Uber's Business Model and Ethical Concerns

This paper describes the mission and vision of Uber, and also analyzes key features of their business model and ethical concern regarding their business model.

Running head: BUSINESS AND SOCIETY
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1BUSINESS AND SOCIETY
Introduction
Uber company is an American global transportation network as well as a cab company which is
based on an app. Uber provides transportation as well as food delivery services all around the
world. The company operates its business in the cities of different countries. Due to low
overhead, it tends to be less costly than another transportation service like taxis. This paper
describes the mission and vision of Uber, and also analyzes key features of their business model
and ethical concern regarding their business model.

2BUSINESS AND SOCIETY
Discussion
Mission
The mission of the company is that they provide a lot more- customer support, reliability,
comfort, style and diminish frustration. The Uber ride is to make the passenger feel special. Their
transportation as reliable as running water, everyone for everywhere (Uber, 2019).
Vision
The vision of the company is smarter transportation with fewer amounts of cabs and
excellent access, the ride that is safer, accessible and reliable. Their transportation service creates
enormous job opportunity and a higher level of income for cab drivers.
Business Model of Uber and stakeholder interest
Uber business model consists of three components. These are- cab driver, passenger and fare
payments (Cramer and Krueger 2016). Passengers, cab drivers all are their stakeholders. Uber
provides them an exclusive service, that helps to create stakeholder interest.
Cab drivers
The selection procedure of the Uber cab driver does not involve any exact algorithm.
Any person who has a registered car and driving license is compatible to become an Uber cab
driver. The drivers are enlisted on the basis of seven-year background verification (Teece 2018).
Uber provides them a cell phones for connecting to customers. The cab drivers are the crucial
sprocket in the Uber business model.

3BUSINESS AND SOCIETY
Passengers
The passengers initiate the business model of Uber. Uber registered users download the
Uber app to their Smartphone’s, and if they need a cab, they book a cab and communicate
directly to the cab driver via the app. Customer can also track the cab on their smartphones. This
service is advantageous for customers. Uber provides them comparatively low prices
comfortable service.
Fare Payments
The estimated price that is provided to the customer is depending on the cab type, peak
hours and distance. Customer pay via their debit or credit cards. They also pay through direct
cash. Uber payment procedure is very easy and secure.
The model of this business works in four simple steps-
Step 1: In the first step customer places the booking request for a taxi via the Uber app by
providing the pick-up location and drop location.
Step 2: Once the company has received the booking application, the customer information is
sent to the cab driver. Now, based on driver’s availability, the cab driver can either reject or
accept the order.
Step 3: Once the cab driver accepts the request, the passenger is then notified and gets all the
information about the taxi driver and his location. The app helps to track the taxi’s route and
calculate the estimated time of arrival.

4BUSINESS AND SOCIETY
Step 4: Once the cab arrives at the proper destination, the ride is noted. Then the passenger is
required to do pay. When the total procedure is complete, then the passengers get an option to
rate. The rating and customer riding experience are crucial because it helps the company to
measure service quality offered by each cab driver.
KEY PARTNERS
 Driver and their
car
 Investors
 Map provider
KEY ACTIVITIES
 Business
development
 Customer
acquisition
 Hiring drivers
 Customer support
KEY RESOURCES
 Technological
platform
 Skilled drivers
VALUE PROPOSITION
Customer
 Minimum waiting
time
 Comparatively low
price
 Cashless ride
 Track on map
Drivers
 Easy payment
 Flexible working
schedule
CUSTOMER
RELATIONSHIP
 Social media
 Rating
 Review and
feedback
CHANNELS
 Website
 Android Apps
 IOS Apps
CUSTOME
SEGMENT
 Those p
who
have
car
 Who w
lower
cab at
doorste
COST STRUCTURE
 Technological infrastructure
 Compensation of employees
 Marketing and advertising expenditure
REVENUE STREAMS
 Rides on km basis
 Uber cabs, Uber prime, Uber SUV etc.
Profit structure: Uber distribute 80% of total earning to their taxi driver and 20% to Uber. Even
after twenty percent pay cut, the Uber cab driver earn more than other traditional cab drivers. In
some location, the company had to reduce its percentage due to competition of other similar
transportation companies.

5BUSINESS AND SOCIETY
Ethical issues:
According to news article- Nowadays the company Uber faces a lot of problems. Many drivers
have been convicted with misbehaving, sexually assaulting and sexual harassment of the
passengers. The company is responsible for that reason because Uber does not check the
background of the drivers properly (MacDonald 2016). Misbehaving and sexual harassment is
one of the big ethical issues. Sometimes drunk drivers driving Uber cab and misbehaving with
customer that also been registered. Many times car has been scratched and damaged by accident,
but no responsibility has been taken by the company.
Conclusion
The present study concludes that the business model of Uber is structured efficiently to instigate
the stakeholder’s interest to work and contribute to the development of business. To excel further
in the business it must address the unethical issues it is recently facing by the company.
Recommendation
 Maintain reliable pricing for the passenger in both rural and urban cities
 Before selecting a driver, collect their proper background information
 Proper driving training must be required
References

6BUSINESS AND SOCIETY
Chee, F.M., 2018. An Uber ethical dilemma: examining the social issues at stake. Journal of
Information, Communication and Ethics in Society, 16(3), pp.261-274.
Cramer, J. and Krueger, A.B., 2016. Disruptive change in the taxi business: The case of Uber.
American Economic Review, 106(5), pp.177-82.
MacDonald, C., 2016. Uber is built on trust [ethics opinion]. IEEE Technology and Society
Magazine, 35(2), pp.38-39.
Teece, D.J., 2018. Business models and dynamic capabilities. Long Range Planning, 51(1),
pp.40-49.
Uber. (2019). About Uber - Our Story - Vision for Our Future. [online] Available at:
https://www.uber.com/in/en/about/ [Accessed 15 Sep. 2019].