Case Study: Buber's Business Model

1.) Buber describes itself as a technology company rather than a transportation company. It’s business model revolves around the idea of the sharing economy. The sharing economy is a new idea in which entails people sharing their time and resources. Hoover’s approach was to build a platform in which riders and drivers could connect rather than provide them with the physical transportation. In this way they can exploit a loophole in which their drivers would not be required to be properly licensed in transportation. Meaning that their drivers license and personal vehicle would be good enough for transportation. This is unlike the limo industry or taxis where a driver needs to be properly licensed and insured for personal transport. Another key aspect of their model is that by exploiting this will pull they are also able to consider the individuals that drive for them as independent contractors. This makes it so that a drivers personal actions in their vehicle are not liable by Uber. This also has the added effect that breast corporation is not responsible for their benefits beyond their pay. As an independent contractor you are responsible for your own benefits. This …show more content…
By taking a percentage of the fair from the driver is how Uber makes its money. By having independent contractors and describing itself as a technology company it provides an app and then essentially charges its drivers for that use. By not employing drivers, vehicles, and other administrative costs Uber has a very low-cost strategy. It is in Uber’s best interests to have as many drivers as possible using its app because this enables it to take a cut from as many people as possible. If they are able to keep their administrative costs down and their driver availability up along with increased ridership, Uber becomes a money-making machine. This also relates to how Uber approaches competing in the market. It does so by using a low-cost differentiated provider