Uber Strategy Essay
[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…
Facing Uber is a long and ubiquitous history of taxi and limousine laws that heavily regulate the industry, and protect the rights of taxi and limousine owners. Taxi and limousine restrictions are largely accomplished on an international basis through use of strictly controlled taxi medallion policies that fluctuate by region. First introduced in New York City in 1937, the taxi medallion license was intended to govern the volume of taxis entering the New York boroughs while creating stability in the economics of taxi fares. The original price of a NYC taxi medallion in 1937 was $10. Since that time, the taxi medallion value in NYC has continued to grow rapidly over the years surpassing even the Dow Jones industrial average and the cost of oil. As recently as December 2011, two medallions auctioned in New York for over $1 million, and economists predict the value will continue to rise as taxi demand remains constant. The taxi medallion policy is far from a New York phenomenon, and today is just as common of a practice in major US taxi markets such as Chicago, Washington D.C and San Fracisco, and internationally in Paris and London.
The thrust of the controversy facing Uber is whether the legal definition of a taxi and limousine includes an operator such as Uber that provides a reservation arrangement service to customers. Kalanick defends it’s business practices