are all competing for customers and also for the supplier. Funk, J. L. (2015) had made a competitive analysis between Uber, taxis and Lyft. Reed, M. (2015) reviews through rigid competition Uber can be regarded as the industry leader as it has much more capital compared to its
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