[uber] – HOW A TECHNOLOGY FIRM IS changing the traditional transportation model | | By Mark Boeckel, Brent Sprunger, Kevin Smith, and Emily WorkMarch 6th, 2012 |
Uber is an App-Powered on-demand car service provider for smart phones. Notwithstanding its very unique name, investors have begun to take note of Uber during the past year as it has stolen market share from traditional transportation companies. We will analyze the value proposition of its technology and examine the differentiation Uber creates to stay ahead of both potential competition and the various cab laws and regulations across the United States and Europe.
Based upon this analysis, we will provide detail to investors about …show more content…
Customers who travel short distances are subject to the firm’s $15 minimum fare as well. The pricing structure is about twice the price of cabs in the city but Uber does not charge extra for additional occupants and the pricing structure is still reasonable enough to achieve scale among traditional cab customers.
The pricing structure also leads to an all electronic payment process. The tip is already included in the final fare and all the customer has to do is keep their credit card information updated with the Uber. This is very convenient for business accounts, which is preferred when entertaining customers.
The final and most controversial pricing structure is Uber’s use of dynamic pricing for high volume days such as New Year’s or Halloween and also during inclement weather conditions. Uber notifies customers of the increased pricing structure when ordering a car in an effort to reduce demand, but because fares are computed after the service is complete, this pricing structure has become very controversial.
Technology can be divided into two components, the app technology for consumers and the demand calculation technology at the firm. The app technology is available for iPhone/Android devices and uses GPS from the requested pickup destination to display a map of all available Uber cars in the area. Uber calculates the nearest driver and