Report on Socio-economic and Legal Environment

Running head: A REPORT ON SOCIO-ECONOMIC AND LEGAL ENVIRONMENT ON
UBER
A Report on Socio-economic and Legal Environment on Uber
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A REPORT ON SOCIO-ECONOMIC AND LEGAL ENVIRONMENT ON UBER2
Executive Summary
This report discussed about the application based cab service providing company Uber. Uber is
the world’s largest cab service provider that operates in various countries around the world. The
report discussed how the business model of Uber which is based on the concept of sharing
economy has impacted the taxi industry. The taxi industry was dominated by the traditional taxis
but with the entry of Uber, the traditional taxis are approaching towards extinction. It is evident
from the report that issues that has existed in the taxi industry for long has been solved by Uber.
The sharing economy gives the notion of efficient allocation of resources and utilization of
capacity. The technologically disruptive innovations like smart phones, internet of things, GPS
and cheap internet services has supported the business model of the company. The riders and
drivers both have benefitted from Uber. However, there are disadvantages of Uber as it is
gradually becoming a monopoly firm and the day is not far when Uber charges high fare for its
rides. It is argued in the report that with rise of Uber there will be pressure on the labour market
and part from that it would generate various economic difficulties. However, the disruption
brought in by the company is mostly institutional disruption. Therefore, the business model
seemed to be working for the company. The disadvantages of the operation of Uber can be dealt
with effective governmental policies and anti-trust laws. There are many arguments against Uber
but considering the benefits that it provides to the economy cannot be neglected. Thus, it has
been recommended to the company to correct its pricing policies in order to smoothen its way of
operation.

A REPORT ON SOCIO-ECONOMIC AND LEGAL ENVIRONMENT ON UBER3
Table of Contents
Introduction......................................................................................................................................4
Literature Review............................................................................................................................5
Impact of Legal Framework and Political Factors........................................................................11
Conclusion and Recommendation.................................................................................................14
Reference.......................................................................................................................................16

A REPORT ON SOCIO-ECONOMIC AND LEGAL ENVIRONMENT ON UBER4
Introduction
Technological changes have always disrupted the model of businesses. It is one of the
key drivers of new business models. It has been witnessed that with technological changes and
many business models have become obsolete whereas many have become successful. This report
emphasizes on one of such business models that has brought striking change in the transport
industry (Rauters, Jonker and Baumgartner 2017). The concern is about the hire car industry or
popularly known as cab industry. Previously, the cab industry was based on general mode taking
passengers from road. Thus, the condition of physical proximity was there. It means to get a cab
passengers need to come on road and take passing by taxis. With several linked technological
disruption the model of business is changed now. The smart phone technology, smart phone apps
and cheaper internet has paved the path new model of cab industry that came into existence in
broad way with the emergence of application based cab hiring company Uber. The concerned
company was founded by Travis Kalanick and Garret Camp in 2009 under the name of Uber
Technologies Inc. (Wirtz and Tang 2016). It is currently the largest app cab company in the
world. The company was founded with a mission of reducing the cost of riding cabs. Before, app
cabs a cab ride can be availed by a single passenger or a group of passengers travelling together
in same destination. In this case, the fare was mostly borne by a single person. Thus, the cost was
high. The motto of the company was to reduce this cost by allowing different passengers with
different destination to share. In this service every passengers has to bear less fare burden than
the earlier case. This business model of Uber has significantly solved the high cost problem of
hiring cabs. Apart from that, the process of booking cabs by use of smart phone app has reduced
rather solved the problem of inefficient allocation of resources. Passengers don not need to come
on road top book a cab any more. They can book cab from anywhere and they are picked from