1. The Taxi Industry and its Major Forces of Change
Standing on the street waiting for an available cab, unsure how much a ride will cost, or whether it will let pay by card, and being uncertain about the arrival time given the traffic jam are all common complaints consumers have about taxis. Until some years ago, taxis were the only car service providers that could move people around a city, usually in a convenient, fast and comfortable way. However, many unmet needs and high regulations, combined with low levels of investment have led to unsatisfied consumers in a stagnant industry. Consequently, new players have entered the market by finding an opportunity in covering these market gaps. They are characterized for investing in technology, …show more content…
On the one hand, Uber’s founder Travis Kalanick executes in a disruptive manner, and this in turn is perceived in the company’s brand and “way-of-doing”. On the other hand, the taxi industry is known for its conservative culture and strong regulation support, which in turn explains their little effort in innovation. Therefore, even though every revenue model in the industry is partially based on a variable structure, the new players have introduced even more variable and flexible ones, closer to the market’s demand. Thus, Uber is changing the focus from profit to value creation in its revenue model because the value created is different at every moment and for each …show more content…
However, with airlines and hotels, and others like eBay and Google, dynamic pricing (DP) is starting to enter new sectors to optimize prices and balance supply and demand forces. Arvind Sahay states that there are four main reasons why DP is being increasingly adopted today: (1) more access to dynamic pricing technologies at affordable prices, (2) wider acceptance from consumers if approached correctly, (3) search of new ways to obtain value with a higher pressure on prices and supply, and (4) a switch to downstream supply chains, resulting in a dynamic
Standing on the street waiting for an available cab, unsure how much a ride will cost, or whether it will let pay by card, and being uncertain about the arrival time given the traffic jam are all common complaints consumers have about taxis. Until some years ago, taxis were the only car service providers that could move people around a city, usually in a convenient, fast and comfortable way. However, many unmet needs and high regulations, combined with low levels of investment have led to unsatisfied consumers in a stagnant industry. Consequently, new players have entered the market by finding an opportunity in covering these market gaps. They are characterized for investing in technology, …show more content…
On the one hand, Uber’s founder Travis Kalanick executes in a disruptive manner, and this in turn is perceived in the company’s brand and “way-of-doing”. On the other hand, the taxi industry is known for its conservative culture and strong regulation support, which in turn explains their little effort in innovation. Therefore, even though every revenue model in the industry is partially based on a variable structure, the new players have introduced even more variable and flexible ones, closer to the market’s demand. Thus, Uber is changing the focus from profit to value creation in its revenue model because the value created is different at every moment and for each …show more content…
However, with airlines and hotels, and others like eBay and Google, dynamic pricing (DP) is starting to enter new sectors to optimize prices and balance supply and demand forces. Arvind Sahay states that there are four main reasons why DP is being increasingly adopted today: (1) more access to dynamic pricing technologies at affordable prices, (2) wider acceptance from consumers if approached correctly, (3) search of new ways to obtain value with a higher pressure on prices and supply, and (4) a switch to downstream supply chains, resulting in a dynamic