Uber Case Study

Kevin Matos

BA 462

                Uber

Many people think that Uber is a taxi business but in actual sense, it is not because it does not own any cabs or employee cab drivers. Instead, the company links the driver or the car to the customers that are looking for a ride and Uber receive a portion of the fare for the provided service. Its value comes from the screening it conducts to the cars and the drivers to ensure that their customers are safe and comfortable, its convenience, ranges of cars and the pricing and the payment system (Pool 78).  The figure below shows the different steps in the Uber business model and what Uber offers at each stage.

Uber business model [pic 1]

Figure 1Uber business model

Uber, the disruptor.

 First, the innovation is considered as disruptive in the sense that, it allows a new entrant to join a targeted market (taxi business) thus disrupting the status quo. As a result, it captures the excess profits in the market (Pool 78).   Secondly, assuming that the disruptor has the ability to succeed in the targeted market, such success can allow the disruptor to enter new and other potential large markets in future.

Market share

The limo and the taxi market is largely dominated by small and local player who are regulated in various cities. The cities restrict the entry of these cabs in the market as well as regulating the charges to the customers. Since Uber relies on a portion of the overall revenue generated by the cabs, the market share depends on factors such as regulation. For instance, the cities where Uber is trying to generate its revenues are currently regulated thus making it difficult for the players to compete. As a result, this affects profit realization of Uber and the speed of penetration in the market (Christensen 36).

Work Cited

Christensen, Clayton M. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. , 2013.

Poole, Matthew. Frommer's California. New York: Wiley, 2012.