With the emergence of the technological breakthrough that has been occurring over the past few decades, the transfer of most services to the digital environment was not only necessary but also inevitable. The opportunities of the digital market had to be explored, and a vast number of companies managed to embrace the idea of platform entrepreneurship, which implies the lack of physical presence yet provides various services to its target demographic.1 Thus, the creation of Uber can be seen as the prime example of a specific need, particularly, the necessity for transportation, being transferred to the realm of the digital market. Because of the appeal that the service has for Millennials as one of the key audiences, as well as due to a wider range of options regarding payment, route tracking, and more comfortable experiences, the organization has ousted other, non-platform taxi companies from the market.
Uber can be seen as the primary example of platform service, with no physical office, yet delivering quite tangible and impressive results. The organization functions both in the digital and actual market, with orders being filed with the help of applications, and passengers being transported to required destinations by car. The use of innovative technologies, particularly, an online application as the means of interacting with customers, provides extra opportunities for the firm to improve the quality of its services. The transition from a regular service to the platform-based one has created additional opportunities for interacting with customers directly, thus, improving quality consistently.2 Therefore, Uber can be seen as a company that has pioneered in introducing the idea of platform service into the transportation industry.
It would be a mistake to claim that Uber as a platform organization is entirely flawless. Quite the contrary, being comparatively new, the idea of a platform company requires further testing and exploration, thus making Uber handle some of the challenges that a pioneering organization has to accept. For instance, the legal uncertainty that does not allow placing Uber on the map of the current legislation and, thus makes its services questionable from the perspective of tax liabilities deserves to be mentioned.3 The problems associated with legal regulations are currently quite common with platforms due to their innovative mature and recent emergence. Thus, the greatest asset of a platform, which is its originality and novelty, also causes platform firms, in general, and Uber, in particular, to experience difficulties in the global economy. The specified issue makes the success of the organization as a platform company questionable.
Nevertheless, Uber is likely to remain economically profitable and extraordinarily popular among an increasingly large number of citizens. The legal issues mentioned above are quite expected due to the lack of regulations allowing authorities to coordinate the realm of the digital market. However, with the introduction of the standards that will help define the place of Uber in the digital market and help the company meet the existing legal standards, an even greater increase in the firm’s profitability is expected to occur. The popularity that it currently enjoys among its target audience shows that the demand for Uber services is likely to rise in the future, which means that the organization will have a powerful impetus for continuing its operations.
Among possible legal obstacles, one may also mention the possible attempt at curbing Uber’s economic activities due to the drop in the performance of traditional taxis. Indeed the recent protests against Uber as the ostensible stool for ousting taxis from the transportation market have shown that taxi drivers and their supporters were quite vocal about the possible consequences to the specified area of business. However, the difficulties that organizations in the transportation industry have been facing after the introduction of Uber to the market should be interpreted not as the sign of Uber’s negative impact but as the proof that the current taxi business requires urgent improvements.4 The inability of other companies to meet the quality standards indicates that there is the need to introduce improvements to the transportation industry as opposed to stifling innovative businesses.
By using the opportunities that the platform system offers to the maximum of its potential, Uber has managed to become significantly more competitive in the transportation industry than any other taxi company offering traditional services does. The case of Uber can be seen as the graphic representation of the successful use of the resources available to platform-based services. Despite the physical presence in the target market, Uber has managed to not only cement its position in the target market but also raise the bar for the quality of transportation services significantly. Despite minor issues in its performance, the organization has managed to use the available resources to its advantage, exploring the urban infrastructure and improving the quality of its services systematically. Therefore, Uber can be deemed as the extension of the platform company concept since it not only represents the idea of a digital organization but also introduces improvements to the target market.
References
Douay, N. (2018). Urban planning in the digital age (vol. 6). New York, NY: John Wiley & Sons.
Moore, M., & Tambini, D. (eds.). (2018). Digital dominance: The power of Google, Amazon, Facebook, and Apple. Oxford, United Kingdom: Oxford University Press.
Ng, I. C. L. (2014). Creating new markets in the digital economy: Value and worth. Cambridge, United Kingdom: Cambridge University Press.
Wirtz, J., & Lovelock, C. (2016). Services marketing: People, technology, strategy (8th ed.). Hackensack, NJ: World Scientific Publishing Company.
Footnotes
- Ng, 2014.
- Moore & Tambini, 2018.
- Douay, 2018.
- Wirtz & Lovelock, 2016.