Disruption vs. Innovation: An Analysis of Uber and the Gig Economy

This essay explores the debate surrounding Uber and the gig economy, questioning whether it represents disruptive innovation or simply disruption. Initially, the author believed Uber's business model was detrimental, causing job losses and societal disruption within the local taxi industry. However, after researching the impact of Uber and understanding the concept of the 'sharing economy,' the author recognizes Uber as a form of disruptive innovation. While acknowledging the initial negative impacts, the essay highlights Uber's role in creating new opportunities for self-employed drivers and improving efficiency within the taxi system. The author concludes that despite short-term challenges, Uber and similar organizations are essential for long-term economic growth and development.

Communication and social change

Uber and gig economy: Disruption vs. innovation
Before the class: I have been hearing about uber and the disruption that it has caused in the local taxi
industry. I have always believed that starting a business at the expense of others is hardly profitable for
any economy. Uber has started a taxi business which has rendered various modes of public transport
useless. This is why there are so many protests that are taking place in different parts of the world. Taxi
drivers are going on strikes and protesting against the excessive usage of uber which is rendering them
jobless.
The prices offered by uber are much lesser than the local taxi. And because Uber runs on economies of
scale, it is possible for Uber to charge relatively lesser from its customers. Local taxis cannot charge so
less because they will not be able to meet their cost. Therefore I believed that this form of
entrepreneurship is disrupting the society. Therefore laws must be implemented to restrict their use or
put a price floor on it.
After the class: Since its very inception, Uber has created waves in the market. In fact the term
‘uberisation’ of the world is being used to depict the increasing reach of Uber and the strategy adopted
by the firm. After certain amount of research I came across this article in Forbes ‘The impact of Uber
upon taxi industry’. This helped me get a real picture. There is no doubt that Uber has created a lot of
convenience for passengers. Using this form of transport allows customers to book a ride, track their
ride and pay using online wallets. Passengers no longer have to worry about whether or not they will get
a taxi and after how long will the taxi arrive. Uber allows them to track all these services in real time
making it a hassle free experience for the customer.
The other side of Uber throws light on its drivers. The Forbes article helped me understand that Uber is
an example of ‘sharing economy’. This kind of an economy and the growth of Uber is important for the
growth of our society. Data reveals that even though there is a 10% fall in the incomes of salaried
drivers, there is also a 50% rise in the number of self-employed drivers in the United States. Uber is
giving drivers an opportunity to connect with a better managed and organized taxi system. Through this
opportunity, Uber has created more jobs than it has destroyed.
Uber drivers earn better than traditional taxi drivers because Uber software allows drivers to manage
their time and services in a better manner leading to improved utilization of the same and hence
increased earnings for the drivers. Therefore in the longer run, it is important to note that organizations
like Uber are a form of disruptive innovation. These forms of innovation are essential for the growth and

development of every economy. The problems and the protests associated with the same are short lived
and the focus must be on the bigger picture.
References
Forbes, (2017), ‘The impact of Uber on taxi industry’, Retrieved from
https://www.forbes.com/sites/adigaskell/2017/01/26/study-explores-the-impact-of-uber-on-the-taxi-
industry/#13ad728116b0.