Socio-economic and Legal Assessment Report of Uber: Detailed Analysis

This report provides a comprehensive socio-economic and legal assessment of Uber, examining its business model, market dynamics, and regulatory environment. It begins with an executive summary outlining the key findings, followed by an introduction that establishes the report's focus on the impact of socio-economic and legal factors on Uber's business. A literature review explores existing research on Uber's business model, the sharing economy, and the impact of disruptive technologies. The report analyzes the impact of the legal framework and political factors, including anti-trust laws and economic growth, on Uber's operations. The report also considers the socio-economic trends influencing Uber's business, such as the increasing reliance on app-based services and changing consumer preferences. The report concludes with recommendations for the long-term sustainability of the firm, based on the analysis of the different aspects of Uber's business model. The report is structured to provide a detailed overview of Uber's operations and the factors that affect its success.

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Socio-economic and Legal Assessment Report of Uber
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1Socio-economic and Legal Assessment Report of Uber
Executive Summary
This socio-economic and legal assessment report studied the case of Uber and analysed the
business model of the company. It has been found that the company is majorly based on the
concept of sharing economy. The company was founded in 2009 and started its mobile
application based cab booking service. It is the first of its kind and has been quite successful. The
report studied and found the major drivers of the business of Uber. The socio-economic changes
and technological changes are the main factors that boosted the growth of Uber. The inclination
of people towards collaborative consumption has also supported the growth of Uber. The concept
of sharing economy is clear to the people now and they understand that it reduces their cost of
travel and thus Uber has expanded and has the largest market share. The disruptive technologies
such as internet on mobile and location sharing via mobile are the basis of the organizations
business and the improvement in this areas has helped the organization to grow. However, there
has been many criticisms against Uber as it worse off the condition of traditional taxi drivers but
the benefit it provides by reducing the cost of the sector is a commendable task. Efficient
resource allocation and utilization are additional benefits provided by the organization. The
political factors such as industry rules and regulation has significant impact on Uber. The
business model of Uber has sustained only due to the sharing economy. Therefore, the report
found the different aspects of the business model of Uber and thereby recommends strategies for
long term sustainability of the firm.

2Socio-economic and Legal Assessment Report of Uber
Table of Contents
Introduction......................................................................................................................................3
Literature review..............................................................................................................................4
Impact of legal framework and political factors............................................................................10
Conclusion and recommendation..................................................................................................13
Reference List................................................................................................................................16

3Socio-economic and Legal Assessment Report of Uber
Introduction
The report focuses on the study of app cab giant Uber. In this study report the main
aspect that shall be covered are socio-economic and the legal areas that affect the concerned
industry and thereby the concerned company. The full name of Uber is Uber Technologies, Inc.
and the company started its business first with the peer to peer ride sharing services. Currently, it
is the largest app cab service provider in the World. It was founded in 2009 by Garrett Camp and
Travis Kalanick. The socio-economic problem of the hiring a private cab driver at high price
(Acheampong et al. 2018). The objective of the company was to reduce the cost of riding by
sharing the cab service with another person. The company does not only solved the problem of
high price for cabs but also reduced the problem of unavailability of cabs during urgent hours.
Thus, the company solved the problem improper resource allocation in the cab industry largely.
It has not stopped there with the cab service only. With change of time and innovation in the
technological area and the change in habit and demands of the people, the company has come up
with other services as well and met new demands of the people addressing the socio-economic
change. The company has introduced new services under its new subsidiaries such as Uber Eats
and Jump Bikes (Shaikh and Sia 2018). It has also acquired Careem a Dubai based app cab
company that serves the countries in Middle East, South Asia and Africa. Therefore, it can be
seen that Uber has always been eager to respond to the socio-economic changes. Uber eats is a
food delivery service app using which people can order food of their choice from nearby
restaurants. On the other hand, Jump Bikes are the electric bike rental service mostly popular in
the United States, France, Canada, Portugal, Germany and Mexico. Therefore, it can be observed
that Uber has taken all its steps addressing the socio-economic trends. The trends that affecting
the business of Uber are people’s dependence on outside dependence on restaurant food,

4Socio-economic and Legal Assessment Report of Uber
increased rate of availing cabs even for shorter trips, awareness for environment pollution. In
addition to that people’s tendency towards liking pick and drop facility at door service, cost
cutting attitude, prefer travelling in group than alone due to safety purposes and other socio-
economic service that affect the safety and financial status of people (Kim, Baek and Lee 2018).
Therefore, the report discusses the above mentioned socio-economic trends in detail.
Additionally, the report makes literature review to put light on the key issues and current
company concepts that are affected by the social, economic and technological changes. Apart
from that, the report puts emphasis on the legal and political aspects that the impact the business
of Uber. Under legal aspect, special focus is being given on anti-trust laws and under political
factors economic growth has been considered in this report.
Literature review
Brishen Rogers has emphasized on one of the major issues and that is social cost that the
app cab service providing company imposes on the nations it is doing business. The first social
impact made by the company is on the car hire sector. The car hire sector was highly fragmented
and cost of getting cab, waiting for cabs and gap of the communication between the passengers
and cab drivers are the main problems in the sector that Uber reduced by addressing these
problems (Hou 2018). The company has integrated the sector both vertically and horizontally.
This integration of the industry has reduced the cost of the sector and thus it helped to reduce the
fare of the cab service. The benefit of it is extended to the passengers as they are able to enjoy
the same service at a much lower cost and along with that, the waiting time for cab has reduced
by significant amount. The multiple options for payment system such as debit card, credit card,
app wallet and cash has made it much easier for the passengers to avail the cab service (Alvarez
and Argente 2019). However, apart from these benefits there are harmful effect of advent of

5Socio-economic and Legal Assessment Report of Uber
business of Uber. Starting from its foundation day the company has grew manifolds. The worth
of Uber business was $40 billion in 2015 as per the article (Rogers 2015). It had become the
largest cab service providing company in the US. The major negative impact of this has on the
individual cab drivers who lost the business gradually going out of business. For survival, they
are left with only one option of becoming a driver of Uber cabs. The main allegation that is being
imposed upon Uber is that it is not going by any specific fare charge. It is charging well below
the market standard charge of normal private cabs. Apart that it is discriminating customers by
charging different fares to different passengers. Including these issues there are no fixed pay for
the drivers and along with that there are not health polices for the drivers (Agarwal 2019).
Therefore, even though passengers are benefitting from low prices during normal hours but
during peak hours they are paying more than market standard. These are all the visible issues that
are directly related to Uber service but the most important issue from the passengers end is that
the company is storing the bank card details of the passengers which is not legal and apart from
that, it is unethical also. Due to this, the passengers are financially under threat of monetary loss
if the servers of Uber are being hacked and in that case, it is unclear who is to be held
accountable for such incidence. Hence, it is evident that with many beneficial effect Uber comes
with significant disadvantages. It is argued that by using the above mentioned strategy Uber is
trying to capture whole market and eventually become a monopoly company in the cab sector
(Gabel 2016). Therefore, it is possible that the low fare price situation in the cab industry will
possibly change in the future when passengers have to pay high for taking service from Uber as
there will be no option left to the passengers to choose from since Uber has captured all of
market share by then.

6Socio-economic and Legal Assessment Report of Uber
Uber is company based on the concept of sharing economy. Sharing economy is the
business concept that has brought disruption in the industry. As per the article in 2013, the total
worth of the sharing economy was $26 billion and it would reach over $110 billion in the
succeeding years (Cannon and Summers 2014). Airbnb is the most known sharing economy
company during the initial days of sharing economy concept. The sharing economy companies
challenged the traditional mode of business that are regulated by government rules. For example,
in the case of Uber it can be observed that the company is charging different types of fare to
different passengers. It has also cut the cost of the industry it operates in and thus charges lower
price than the traditional mode of the business entities. Therefore, the private taxi drivers were
worse off by the entry of Uber in the industry (Angrist, Caldwell and Hall 2017). Thus, the
government tried to regulate the company any many ways in order to save its traditional form of
transport business from the disruption created by Uber (Hampshire et al. 2017). In fact, in
Pennsylvania the government put cease and desist order on the app cab service providing
companies like Uber and Lyft. Consequently, Uber was fined $1000 per day and in addition to
that, the drivers were charged for criminal activities. Therefore, the government was initially
unable to understand the concept of sharing economy and its benefits (Edelman 2015).
Moreover, concept of sharing economy emerged with the changing preference of economic
status of the people. Thus, in order to make the sharing economy companies successful it is
necessary to make understand the government about the benefits of sharing economy (Shapiro
2018). In order to achieve this objective Uber and similar companies need to make study report
of the change happening in society and economy and along with that how the technological
innovation occurred in the recent times could benefit the socio-economic condition of a country
(Baron 2018). The reports on cost effectiveness, reduction in congestion on road due to fall in

7Socio-economic and Legal Assessment Report of Uber
private vehicles use and thereby fall in total environmental pollution would be sufficient to
convince the government to remove any king of stringent regulation on the sharing economy
companies. Therefore, in the article the author has emphasized upon the change that sharing
economy companies like Uber would bring in and better off the economy as a whole.
Uber has brought disruption in the taxi industry that has been based on the technology
innovated in 1940’s until Uber and Lyft entered the industry. Alternatively, Uber is based on the
new technology of communication between the drivers and passengers that efficiently competes
the matching process (Zhu 2016). On the other hand, the strategy of surge pricing helps in
achieving efficient supply and demand equilibrium. These are possible because of the technology
used by the Uber. The innovation of smart phone and internet is the base of the business model
of Uber. The large scale economies present in Uber is another reason of the success of the
company. On the other hand, the regulation policy of the traditional taxi business is inefficient
and cost is significantly high. Thus, it is not possible for them to compete with Uber (Laurell and
Sandström 2016). People are getting more adoptive with the new technology and the gradually
taking the advantage of it as it allows better time management and cost effectiveness. Thus,
society is inclining towards the technology based services even for taxis. This change in society
is the major cause of success of Uber and similar kind of companies. Uber is more efficient in
capacity utilization than the traditional taxis (Wyman 2017). The problem with the traditional
taxis has been the licensing policy that restrict them from operating in a large area. Due to this
reason, even if there is sufficient amount of taxis available there has been significant mismatch
between supply and demand. However, solves this problem and thus the growth of Uber has
been due to all the reason mentioned above.

8Socio-economic and Legal Assessment Report of Uber
With the increase of use of smart devices especially the smart phones and the availability
of cheap internet connections the preferences of people has changed a lot and that allows the rise
of the sharing economy. Therefore, the time is favourable for expansion of business of Uber.
However, the article by Christoph Mittendorf focuses on the issue of trust in the sharing
economy considering the taxi business of Uber. The concern of trust is raised in the article
because the matching of passengers and drivers are done completely based on the smart phone
applications using internet communication mode (Want, Schilit and Jenson 2015). Thus, no
physical interaction is done before matching and thus no one be it driver or passenger get the
chance of making the choice. Thus, it is hard to know about the intentions of the driver or the
passenger. However, it has been observed that the business of sharing taxi service is increasing
gradually. It means that Uber stating its policy and terms and conditions to the passenger has
successfully gained their trust (Pratt et al. 2019). The passengers rely on the driver recruiting
process of the Uber and their service and thus relationship of trust between the passenger and
Uber is the actual reason behind the success of Uber. The business model of Uber is highly
influenced by the passenger preferences and intentions and based on that the company has made
its policies transparent regarding location sharing, security support and matching (Mittendorf,
2017). Therefore, it can be thus observed that people are nowadays trusting the internet based
transactions and interactions more than before. Rather it can be supported by the increase of use
of social media where people get in touch with strangers and interact freely (Kang, Feinberg and
Papalambros 2017). Therefore, it has changed the preferences of people and thereby the
passengers’ preferences has changed a lot. Hence, Uber has benefitted from it business model it
prepared based on the socio-economic and technological changes.

9Socio-economic and Legal Assessment Report of Uber
The article discussed about the collaborative consumption that is trending and gradually
increasing with time. The emergence of collaborative consumption took the pace with the
development and innovation in the information and communication technologies (Hamari, J.,
Sjöklint, M. and Ukkonen 2016). This change in consumption preference in the society and
economy has supported the business model of sharing economy. There are various benefits of
collaborative consumption that include reduction of cost, efficient utilization of resources,
allocative efficiency, utility maximization, less environmental pollution and low economic cost
(Calo and Rosenblat 2017). Thus, it increases the benefit of the economy and thus overall
welfare of the economy. It is thus evident that these benefits are the main driver of collaborative
consumption in the economy. It has been observed that above reasons also reduces the price of
the products or services that people consumes. Thus, fall in price makes the consumption cheaper
and it is achieved by collaborative consumption. The most popular and acclaimed example of
this collaborative consumption is Uber pool. Under pool, a cab is shared by multiple passengers
such that the fare for each passengers get reduced and on the other hand, the cab driver get the
opportunity of more income (Hamari, Sjöklint and Ukkonen 2016). In this way both ends are
better off as resources are allocated efficiently among maximum of people willing to take the
service. Hence, it one of the major reason that encourages people to participate in collaborative
consumption. It can be said that people’s interest towards collaborative consumption has made it
necessary to formulate a business model such as sharing economy and thus the companies
relevant to this business model emerged and Uber is one of them. The case of Uber is important
in this case, because it has successfully implemented the business model of sharing economy
after Airbnb. Hence, it can be said that sharing economy is the solution for collaborative
consumption.

10Socio-economic and Legal Assessment Report of Uber
In his article, JW Smith has explained why Uber will the future of the economy and any
business model that follows the suit will enjoy the most of the market share of the corresponding
sector. Uber offers various kind of services from food delivery to cab service (Furunes and
Mkono 2019). The company changes the purchasing perspective of the consumer. Rather it can
be said cost of consumers get reduced after the entry of the Uber and similar companies in the
market. Uber addresses the most important aspect of the customers and that is urgency (Smith
2016). During time of immediate requirement passengers previously had to wait for long time to
get a taxi, however, Uber solved this problem and now a passenger has to wait less than five
minutes. In addition to that, previously passengers has to go out to road to catch a cab but now
they get picked by the cab from home. The sharing economy thus changed the concept of market
place from “Go to” to “Come to”. It means that after emergence of sharing economy companies
like Uber producers reach consumers instead of the opposite case occurred in the traditional
business model (Laptev et al. 2017). However, with the innovation of artificial intelligence and
robotics the labour market is going to change a lot within twenty years of time. As per the article,
47% of jobs in the US will be replaced by robotics and artificial intelligence and the probability
of this occurrence is more than 70%.
Impact of legal framework and political factors
Political factors have significant effect on development of any business in a country. The
case of Uber is thus no exception to this. The political factors are directly influenced by the
activity of the government of a country (Wang and Mu 2018). Any company that operates in a
country has to abide by the rules and regulations set by the government of the concerned country.
In case of any violation or discrepancy the company might get black listed or lose its license to
business. Uber has also faced various political problems during its initial days and still facing

11Socio-economic and Legal Assessment Report of Uber
few that are hampering the smooth operation. Initially, the concept of sharing economy was new
to the world and thus looked every other new idea it faced criticisms (Wirtz and Tang 2016).
Uber was looked upon as the threat to the traditional taxi business and thus the government in
many countries fined Uber for ill practice of business. Other than this, presence of lobbyism is
also a threat to Uber as many would want the company to stop the way of its operation. Uber is a
sharing economy company and it mode of operation is different from traditional mode and thus it
faces different questions such as if an accident happens who will be held responsible for it Uber
or the driver of the cab. The rules and regulation of government is another factor that directly
impacts the business of Uber. Suppose, government made a rule of price ceiling or price floor
then it will be difficult for Uber to charge fare lower than the rate set by the government.
Additionally, strategy of surge pricing will be difficult implement and thus for Uber it is difficult
to sustain with it business of model of sharing economy as the rules and regulation of the
government might significantly disrupt the workings of the Uber (Geradin 2015). On the other
hand, if the government understands te benefit of the sharing economy and make the rules and
regulation such that the economy gets the benefit from the business model of Uber and also
restrict it from becoming a monopoly power then the economy will grow and there will be equal
distribution of income and welfare. Therefore, economic growth and development of Uber solely
depends on the perception of government about the sharing economy and the rules and
regulations of the industry in which Uber is operating.
Sharing economy is the new kind of economic system under which efficiency in resource
allocation, capacity utilization and cost reduction is achieved with the use of newly innovated
technology of information and communication. The concept of sharing economy suggests that
any underutilized resource can be used fully if shared with another wiling consumer such that no

12Socio-economic and Legal Assessment Report of Uber
resources are wasted (Kathan, Matzler and Veider 2016). In this way, the cost of production will
reduce and thereby the price of the products will reduce too. It is evident that the business model
of Uber is based on the sharing economy. The pool car service of Uber is the direct sharing
economy based model of the company that allow passengers to share their rides. In this way, a
cab with four seats can be availed by four different passengers. Under this policy, the fare price
of taking cab will go down too. Therefore, this benefits both the company and the consumers and
hence the economy is better off. Jump Bikes the subsidiary of Uber provides bikes on rent. The
concept is that a person can rent a bike pay for it in per hour basis. The bikes that are offered are
battery operated and thus it is environment friendly. Therefore, it can be observed that the
increase of usage of Uber has declined the use of private vehicles and consumption of fuel.
Consequently, the road congestion has declined significantly and the environmental pollution has
declined too. The economic condition of the people has improved as the cost of transport has
declined (Li, Hong and Zhang 2016). Hence, it can be seen that the sharing economy based
business model has worked for Uber. Rather the business model has helped the company to gain
major share of the market and provided with immense market power such that Uber has become
a firm close to monopoly.
Companies or organizations that do business in a county has to abide the legal system
present there. Legal system are of two types one is form and the other is informal. Under formal
legal system, the government regulates the process of establishment of any business organization
legally. It means the process of licensing and related legal processes (Prentice and Monteiro
2016). On the other hand, informal law means the process of regulating sector and supervision
over the sector firms such that no firm can indulge in malpractice in order to gain more profit by
hurting other firms’ interest unlawfully (Craig 2017). The areas that are regulated by informal

13Socio-economic and Legal Assessment Report of Uber
laws are pricing policy, property destruction, breaking of road laws and influencing the industry
by making improper promotion and unfair use of market power. However, in many cases it can
be seen that business organizations capture the market by using price and strategies and
economies of scale and thereby remove smaller firms and gain monopoly power over the market
(Fiedorczuk 2016). Thus, to restrict firm from gaining monopoly power or exploit market by
collusion the antitrust law was introduced. There are three main acts under the antitrust law
namely Sherman Act of 1890, Federal Trade Commission Act and Clayton Act of 1914. These
three laws restrict firms from using price-fixing policies, collusion among firms, merger and
acquisition and cartel. These laws are applicable in the taxi industry as well and thus Uber comes
under this acts. The traditional taxi industry was mainly comprised of individual drivers who run
their own taxis (Alese 2016). Previously, there was no firm in the industry and thus no driver
was controlled by any firm. However, to regulate the industry there was drivers association but
with the advent of Uber the system of the cab industry has changed. The sharing economy and its
benefit has convinced almost all passengers that it is the best mode of transport system. It has
solved many problems of the passengers. It is the main reason due to which Uber has captured
the larger share of the market. Therefore, the industry is going in the hands of Uber and if not
controlled then the company might gain monopoly power in future. However, the antitrust law
possibly restrict the industry from changing that way but the development of social economy in
the industry is uncertain as per the current situation.
Conclusion and recommendation
The above discussion on Uber leads to the conclusion that the company is organization
that started its business in the taxi industry based on the concept of sharing economy. The
objective of the company was to cut the cost of taxi rides by the solving the problems of the

14Socio-economic and Legal Assessment Report of Uber
industry that were not regarded as problem or felt as problem by drivers or passengers but they
existed since the origin of the industry. The problems are mismatch in demand and supply, over
consumption, inefficient allocation of resources, high waiting time and only cash mode of
payment system. Uber has solved all these problems by its application using which passengers
can book cabs get it in minimum waiting time and along with that get picked up from the desired
location. The surge pricing policy has solved the supply and demand mismatch and provision of
multiple payment option has made it easier for the passengers to book cabs even when they are
running short of cash. These changes in the taxi industry has reduced the cost and thus the fare
price get lowered. However, Uber has been criticized due its pricing policy. It charges less than
the traditional taxis during normal hours that hampers their business and on the other hand, Uber
charge high fare during peak hours and exploits customers. In spite of this, passengers prefer
Uber over traditional taxis due to other facilities provided by the app cab provider. It must be
noted that the passengers who are unwilling to pay high price during peak hours can avail pool
service where the fare charged is much lower but a passenger has to share the cab with other
passengers. Gradually Uber has become a giant in the taxi industry and gaining monopoly power
over the market. However, the growth of Uber depends on the rules and regulation of the
government of the country in which it operates. The main positive side of Uber that it is based on
the sharing economy concept and due to that reason even after use of unfair pricing policies, that
government has not banned the organization from operating in the taxi industry. However, there
are several laws that regulates Uber such that it does not get control over the market and gain
monopoly power. The law that deserves special mention in this regard is antitrust law. It has
been analyzed in the report that due to presence of Uber the possibility of development of social
economy in taxi industry seems difficult as app cab service providers would not work under any

15Socio-economic and Legal Assessment Report of Uber
association as it will hamper system of sharing economy. Additionally, the socio-economic trend
and technological progress supports the development of sharing economy. Thus, social economy
is not going to develop ion taxi industry.
From the above analysis, it is evident that the business model of Uber is a good model as
it is based on sharing economy but there are various aspects require more clarity such that the
government can rely upon the company that it would not become a monopoly firm. For that
reason, the firm should not charge fare as high as 2 times the normal fare during peak hours.
During peak hours, maximum fare that can be charged should be 1.5 times. In addition to that,
the company should physically interview the drivers before employing them such that no
security issues get raised. The comma should make reports that studies the impact of Uber on the
taxi industry and how it is improving the socio-economic structure. In the part of government,
more laws are required because even though the taxi industry has not yet become the monopoly
industry but it is dominated by Uber and it can be said that the company is enjoying undeclared
monopoly power. Therefore, to make the market efficient and more competitive the government
should encourage other companies to enter the industry. The government could also take the
traditional taxi drivers under its radar, support them with launch of cab booking application like
Uber, and thereby control the pricing in the industry and any kind of monopoly practice.

16Socio-economic and Legal Assessment Report of Uber
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20Socio-economic and Legal Assessment Report of Uber