Uber is a referral service that primarily offers the services slightly similar to those provided by taxis. Through the use of GPS technology, smartphone owners can use the app that lets them know the location of a ride making it easier for them to know when the ride will arrive. The company that owns the services charge passengers using their credit cards and takes the percentage of the amount while depositing the remaining amount into the driver’s account (Feeney, & companies Uber, 2015).
Laws and regulations affecting Uber operation
Uber requirements for its drivers are that they have their own insured cars. The drivers must also pass the DMV and the background check. However, the operations of Uber have been faced with several setbacks due to the different regulations that vary from city to city, country to country, and even the states where the services are offered (Isaac, 2014). For instance, in South East Asia, the service has not been approved by several regulatory agencies. Unlike the traditional taxi owners, Uber’s operation was not subjected to regulations such the requirement to have a paid government permit. This posed a threat to the local taxi and rent-a-car operators whose businesses was an important source of employment for people in different segments of operations such as mechanics, dispatchers, and drivers.
In western Washington, Uber services have been criticized as they clash with some of the local regulatory frameworks. A lawsuit filed against them by the Western Washington Taxi Cab Operators Association indicates that several taxi drivers were frustrated by unfair business practices as they had to abide by city rules such as licensing fees and uniform rates while Uber had their own way of conducting business with no regard to such requirements (Rogers, 2015).
Other regulatory authorities such as Malaysia’s Road Transport Department have also raised concerns regarding Uber operations in this area. The transport authority’s warning to the public about not being covered by insurance in case of an accident involving an Uber car has had negative effects on its operations (Hall, & Krueger, 2015).
Economic setting affecting Uber’s operation
The operation by Uber has been efficient in economic environments where there are constant demands for the service. The services perform better in a twenty-four-hour operating city like New York since there is always someone in need of a ride (Hall, & Krueger, 2015). However, the services may not pick up in a place like Blacksburg since this is a dead zone in the middle of the night. The pricing algorithm used by Uber has also worked to it its disadvantage as antitrust concerns have been raised on whether it allows collusions among its drivers rather than encouraging competition. This has resulted in concerns about price fixation (Rogers, 2015).
In summary, most of the consumers appreciate the services provided by Uber but the services have proven to be divisive among taxi drivers. It is, therefore, necessary that the regulators come up with stricter laws and regulations in the way Uber operates to ensure that consumers fully benefit, and all the drivers have a fair and a level playing ground.
Feeney, M., & companies Uber, R. (2015). Is Ridesharing Safe?. Cato Policy Analysis, 767, 2.
Hall, J. V., & Krueger, A. B. (2015). An analysis of the labor market for Uber’s driver-partners in the United States. Princeton University Industrial Relations Section Working Paper, 587.
Isaac, E. (2014). Disruptive Innovation: Risk-Shifting and Precarity in the Age of Uber. Retrieved from http://www.brie.berkeley.edu/wp-content/uploads/2015/01/Disruptive-Innovation.pdf
Rogers, B. (2015). The social costs of Uber. University of Chicago Law Review, Forthcoming.