Emergence of Platform Businesses

The report evaluates the progressive nature of online platform business, namely Uber in the world market where it has been able to attain the leading position. It delves into the introduction of the company forecasting its operational motives and success throughout the years. The report elevates the value of the brand and simultaneously connotes to the various factors that have been benefitting it to be successful in its platform business processes. The report equally states the factors that are very effective in the platform businesses to progress further in the market structure of the present scenario.

Running head: EMERGENCE OF PLATFORM BUSINESSES
Emergence of Platform Businesses
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1EMERGENCE OF PLATFORM BUSINESSES
Executive Summary:
The aim of the report is to evaluate the progressive nature of online platform business, namely
Uber in the world market where it has been able to attain the leading position. The report delves
into the introduction of the company forecasting its operational motives and success throughout
the years. The report elevates the value of the brand and simultaneously connotes to the various
factors that have been benefitting it to be successful in its platform business processes. The
report equally states the factors that are very effective in the platform businesses to progress
further in the market structure of the present scenario. It also depicts the challenges faced by the
online business that serve to be threatening for the company and also provide recommendation to
it. The report finally connotes that though Uber has been subjected to various challenges, it has
the potential to implement measures and operate in the global market with greater consideration
to the key factors that have been enabling it to succeed and proceed with its business operations.

2EMERGENCE OF PLATFORM BUSINESSES
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Key factors for online platform strategy......................................................................................3
Factors application by Uber.........................................................................................................4
Key challenges.............................................................................................................................5
Recommendation.........................................................................................................................6
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

3EMERGENCE OF PLATFORM BUSINESSES
Introduction:
Uber is a popular transportation service on demand that is considered to have brought a
revolution in the industry of transportation or taxi, to be precise all around the world. Founded
by Travis Kalanick and Garrett Camp, the service has spread rapidly all over the world, with its
headquarters in San Fransisco (Uber.com, 2018). Formerky known as Uber Cab Inc., the
company changed its name to Uber Technologies, Inc. that has an engineering center in
Bangalore, India with a regional office in Singapore. The business model has brought into a
simple technology through which people simply use their smart phone and gets the cab arrived at
their desired location. In the seven years, the company has been able to occupy the position of
being the world’s biggest logistics company. The value of the company has been assessed to be
over $70 Billion and the company is widespread in about more than 630 cities worldwide
(Uber.com, 2018). The company has more than 50 Million users and about 7 million registered
drivers that together account to trips of nearly 1 million per day (Uber.com, 2018). However,
there is high competition along with the high growth of the company. The company has a fleet of
its owned cars; however, it has multiple collaborations with car and vehicles manufacturing
companies as well. The company has also initiated driving schools for good driving skills.
However, with all the progress that the company has been showing, it is not free of stiff
competition from several such companies in the industry.
Discussion:
Key factors for online platform strategy:
Various factors play the key role that must be considered by firms to develop their own
online platform strategy in order to accelerate their performance. Some of these factors are
discussed as follows:
Promoting facilitation-
The trend of centralizing people and resources is a common concept that rendered
maximum efficiency. Lack of flexibility connotes to the downside of decentralizing that led to
slow progression of the industries. The existing processes become so slow due to the rapid
inventorial investments that it needs better strategy to accelerate progress. In case of the taxi
industry, the platforms can switch from investing on and owning their own vehicles and connect
with the private owners of existing properties (Libert, Wind and Fenley 2014). The properties of
these private owners that could be rented out to the people in need to rent would suffice the need
of having the property by the companies (Cramer and Krueger 2016). Thus, the platform could
act as an intermediary who would have a client base and the non-capital intensive strategy of the
platform could effectively grow. The only and major concern in employing this factor is the need
to have the two sides. The companies could only work as an exponential intermediary when it
has the equal demand and supply.

4EMERGENCE OF PLATFORM BUSINESSES
Focusing on creating convenience-
One of the key factors for the development of online platforms is to create convenience
for both the supplier and the users. With the greater integration of services in the online apps,
processes are becoming simpler and convenient. Every online platform must be entitled to look
into the future (Bond 2014). Moreover, along with convenience, the companies must be able to
retain the trust of the clients. Growth and development must not be hindering the privacy of the
customers that would otherwise lead to a collapse of the companies performing online. Thus,
these platforms must be engaged in finding ways to serve the customers in a proactive way.
Diverging from the niche markets-
Another important factor that leads to a development of the online platforms is to cross
the boundaries of their own markets and consider all-in-one solutions. They must be embracing
the opportunities to serve the customers in varying ways, not restricting themselves to a
particular service. With multiple services, the companies become able to expand their own
market. This does not leave much space for competition enabling the companies to function
smoothly and incur greater profits.
Optimal use of the newest technologies-
The firms’ use of newest technology must be optimal in order to sustain the trust that they
have achieved from users and progress slowly but steadily. In every business processes, along
with the rapid technological advancement, sharing has always been an effective process. With
the reviews of the customers and their reputation scores that the companies can collect, there
would be greater convenience, which would promote rapid increase in the usage of the services.
Considering the taxi industry, people who failed to get a cab can now get it within the ascribed
time with just few taps on the smart phones (Wyman 2017). Thus, with the use of technology
and algorithms, processes need to be simplified making them self managing and beneficial for
all.
Factors application by Uber:
Considering the various factors that have been discussed, the involvement of the factors
by Uber has been portrayed in the following-
Uber in facilitation-
Uber, recognized as the largest taxi company primarily did not own any vehicles. In
present times, the company is indulging in owning its own vehicles. Thus, even having no
vehicles, Uber has acquired the top position in the taxi industry (Leighton 2016). It did not invest
in property and acted as the intermediary connecting the two sides of the service. It has been
doing a smart job governing the deployment of the drivers by using dynamic tariffs. When it
manifests that the demand surpasses the supply, the fares are raised. People in that case opt for
the cabs being in need and this also motivate the drivers to start their car. However, with the

5EMERGENCE OF PLATFORM BUSINESSES
increase in price, the clients get demotivated (Chen 2018). This leads to a fall in demand and
thus an immediate balance is restored. Thus, Uber sets up the service as a platform that leads to
its greater progress and profits as well.
Creating convenience for users-
Uber has been looking ahead to the future. The Uber app links to the agenda and registers
the daily rhythm, giving suggestions to book a taxi at the right time (Wallsten 2015). The app
also guarantees the privacy of the customers that has enabled it to gain the trust of its people. It is
also possible for the clients to order the Uber cabs from Google Maps and gtrack its location.
Thus, it has been a very convenient app for the customers over time.
Uber, the logistic platform-
Uber is not a taxi company as t is generally considered. Uber has started delivering food
with the well-known app UberEats expanding its business. It is presently involved in developing
platform for self-driving trucks and cars (Smith 2016). Thus, it has been embracing newer
opportunities to expand its marketing industry rapidly.
Uber’s efficient use of technology-
Clients feel very comfortable to use Uber cabs since it includes only three tabs on the
phones. Most of the operations are automated and with the matching of the algorithm between
the driver and the client, the service is in process. After the end of the ride, the rating also helps
to filter out the performances of the drivers and the asocial clients. The process of online
payment with credit cards also acts to be very convenient for the users (Farris et al. 2013).
Key challenges:
Being an online platform, the two major challenges faced by Uber are-
1. Customer retention and switching brands-
With the rise in competition, people are getting greater access to multiple other options.
Thus, in case of price and time of approach, the people can easily compare Uber with the other
apps such as Shebah, Ola Cabs, Lyft, GoCatch and others and prefer the cabs accordingly
(Davidson and Fischer 2015). Thus, it becomes difficult for Uber to retain customers and drivers
for itself who has various alternatives as well in the market.
2. Unclear government regulations-
Another major challenge for Uber is the unclear regulations. There has been a point of
disagreement between the cab aggregators and government regulators who are not able to
determine the legal status of Uber. They are in confusion whether Uber should be considered a
conventional taxi company or IT company. Thus, the company lacks proper government
regulation that affects its business to a certain extent.
Recommendation:

6EMERGENCE OF PLATFORM BUSINESSES
Considering the retention of customers and brand switching, Uber can integrate methods
that would benefit the customers in a way so that they do not deviate from the brand. along with
monetary advantage as compared to the other brands, Uber can also focus on membership
schemes that would enable it to have the fixed customers. It can also include more services such
as waiting in case the people are attending any functions for which it could charge some money,
and outstation services that would enable the company to incur more profits. The company can
also provide benefits to the drivers by giving them incentives in case they take more rides would
altogether enable the company to retain its customers and drivers, enabling it to be progressive in
the long term and retaining its position as the leading cab service in the industry.
Conclusion:
From the report, it can be concluded that Uber has been effectively designing tools and
methods to retain its leading position as the online logistics company. It has various challenges
and threats that serve as major concern for the company, however, with the significant use of
technology and various other factors, Uber has been able to prosper and progress with its
functions to evolve as a reputed and preferred brand all over the world. Various factors promote
better performance of the online platform business and Uber has been considerate to those
factors that have led to its greater evolution and progress with time. It has been accepted
worldwide and has been able to acquire profit and fame in an extraordinary way in the global
market.

7EMERGENCE OF PLATFORM BUSINESSES
References:
Bond, A.T., 2014. An app for that: Local governments and the rise of the sharing
economy. Notre Dame L. Rev. Online, 90, p.77.
Chen, J.Y., 2018. Technologies of Control, Communication, and Calculation: Taxi Drivers’
Labour in the Platform Economy. In Humans and Machines at Work (pp. 231-252). Palgrave
Macmillan, Cham.
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.
Davidson, A. and Fischer, L.A., 2015. (Re) Producing Transport Systems: Uber, Driverless
Technology, and the Modern City (No. 15-5395).
Farris, P., Yemen, G., Weiler, V. and Ailawadi, K.L., (2013) Uber Pricing Strategies and
Marketing Communications.
Leighton, P., 2016. Professional self-employment, new power and the sharing economy: Some
cautionary tales from Uber. Journal of Management & Organization, 22(6), pp.859-874.
Libert, B., Wind, Y. and Fenley, M., 2014. What Airbnb, Uber, and Alibaba have in
common. Harvard business review, 11.
Smith, J.W., 2016. The uber-all economy of the future. The Independent Review, 20(3), pp.383-
390.
Uber.com. (2018). Drive With Uber In Australia | Make Money On Your Schedule | Uber.
[online] Available at: https://www.uber.com/en-AU/drive/ [Accessed 4 Apr. 2018].
Wallsten, S., 2015. The competitive effects of the sharing economy: how is Uber changing
taxis. Technology Policy Institute, 22.
Wyman, K.M., 2017. Taxi regulation in the age of Uber. NYUJ Legis. & Pub. Pol'y, 20, p.1.