Uber Case Introduction
The rise of the sharing economy challenges every industry where there are underutilized assets and the
need for cost sharing.
Although sharing economies have been around for thousands of years, advances
in communication and information sharing technologies have enabled new business models based on
asset sharing to spread easily and rapidly.
However, the sharing economy introduces
a dynamic friction
between the traditional understanding of profitability along an industry’s value chain and the new
valuation placed on its products and services by newly empowered consumers.
At inception, Uber first introduced a patented technology p
latform to allow consumers to easily share
access to a wide variety of vehicles and other mobility devices, while simultaneously
an additional source of income. Originally
Uber consumers paid a premium for the service, but over
siness units also targeted low
price alternatives, which allowed
the company to lead the US ride
sharing markets at all price points. The company responded by opening its strategic policy to pursue
becoming a leader in other areas of the sharing economy as
well, such as health care (UberHealth) and
elder care (UberAssist).
.S. firms looking to bring sharing
economy business models, like Uber, have encountered intermittent
scale success, especially on foreign soil. It seems that sharing economies wor
k well at smaller
but introducing them to regional or global markets introduced institutional and industry barriers
unique to each market. Uber’s success also attrac
ted competitors both in the United States and in major
such as the
EU, China, and India. As Uber grew, so did industry resistance to its unique
advantages over foreign companies who felt unfairly constrained by industry regulations, unionized
labor, and other structural challenges limiting their pricing and flexibility.
r, Uber found that
market consumers were less open to the premise of the sharing economy. While Uber
may have been very clear on its business model, competencies, an
d strategic approach in the United
, it struggles to understand th
e benefits and challenges of extending the sharing economy
internationally. Can you help them?
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