Research in Business Report 2022

Running head: RESEARCH IN BUSINESS
PAGE \* MERGEFORMAT 1
Research in Business
Student’s Name
Affiliation
Date

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Contents
Introduction......................................................................................................................................3
Problem Statement...........................................................................................................................4
Research aim and objectives............................................................................................................5
Justification of the project...............................................................................................................5
Potential research output..................................................................................................................6
Conceptual framework.....................................................................................................................8
Price and Safety...........................................................................................................................8
Hypothesis 1.............................................................................................................................9
Hypothesis 2.............................................................................................................................9
Convenience...............................................................................................................................10
Hypothesis 3...........................................................................................................................10
Accessibility...............................................................................................................................10
Hypothesis 4...........................................................................................................................11
Methodology..................................................................................................................................11
In-depth literature review...........................................................................................................11
Qualitative and quantitative data................................................................................................11
Sampling and questionnaires.....................................................................................................12
Organization of the study...............................................................................................................13

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Project budget and budget justification.........................................................................................13
Summary of the Estimated Budget............................................................................................14
Gantt chart.....................................................................................................................................14
References......................................................................................................................................16

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Project title: Why Uber has been unable to make a profit since its establishment"?
Introduction
Uber Technologies Inc is an American based multinational transport network Company
which deals in numerous services including food delivery, bicycle sharing system, and ride
service hailing (Isaac, & Picker, 2015). The Company's headquarters are located in San
Francisco and Uber operates in over 785 metropolitan areas in the world (Blystone, 2015). The
company also has numerous mobile applications and websites where different people access its
respective service (Deamicis, 2015). However, Uber's journey of entrepreneurship has been an
extraordinary one (Meelen & Frenken, 2015). For the past years of operation, the company has
reported huge losses on money unlike any other venture across the world. In the year 2017, Uber
reported a loss of about $1.5 billion as its third quarterly loss. Such huge losses to a company
like Uber are definitely unsustainable and therefore they call for an analysis why the company
has not been able to make any profits since its operation. In the year 2018, the Uber Company
lost around 3.0 billion as an amount of $11.2 billion of the company was tied in revenue.
Moreover, the company has a great capability of dodging normal costs as far as tax services are
concerned (McAlone, 2015). In addition to the above, some researchers discuss that the Uber
Company has a poor business model. Different myriad stories have come up that it is very
discomforting to be a driver in the Uber Company. The report made in the year 2017 revealed
that the Uber Company was able to retain only 4% of its respective drivers as far as such a
financial year was concerned (Dillet, 2013). Therefore, the Uber Company had to recruit on a
constant basis given its rate of employee turnover in the company. Putting into consideration the
issues discussed above, this research paper therefore focuses on establishing why Uber has been
unable to make profits since its establishment.

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Problem Statement
Uber’s seven-year journey has not been easy. Despite the unprecedented growth over the years ],
it has been faced with huge losses and lawsuits. For example, in 2017, the company reported a
loss of nearly 3.2 billion US dollars (Dudley, Banister &Schwanen, 2017). Much of the
predicaments experienced by Uber have been largely due to illegal corporate behavior and
numerous unethical practices. The business model of the company is largely broken, following
the recent court ruling in the UK that acknowledged Uber drivers as employees and not
freelancers (Pal & Clark, 2015). This ruling has dealt a major blow to Uber (Kim, Baek& Lee,
2018). Over the years, the company has structured its business model under the gig economy
framework to prevent it from incurring the costs of maintaining the employees (Molla, 2019).
The drivers were viewed as mini-entrepreneurs who operated their taxi business under the
facilitation of Uber( Kosoff, 2015).
Those who support the business model of Uber often emphasize the unfulfilled potential, asset-
light business models, and string network effects as key factors that will propel Uber
international growth ("Why Can't Uber Make Money?” 2019). However, not one of these factors
can revert the fundamental weakness that Uber is facing in its business model (Smith, 2016).
Many analysts forecasted that Uber would enjoy global market due to the large network size and
outsized balance sheets (Edelman & Geradin, 2015). However, most of the network effects have
been mostly local and not global. For instance, Uber enjoys a market share of 89 percent in
Tampa but there is a huge contrast in Portland where the market share is below 50 percent
(Cannon & Summers, 2014). Uber has largely struggled to establish a market share in many
established economies such as China, Asia, and India (Che, 2015). These low figures are
characterized by low switching cost between the rival ride-sharing platforms such as Lyft

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(Kornberger, Leixnering, Meyer & Höllerer, 2018). The purpose of this research is to establish
the causes of Uber failure and recommend appropriate strategies to remedy the situation.
Research aim and objectives
The aim of this study is to understand the business model used by uber in its global operations.
The main objectives include:
• To determine the business model that Uber has been using in its global market
• To explore and identify issue as to why there is low switching cost among rival ridesharing
service providers
• Explore the attitudes and feelings of the consumers and the drivers towards the services
provided by uber
• To identify appropriate strategies that can be used to mitigate the situation facing Uber
Justification of the project
Given the different issues presented in this research study’s problem statement, it is obvious that
Uber's operations are not at its best. This research study provides important insights as far as the
Uber business model is concerned including the different issues that hinder the company's
growth and its ability to make profits. More so, Uber's business model is associated with
numerous weaknesses as described in the problem statement and therefore there is need for
research in order to understand better the main causes of such weaknesses including the way they
block the growth of the company. Moreover, it is obvious that very little research has been
directed towards remedying Uber's situation for the past years of its operations. This research
project proposal will allow a detailed and focused look into the different issues affecting Uber

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and therefore providing the Company with another opportunity of growth and survival in today's
competitive world. This research project will therefore look into the different causes of the
weaknesses highlighted as far as Uber's case is concerned and therefore give recommendations
for the different highly appropriate strategies, which can be adopted in remedying Uber's
situation.
Under the different issues highlighted as far as Uber's case is concerned, this research proposal is
associated with the following benefits.
 This research proposal will allow discussion into the different business ventures and
practices of the Uber Company hence suggesting new and better strategies towards
mitigating such issues.
 This research proposal will provide important results, which will help Uber managers to
understand the feelings and attitudes of customers towards their respective services hence
enabling them to make necessary changes to suit their clients' tastes and preferences.
 The Uber business managers can employ the strategies presented in this research to come
up with a better business model that can help the company operate in profits.
 This research proposal will provide important results, which will be of great use to policy
makers, researchers, and different business owners across the world
 This research proposal will be of great relevance to different start-ups or new ventures in
line with Uber's line of business since they will be able to understand better the reasons
for limited profitability in such a business. Therefore, such startups will adopt better
strategies and approaches to avoid falling in victims to Uber's mistakes.
Potential research output

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The outcomes of this research study will provide a highly analytical framework for the
investigation of the different reasons why the Uber Company has up to now been unable to make
profits from its respective ventures since its establishment. These results will therefore help the
concerned parties develop and analyze that current business model of the Uber Company
including the ways in which such a model can be modified to enable the company make huge
profits from its respective operations. Irrespective of the fact that various variations current
issues that affect the company's ability to make profits, this research output will help in the
understanding and the provision of a bigger picture into the sources of issues affecting the
profitability of Uber Company. More so, these results will allow a comparison between the Uber
Company's business model and the business models used by different successful companies
across the world hence providing Uber with an opportunity to make necessary adjustments for its
betterment. The ability of Uber Company to make profits from its respective ventures is affected
by different factors including the company's business model, the quality of the services provided,
and the customer care of its employees, the company's rate of employee turnover, and many
others (Hall et-al, 2017). All such factors are likely to affect this research study's results
concerning the company's profitability situation. As far as this research is concerned, all the
different objectives mentioned in this research proposal will be answered in accordance to the
data collected, the research findings, and the analysis conducted. All the outputs or outcomes of
this research study will be talked as highly fundamental academic work for the issue of Uber's
failure to make profits since its establishment, which this research proposal identifies. More so,
this research study will provide important insights to future business investors or owners in
Uber's line of business to ensure that their business ventures are profitable before embarking into
such business lines. Particularly, the outcomes of this study will help decision makers and other

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concerned parties in the Uber Company to understand better the reasons for the company's
continued operation without making any profits hence their ability to make suitable changes to
allow the Company makes profits from its respective business ventures.
Conceptual framework
The figure presented below provides Uber's contextual framework as far as the intentions of
different customers make use of Uber's services hence allowing the company to make profits
from their respective ventures is concerned. This framework proposes external factors affecting
Uber's profitability, the influence of the company's prices on its profitability as well as the
accessibility and convenience of the company's services.
Price and Safety
The transport rates that every city charges differ from time to time. Normal taxi fares that other
companies charge are always higher when compared to the fares that Uber charges (Rempel,
2016).Gabel (2016) in his research discussed that the Uber ride rates are always less than the
ones of a normal taxi fare even in the times when the demand periods are higher than before.
Uber continues to employ the technique of surge pricing in seasons when its services are at a
very high demand (Angrist et-al, 2017). Surge pricing is also associated with its own
repercussions as far s the company's services are concerned. A study conducted on Uber by

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Partner and Legal (2015) revealed that in comparison to the traditional taxi fares, Urban taxi
rates are fair. Therefore, different individuals end up travelling at the same time in order to
ensure that their costs of fares are reduced and therefore such individuals are likely to consider
the prices that different transport organizations offer for their respective services (Rao, 2015).
Uber Company often offers lower pricing rates in comparison to the rates that other taxi
organizations offer and therefore it becomes a better choice for most people (Eidelson, 2014).
However, such low prices leave the company with limited profits for their respective services
hence contributing to the company's failure to make profits in its respective services.
As far as the concept of safety is concerned, the Uber Company has invested a lot of money in
ensuring that the safety of its respective customers is guaranteed. Safety inspection is known to
attract very many people to the services provided by Uber. The company sets rules and
regulations concerning safety and all their respective drivers are subjected to driver examinations
before they are hired. Research by Brazil and Kirk (2016) revealed that the manner in which
Uber conducts its respective services helps in the reduction of the rates of drunk driving related
accidents. Moreover, safety is further guaranteed through the payment mode since the company's
customers have an option to pay by a bankcard or by cash. The credit card mode of payment is
safer than the cash payment. Such services imply that Uber invests a lot in ensuring the safety of
its clients. However, the company ought to understand that such investments have direct
implications to the company's profitability in a long run.
Hypothesis 1: Uber prices have a significant influence on the profitability of the company
Hypothesis 2: Uber’s customer safety strategies have a significant influence on the profitability
of the company.

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Convenience
Today, Uber services have been highlighted in most research works as potential causes of traffic
congestion in different cities. Irrespective of the fact that different researchers have come up to
conducted investigations concerning the issue, there is a lot of uncertainty surrounding the results
obtained. Research by Li, Hong, and Zhang (2016)revealed that Uber's entry into different urban
areas resulted into the substantial reduction in traffic jam and carbon dioxide releases in the
atmosphere. Alley(2016) further discusses that the Uber services help different people to easily
access specific travel destinations in the Urban areas across the world. Carazan, Chow, Pham,
Roswell, & Sun, (2016) research further confirmed that Uber service not only saves the many of
its respective users but also the time of its respective clients. However, it should be out into
consideration that Uber's ability to offer timely and more convenient services is associated with
higher operation costs. Moreover, Uber incurs higher costs of operation in ensuring their
customers find their respective services more convenient than their competitors hence living the
company with less profit. This research study therefore proposes the hypothesis below;
Hypothesis 3: Uber’s customer convenience strategies have a significant influence in the overall
profitability of the company.
Accessibility
Uber Company provides the most popular rideshare application, which helps the company with
both its referral and transportation services (Woo & Bales 2016). Geradin (2015) research
revealed that the Uber app is greatly user friendly and it allows the company to make
transmissions of information concerning the location of their cars, and allows the customer to
track such a car's ongoing progress using a Smartphone (Wallsten, 2015). Such evidence
confirms that the company has employed a lot of technology in ensuring that their customers are

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provided with the best services there can be. However, the company incurs many expenses in
maintaining such high technology services hence minimizing their respective profits
(Etherington, 2014).
Hypothesis 4: Uber’s strategies of improving the accessibility of its services to customers have a
significant influence on the profitability of the company.
Methodology
For addressing the outlined objectives, the following methodology is established
In-depth literature review
This is aimed at developing a clear understanding of the topic of the study by researching
relevant thematic areas that are affecting the business models of Uber. The literature review
should focus on such themes as the business model used by Uber, the competitors in the ride-
sharing industry, the number of countries uber operates and the rate of payment suggested by
Uber (Gabel, 2016). As far as this method is concerned, all relevant information and literature
obtained from different research study sources will be studied and analyzed. The literature
review will include customer reviews, online articles and newspaper extracts, peer-reviewed
journals and journals from related stakeholders.
Qualitative and quantitative data
The study will review data in the seven-year period since the inception of Uber. It will focus on
the number of drivers using the Uber-platform, the financial analysis of Uber operations and
additionally sought customer ratings on using the app.
In addition to the above, both the qualitative and the quantitative methods of analyzing data will
be sued in this research study. As far as the qualitative kind of analysis is concerned, surveys and

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online forums will be employed. Qualitative form of data analysis will on the other hand employ
the use of pie charts, figures; excel sheets, statistical and mathematical methods. Descriptive
statistics method will be employed as a main technique for the analysis if quantitative data.
Furthermore, hypothesis testing will be used and it will put into consideration the likelihood of
different types of errors particularly the Type I and the type II errors. As far as the analysis of the
qualitative data is concerned, different literature related concepts would be employed by the
researcher to help in the examination of the study results obtained through the surveys
conducted.
Therefore, this research paper will make use of a mixture of methods in order to ensure that the
results obtained are accurate and therefore provide correct insights as far as the financial
situation of Uber is concerned. From the in-depth study of literature and the different outcomes
obtained through other research methods such as the questionnaire method, the data obtained will
later be grouped into different categories. Such data will later be analyzed using the methods
explained above and then presented.
Sampling and questionnaires
Since Uber operates globally, it would not be possible to question all its operators. The study will
use stratified sampling, select a group of stakeholders from different countries, and administer
the questionnaires to them. This group will represent the views of the whole stakeholders in their
chosen locality. Stratified sampling is used in order to come up with a random sample group
from the strata and prevent biasness. The questionnaires will be administered anonymously to
protect the privacy of the participants.

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Questionnaires will be prepared and distributed among different study participants as far as this
research is concerned. The researcher will first seek the consent of the different participants
before including them in this study. The questionnaires will be provided to different groups of
participants including the Uber employees, the Uber managers, and their respective customers.
Questionnaire will be designed in a way that they will cover different questionnaires that reveal
important insights concerning the reasons for the continued operation of the Uber Company
without profits since its establishment. 15 items will be used in this research study and
participants will be requested to provide answers for all the items provided in order to ensure
effective data analysis. Data obtained through such questionnaire will be grouped for further
analysis of the research topic.
Organization of the study
This research study will be organized in such a manner:
 Chapter One will be the project's research proposal as it is described in this assignment
 Chapter Two will focus on the description of the Uber case as far as its profitability
condition is concerned
 Chapter Three will provide important details concerning the methodology of the research
study. This section will cover the literature review of the study, the data collection
methods, and the data analysis methods.
 Chapter Four will focus on reporting the different findings obtained in this research.
More so, this chapter will include an analysis of the findings obtained through the study's
research

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 Chapter Five will focus on the summary of the main findings revealed through the
research study. More so, this chapter will provide a discussion of the implications of the
study to Uber Company as far as its issue of lack of profitability is concerned.
Project budget and budget justification
The budget anticipated for this proposed research is around $6000 if the project is to be
completed within its allocated period that is 30 October 2019 as presented in the Gantt chart
below.
The following are the specifications of the budget of this research:
The Literature Review of this study will require the use of different resources such as journal
articles, online resources, textbooks and many other resources. Such resources will costs a total
of $2000
Data Collection as far as this research study is concerned will take the form of questionnaires and
surveys including expenses incurred in travelling and mailing different participants. More so,
expenses will be incurred in moving from place to place in order to convince different
individuals to participate in the study. Such activities will cost around $3000
Data analysis in this study will involve accessing different analysis tools such as tables, Uber
financial reports, government figures, and charts. Therefore, some funds ought to be allocated to
the analysis of data. Data analysis is estimated to cost around $1000
Summary of the Estimated Budget
Purpose Estimated Amount to be Spent
Literature Review $2000

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Data Collection $3000
Data Analysis $1000
Total Estimated Budget $4000
Gantt chart
 The following table shows the project’s timeline.
Task to be
done
Start Day End Day Duration
(Days)
Proposal of the project 01/06/2019 30/06/2019 30
Review of literature 01/07/2019 30/07/2019 30
Collection of data 01/08/2019 30/08/2019 30
Analysis of data 01/09/2019 30/09/2019 30
Final Submission of the
report
01/10/2019 30/10/2019 30
Milestone and Variables
2019 201
9
2019 201
9
201
9
June July August Sept Oct
1 Proposal of the project
3 Review of the literature
3 Collection of Data
4 Analysis of data
5 Final submission of the report

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