Uber - Changing the Way the World Moves?

1. Do you agree with Uber’s surge pricing policy? Is it fair / unfair / exploitative?

• [pic 1]Yes
• [pic 2]No

I think that Uber’s surge pricing policy is fair, partially. Dynamic pricing is used in multiple industries like hotels, airlines, movie theatres and is due to gap in demand and supply. Surge pricing is required to lure the drivers to come to road meet the current demand. Uber also placed in a constraint of maximum 2.8x surge in event of emergency after early controversies. However, in my view there should be a pre-determined range in which the surge should fall to check disproportionate surge which prevents customers to neglect the need altogether and drivers to go empty handed.

2. Uber has been notoriously aggressive in its business tactics and frequently operates without any regulatory approval. Do you agree with its way of conducting business?

• [pic 3]Yes
• [pic 4]No

In this hypercompetitive world, a company needs to be aggressive in its approach in order to grab a bigger piece of the market and be an industry leader. Uber has been blamed for 2 particular reasons-:

1. Ignoring Local rules & regulations

Uber’s business model is an Asset-Light-Model where it doesn’t own the most critical asset of its business, which is Vehicle. Hence it doesn’t come under Motor Vehicles Act of various cities as they don’t cover this type of service. Now to wait for the authorities to prepare a draft policy would lead prevent competition pre-emption and loss of First Mover Advantage. Hence, I see no issue in this part

1. Business Tactics

Playing Hardball is not an unethical strategy and is not a skill which every company possesses. However, one should respect the rules of the game and be within the edge of that boundary. This was not showcased by Uber in an instance where it tried to slow down the service of one of its ride-sharing competitor.

3. What are the benefits for customers and drivers to join Uber?

Benefits for the Customers

• Convenience & ease of booking cab online/ anytime
• Transparency in terms of Driver & his quality ratings
• Location tracking by use of GPS
• Online payment to prevent customer from hassles of cash
• Clean & quality driven cars
• Availability for outstation destinations

Benefits for the Drivers

• Reliable/ Additional source of income
• Guaranteed automatic payment
• Favorable Loan terms to own a vehicle
• Technological assistance in terms of Heat Maps to help identify the areas for picking up potential customers

4. Will Uber remain a successful model? Comment on the same considering emerging markets like India and China?