Running head: UBER CASE STUDY

Uber: Case Study

Caroline Peters
Delaware Technical Community College

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Uber: Case Study

The golden age of technology has led to a number of innovations, advancements, and an
overall revolution of how things once existed. Fortunately, society has reaped the benefits of the
technological revolution with faster internet, larger data storage capability, and even the everyday
tasks and inconveniences of life solvable at the literal swipe of a finger on a smart phone. These
advancements tend to evolve and expand throughout the public quickly and, in the case of the taxihail service app, Uber, lead to a seemingly endless string of controversies and criticisms, that are
couple with enormously high investor turnouts, new market entries, and record breaking company
valuations and profits.
Company Overview and Analysis
Uber, the taxi-hail service mobile app, stands proudly beside other sharing economy figure
heads like Craigslist, Netflix, AirBNB and InstaCart and has helped to pave the way for a
revitalized, adaptive, and consumer oriented worldwide marketplace. Uber, like many of its
sharing economy counterparts, has grown rapidly in in size, net worth, and effectiveness on the
market in a relatively short period of time. The company, Uber Technologies, Inc., which
headquarters in San Francisco, California develops, sells and operates the mobile-app-based
transportation network, Uber. It is a smartphone enabled application that helps riders find drivers
in their area. Eliminating the need for cash payments or any time to be taken out to complete a
transaction, customers can link the app to a credit card or pay type account and pay electronically.
Additionally, customers and drivers may rate each other post-ride, which enables the company to
monitor driver and rider. Uber has grown to great success, with a most recent valuation of over
$51 billion since its inception in 2009 by cofounders, Travis Kalanick and Garrett Camp. Uber has
the service available in over 58 countries and 330 cities worldwide (Chafkin, 2015). The service

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continues to grow and expand to the benefit of the riders overall experience and ease of access,
the drivers ability to make better earnings, and the company shareholders profit margin and
capital investors goals, as well as survive intense regulatory battles, headlines exposing flaws and
heat from competitors like Lyft, Hailo, and the upcoming to be name Google project. In terms of
strategy and implementation, Uber has always been very active and with a lot of success. As a
popular app tech startup these companies tend to focus a lot of the firms cash on hand toward
enticing investors, thus growing in size and ability to push out competitors from the market.
Moreover, Ubers success can be associated with its ability to keep the right team. Thus, the
company has been attracting top talent sharing their passion and values that range across the board
from tech and coding geniuses to economist mega-minds that help to push the company to become
more attune with the individual needs and desires of its drivers and passenger counterparts.
Driver Classification Debate
Ubers new brand of app-based transportation has led to a seemingly endless string of law
suits against the tech company from citizens, unions and legislators challenging the industrys
nonexistent oversight. This truth is exemplified by the recent litigation against Uber, the ride
sharing mobile app, brought on by the companys drivers that accuse the company of
misclassifying them as contractors, thus robbing them of many of the rights and safeguards granted
to employees. If Uber drivers were classified as employees rather than contractors, they would be
entitled to a number of benefits under federal law. Those employer-employee responsibilities
would include things like unemployment benefits, workers compensation, the right to unionize,
and most importantly the right to seek reimbursement for mileage, maintenance and repair,
insurance costs and tips. Uber has argued that the vast majority of these workers prefer the

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flexibility that being an independent contractor affords them. It sets up a high-profile legal battle
and could potentially require Uber to pay out a much larger settlement to drivers.
It also puts Ubers business model under pressure. Uber has continually said that its a
technology platform connecting drivers to passengers and not a taxi service that hires drivers
directly. Ubers market valuation has surged to $51 billion on the premise that it operates a
technology platform connecting drivers and passengers, rather than a taxi service that owns cars
and employs drivers. If the class-action suit succeeds, the company could be forced to pay drivers
for health insurance, workers compensation and work expenses, such as tolls, fuel and car repairs.
The debate is also rippling through Silicon Valley where dozens of startups rely on independent
contractors to deliver food, run errands and clean houses. Several startups face similar lawsuits,
and a few have switched their business models partly as a result of potential legal challenges. The
current defunct regulatory oversight of such new tech firms causes harm and scrambling to
maintain order and safeguard the public an unlike technology, regulations evolve slowly and with
great effort.
Surge Pricing
The Uber system uses an automated algorithm or process to increase and decrease fare in
real time, thus being able to respond instantly to changes in supply and demand within the market.
This company practice is referred to as surge pricing and is utilized as a measure to attract more
drivers during times of increased rider demand. Customers receive notice when making an Uber
reservation that prices have increased (Davis, 2015). The practice has often resulted in much
resentment and criticism from riders given that the surge pricing takes most impactful effect during
holidays, inclement weather, and natural disasters.

UBER CASE STUDY

Front page controversy examples for the company include New York Citys December
2013 snowstorm which resulted in price surges upwards of eight times the normal fare costs or
during the 2014 Sydney hostage crisis wherein riders attempting to flee the area saw fare hikes of
approximately four times the normal rate (Luckerson, 2014). Uber supported the surge pricing
decision with a tweet from the Uber Sydney Twitter account which stated, We are all concerned
with event in CBDFares have increased to encourage more drivers to come online and pick up
passengers in the area, and later rescinded the statement by refunding the fare surcharges (Uber
Technologies, Inc., 2014). Although many have taken issue with the surge pricing policy, Uber
CEO and cofounder Travis Kalanick has responded to criticism by contending that, Its classic
Econ 101, and is an important tool utilized by the company to maintain serviceability and driver
satisfaction during swift changes in the supply and demand by attracting more drivers to the area
when the rider demand increases (Swisher, 2014).
Passengers with Disabilities
The Americans with Disabilities Act is a regulatory measure that works for the equal
delivery of services and resources of those that are disabled as a means of promoting fairness
regardless of physical, intellectual, or psychological limitations. These laws are the reason for why
nationwide, taxi-services and taxi-unions, are required to provide handicap accessible services for
drivers (Kanter, 2015). Unlike registered and official tax-services, Uber does not officially have to
abide by the standards set forth by the American with Disabilities Act. Currently, personal vehicles
do not fall under such regulation and thus, Uber operates in a loophole of the system. The company
does not own the cars or employ the drivers, and only facilitates the transaction between a willing
driver and passengers, i.e. employs contractor drivers that make use of personal vehicles during
the service. The law does not require the average citizen to accommodate disabled persons, and

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thus Uber has been able to refrain from making the business model accessible to full segments of
the population under the guise of legal loop hole. The public outcry on the issues has been heated
and steady with every horror story that hits the nightly news. A case arose in 2014 from a former
passenger that an Uber driver sealed a blind riders guide dog in the trunk of the car and refused
to the let the animal out, while other cases alleged that drivers were directed to refuse pick up to
disabled drivers (Wieczner, 2015). Several cases have been brought up against Uber and Lyft
concerning the companies inability to provide wheelchair accessible devices. Since the allegations
and lawsuits arose, the company has taken a reformed approached to the issue of disabled persons
by adding specialized financing and incentives for Uber drivers that decide to purchase a handicap
accessible vehicle to use while in service. Suggestions include marketing to both drivers with
handicap capable vehicles and to passengers requiring handicap capable vehicles as a means to not
only encourage the practice, but demonstrate to the entire prospective Uber public that the
company cares. Consumers can forgive when there is an understandable chain in the startup
thought process and can concede certain discouraging business practices and behaviors for
companies that are clearly new and learning: however, the bigger a company like Uber gets, the
less likely the consumer market is willing to overlook when dealing with safety and civil rights
issues.
Conclusion
In the on slot of new technology, also comes great responsibility and unfortunately for the
public, regulation and safe guards tend take place only once controversy has ensued. Lack of
oversight and regulation has led to an ethically questionable corporate culture from the ride sharing
app, Uber, given the companys policies regarding surge pricing during crisis, driver treatment,
and lack of accommodation of those with disabilities. The company, although at a learning curve

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on many of the aforementioned issues, has shown a willingness to work alongside regulators,
garner the publics change in opinion through positive marketing projects, and attempt to bridge
the gap facing the app and its drivers. Given the companies dedication to a quality and cohesive
workforce, there is little doubt that Uber will not be a major player in the sharing economy well
into the future.

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Works Cited

Chafkin, M. (2015, October). What Makes Uber Run. Fast Company (199), pp. 110-142.
Davis, J. (2015). Drive at Your Own Risk: Uber Violates Unfair Competition Laws by
Misleading UberX Drivers About Their Insurance Coverage. Boston College Law
Review , 56 (3), 1097-1142.
Kanter, A. S. (2015). The Americans with Disabilies Act at 25 Years: Lessons to Learn From the
Convention on The Rights of People with Disabilities. Drake Law Review , 63 (3), 819883.
Luckerson, V. (2014, July 10). Uber Agrees to Limit Surge Pricing During Emergencies,
Disasters. Retrieved December 1, 2015, from Time.com:
http://search.ebscohost.com.libproxy.dtcc.edu/login.aspx?direct=true&db=f5h&AN=970
59459&site=ehost-live
Murray, A. (2015, January 1). Uber-nomics. Fortune , 171 (1), pp. 6-6.
Swisher, K. (2014, November 30). Man and Uber Man. Retrieved December 1, 2015, from
Vanity Fair News: http://www.vanityfair.com/news/2014/12/uber-travis-kalanickcontroversy
Uber Technologies, Inc. [Uber_Sydney]. (2014, December 15). We are all concerned with events
in CBD. Fares have increased to encourage more drivers to come online & pick up
passengers in the area [Tweet]. Retrieved December 1, 2015, from @Uber_Sydney:
https://twitter.com/Uber_Sydney
Wieczner, J. (2015, May 26). Why the Disabled are Suing Uber and Lyft. Retrieved December 1,
2015, from Time.com: http://time.com/3895021/why-the-disabled-are-suing-uber-andlyft/