Table of Contents
Impacts of Uber 3
Appendix A 6
Report on: Research Assignment- UBER
This report serves to assist in the development of a strategy to manage the new player in the taxi industry, “UBER” and determine its place in both the Australian and Queensland economy. Uber is part of a larger movement towards a sharing economy. The report will explain the sharing economy and why consumers are welcoming this model; whilst also discussing the impacts of Uber on the local economy, it will identify the problems that all stakeholders have with Uber and analyse the possible outcomes of these issues on the Queensland market. Finally, recommendations will be made as to how best deal with Uber and put stakeholders at ease.
Uber is a ridesharing app that uses a phone’s GPS capabilities to connect drivers with passengers (Pullen J.P, 2017). The drivers use their own cars to bring passengers to a desired location, and the drivers are paid through the platform (Deloitte Access Economics Pty Ltd 2016). The company falls under the category of a sharing economy. This type of economy allows people to rent goods or services more cheaply and easily to each other, as a pose to working with traditional companies (Majerol, V 2015). People prefer the sharing economy to conventional business models as the economy uses items that are expensive to buy (incentive for buyer to rent), and are widely owned by people who do not make full use of them (“easy” money can be made by items that are otherwise not even used) (The Economist Newspaper Limited 2017). The Economist Newspaper Limited (2017) also explains that there are environmental benefits to this type of economy, as fewer assets are required to support a greater amount of people. Consumers like the increase in competition, and believe it will be beneficial; they are already seeing the rewards as one particular Uber user was astonished at the price difference between Taxis and Uber rides (Lewis, D 2015).
Uber was legalised on the 4th August 2016 (Booth, C 2016). This occurred because we have a mixed economy in Australia, and therefore Queensland. A mixed economic system contains aspects of the market, command, and traditional economies (About, Inc 2017). This type of economy protects private property, and provides reasonable freedom in the spending of capital, but also allows a central government to interfere in economic processes when necessary (such as the decision to legalise Uber) (Investopedia, LLC 2017b).
Since Australia has a mixed economy Uber could infiltrate the market as the taxi service is not state-owned, as confirmed by Booth, C (2016), in her article, in which she refers to the taxi industry. In a command economy however, the government makes production decisions about goods, this removes the place of private businesses in the economy, as everything is provided by the government (Investopedia, LLC 2017a). This means that no competition...