Yashoda Madhusudan
Mr.Reuter
Economics A2
21 Nov 2016.
Uber Vs. Taxis. 
A “Sharing Economy” is when an individual rents a property that is owned by someone else for a short amount of time. Uber is one of the company that uses “Sharing Economy”. Uber has been one of the most demanded company over the years. Uber is an app-based company that connects the passengers to the nearby Uber drivers who can drop them off to their destination. Catching a normal taxi requires standing on the street until an available taxi driver drives by, and also we need to tell a taxi driver the directions if they are not familiar with it. But that's not the case with Uber drivers. It lets the passengers request a car from their smartphone, and they will inform you when they are outside so that you don’t have to stand there waiting for your vehicle. “Passengers pay fees through credit cards that the company keeps on file, and Uber
then takes a percentage of each fare and gives the rest to the drivers” (“The Social”).
Despite of not having to wait on the street for a cab, Uber is a better choice when it comes to price. Uber offers passengers lower price than a normal yellow cab. According to Tech Boomers, “Uber is usually a little bit cheaper than taking a traditional taxi. In most cases, Uber fares can be up to 40% cheaper than traditional taxi fares. In some cases, though, Uber fares can be almost double what they are for taxis, when you factor in extra costs. This is especially true when "surge pricing" is in effect” (“Uber”). As human beings it is natural for us to look for low prices but still get a good service. Uber creates a greater consumer taste than the normal yellow cab. Compared to Yellow Cab, Uber seems to be more reliable when it comes to whether or not your taxi actually arrives. “Over 35% of all traditional taxis called from dispatch never actually make it to their pick-up point on time. With Uber, if there is no driver currently available in your immediate area, you will be informed of this. Also if you don’t feel comfortable when riding in Uber you can use the Uber app to track where the taxi is actually going”.
Not only does Uber gives you the first class service it also creates jobs for private drivers. Uber has been part of helping fight unemployment. It has been helping people find jobs where they feel belonged. According to the fact book, Uber has been creating more than 20,000 new jobs per month. That means there are many people who can work and help them support their family. “Uber’s positive impact goes further, hundreds of thousands of entrepreneurs are using the platform to build their own small business. Resulting in a huge growth engine for cities resulting in billions of dollars being pumped into the U.S. economy”. It also makes the drivers feel safe because the company keeps all the records of who hops in and who don’t. Uber drivers also gets paid higher wages than a normal taxi driver. 
Because of the quality service, the customers substitute Uber for normal taxis. Because the price of the normal taxi has increased the demand for Uber has increased then people tend to substitute Uber for YC. Therefore, substitutes have a positive cross elasticity of demand. As customers we don’t want to spend more money for less service we go for which has a better offers. Uber is also kind of a natural monopoly. Uber started out as a normal way to schedule taxi on your Iphone. But later, due to a lower cost alternative to taxis, Uber is now often preferred by the passengers because of the expedience and also because of a better experiences.
"Uber, Airbnb and Consequences of the Sharing Economy: Research Roundup." Uber, Airbnb and Consequences of the Sharing Economy: Research Roundup. N.p., n.d. Web. 21 Nov. 2016.
@Uber. "An Uber Impact: 20,000 Jobs Created on the Uber Platform Every Month." Uber Global. N.p., 2015. Web. 21 Nov. 2016.
"How Uber And The On-Demand Economy Are Changing The Way We ..." N.p., n.d. Web. 21 Nov. 2016.
Eadicicco, Lisa. "Uber Says It's Creating 20,000 Jobs Per Month." Business Insider. Business Insider, Inc, 2014. Web. 21 Nov. 2016.
Being past passengers on both Uber and conventional taxis, I could easily say that Uber is the way to go. In the case that you need to go somewhere in the suburbs, it makes more sense. Regular taxi cabs wont bring you much farther past the city limits, which is why Uber is better in my opinion. Although I haven't tried it, I have never heard of Uber cars being downtown, like in Chicago. I have only heard of fares that are in the suburbs. In the case that you're in the city and need a ride, I'm assuming a regular taxi or bus is the only way you're getting around. Overall, I think that it depends on the location and situation, but Uber seems to be the better way to go.
ReplyDeleteI feel like Uber will eventually bring taxis to extinction. With Uber being less expensive, more reliable, and creating 20,000 jobs a month it is a huge push for them to beat YC. And though taxis maybe better for bigger cities, Uber is a much better option for suburbs and areas of that size.
ReplyDeleteuber has really paved the way in app based transportation instead of the traditional taxi. You mentioned how the the app tells you when the uber driver is there through GPS, as well as it being cheaper to use. If feel like because of these reasons uber has really gotten big and become very mainstream. Just like any other good product, there are a lot of people who try to copy the idea. One company has come out with a uber for females. To create an even safer experience, the company goes through intense background checks in order to insure the passenger's safety. I feel like this app as well as Uber are very influential to the public and provides al ot safer of a way to travel.
ReplyDeleteAs a frequent Uber user, I definitely agree in terms of this service being more efficient in terms of time and money on a normal day. However, there have been instances where taxis have been cheaper. Being in Madison on a Badger game day is a real hassle because the high amount of traffic increases the wages that are required. In that situation the price of a traditional taxi was less. This ends up lowering the quantity demanded for these Uber services therefore less people are willing to use them as often because the prices are higher. Therefore it would make more sense if they kept their prices constant in order to benefit game day fans and more people would be willing to use an Uber and their profit would increase. Especially since I agree that in traditional taxis you have to explain directions which ends up being a bit of a hassle. Therefore I think that Ubers are not always the better option, and if they want to maximize their profit they should keep their prices constant.
ReplyDeleteUber simply outclasses taxis and is the future. Taxis are primarily used in just downtown, while uber can be used just about anywhere. Uber is also more convenient and for the most part. Taxi companies will need to adapt to be able to compete with uber, or they will end up like blockbuster.
ReplyDeleteAlthough it is smart for a business to see that they have a high demand and therefore choose to increase their price on days where they know consumers will need to use them or want to use them, I don't think it is the best idea as they have competitors that have lower prices and some people may settle for those instead. Although they have high reliability and other qualities that can not be passed up by their competitors, they still might lose some business, not a lot, but some business if they choose to increase their prices.
ReplyDeleteI feel as if Uber is the way to go because of all the benefits it brings with it. Taxi's in general are un-reliable. You dont know if you're going to get one and the price is expensive. Uber is the exact opposite you're able to request a car rather than trying to whistle and get lucky with a taxi. Uber in my mind is easily one of the greatest business ideas ever created. One thing I think Uber helps with the amount of drunk driving accidents. If you're someone under the influence getting a taxi is almost never going to happen, therefore you might put somebodies life at risk getting behind the wheel. With Uber now it's easier to get home without having to drive your car and put yours or someone else's life at risk. Uber is defiantly changing the taxi market and could be helping us in other aspects of life as well.
ReplyDeleteI believe that the use of UBER services is very beneficial to not only individuals looking for transportation but also for the economy. This service takes care of many things at once by generating jobs and more revenue. It has also improved the quality of taxi services greatly. Because UBER offers the opportunity to sign up as an UBER driver, many people that are unemployed or get paid low wages are able to get paid some extra cash in their free time by transporting passengers. The wages for UBER drivers are also higher than regular taxi drivers, so there is tons of marginal benefit. Not only that, but it also improves many things for the customers as well, providing a more reliable, safe and cheaper taxi service. UBER can offer lower prices than regular taxis, and is also way more convenient because the UBER comes to you and you dont have to do anything besides set up the request on your smartphone. Another thing too that UBER is doing that benefits the population is their safe transportation and how it has prevented many drunk driving incidents or other car accidents for party goers by providing a safe transport option to and from their destination without having to drive. If UBER continues to keep up this good reputation, I believe their business will end up thriving even further.
ReplyDeleteIt's hard to speak from experience because I've never been in an Uber, but from what I've heard and read, I know it's a beneficial service for many reasons. I didn't realize that it would create so many jobs and give people employment as an Uber driver. The only negative thing I've heard about Uber is that some people who drive can turn out to be criminals. I remember hearing about an incident where someone shot their passenger. While that was a rare instance, and Uber has become more safer by using background checks, I still would be skeptical about who I got in a car with. Overall, this was an informing piece to read and kept me engaged the whole time.
ReplyDelete