Uber is a ride-sharing company that depends on customersusing their smartphone app to have an Uber driver in the surrounding area totake them from point A to point B. Uber competesin the transportation and technology industry, which are both very competitive.Both industries rely on a strong economy and limited political interference togrow and be profitable. Uber faces many economic and politicalchallenges like rising gas prices, government regulation, and low unemploymentrates. Uber needs more drivers to expand theirfootprint and with the lowest unemployment rate in years, means fewer peopleare looking for a job, like driving for Uber.
As gas prices rise, Uber must adjust ride share fees to beprofitable. Uber must also fend off regulation andlicensing attempts from local and state agencies, both of which costmoney. “All societies have laws and regulations that affect businessoperations, although the extent of government intervention varies acrossnations” (Parnell, 2016, p.45). Uber does business in multiple nationsacross the world, and each nation has their own sets of laws and regulationsthey must follow. “Economic forces significantly influence business operations,including growth or decline in gross domestic product and increases ordecreases in economic indicators, such as inflation, interest rates andexchange rates” (Parnell, 2016, p.
55). If a nation’s economy is weak orstagnate, this can impact Uber’s ability to grow its footprint inthat country, along with being profitable.Politicians from both party’s, Republican andDemocrat, face mounting pressure from their political donors to either easeregulations on their industry or enact new ones to handicap their competition.
“In recent years, governments have extended licensing requirements well beyondthe traditional boundaries” (Blevins, 2017, p.1). The only way to fightgovernment intrusion is with public relations campaigns as most people hate significantbig brother intrusion and with paying lobbyists to grease the palms of thepoliticians not to enact such regulations. Both of these recommendationscost money and time but would give Uber the best chance at success.
Doing business in a weak economy is very challengingfor companies, primarily a company like Uber whois a global company. Although our economy is humming along here, thereare other economies in the world where Uber doesbusiness that is struggling. To attract drivers in a stagnate economy; Uberwould need to look at subsidizing some of the drivers costs. Theseactions would be the case also in large metropolitan cities like San Franciscoand New York here in the U.S.
where the cost of living is very high. “Inchanting their demands, the protesting drivers demanded that Uberstabilize their wages and take responsibility for some of the risks andliabilities of driving” (Dubal, 2017, p.130). To appeasetheir drivers and pay them a living wage, I would recommend Uberestablish a merit-based pay scale based on their industry, along with bonusesfor accident-free driving. I would establish Uber hubsin struggling economies that would provide vehicles to people who want to drivefor Uber, but cannot afford a vehicle. “Uberlacks the scale/network economies needed to rapidly achieve profitability in acompetitive market” (Horan, 2017, p.
36). Although Uberneeds market domination to be financially profitable, I believe that if theyfollow my recommendations, they could ultimately force cab companies out ofbusiness, absorb many of their drivers to work for them. These actionswould slowly, but, inevitably over time, establish market dominance for Uberregardless of the economic times.
