Sharing Economy

Uber

2016.02

Wrong lessons from Uber
Sharing Economy
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Uber is taking business from taxis at an unprecedented rate globally and is expected to become the next $100-Billion company. Uber is a transportation service that connects riders with drivers using their phone’s GPS capabilities, letting both parties know each other’s location.


The key success factor behind Uber's growth is that “its fare is 30~70% lower than taxis but it provides 5 times greater service (Low price-High quality)”.

  • Uber cars are more clean and comfortable than taxis as they are privately owned by the drivers and drivers make sure you are able to enjoy your ride.
  • You can get a ride anytime, anywhere within 5~10 minutes.
  • Uber Pool service allows 2 passengers to share rides, lowering the fares per each passenger by 50 to 70%.

Many companies in various industries are adopting the “Uber Model” (Sharing Economy: providing service by utilizing existing manpower/resources).

  • Examples: On-Demand Car Wash Service and On-Demand Shopping and Delivery Service that use existing manpower.

Nonetheless, we do not see any service can be referred to as “the next Uber”. This is because many companies, unlike Uber, are not able to provide better service at a lower price than the incumbent.

  • Most of the companies that adopted “Uber Model” follow the concept of sharing economy but are not providing “better service” with “lower” price.

What conditions have to be met in order to provide better service at an affordable price, based on the concept of sharing economy?

Discuss the cases of Uber’s success and its competitors’ failures in English with your tutor and receive feedback on your verbal skills.

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