Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Founded in 2009 by Travis Kalanick, Uber provides transportation service in U.S., European, and Asian cities. In the year 2014, its gross revenues were $495

Founded in 2009 by Travis Kalanick, Uber provides transportation service in U.S., European, and Asian cities. In the year 2014, its gross revenues were $495 million, cost of revenue, $400 million, operating expenses, $661 million, for EBIT of -$565 million.

The original Uber model of operations was for the driver to use her/his own vehicle and offer services as and when they liked. The Uber webpage to drivers emphasizes, "Drive your own car using the Uber Partner app to find riders in your area. Set your own schedule. Get paid weekly." More recently, Uber has arranged for drivers to rent cars so as to provide Uber services.

Uber clients book and pay for rides through the smartphone. After each ride, the Uber client rates the driver on a scale from 1 to 5. If a driver's rating falls below a particular level, Uber discontinues her/him from offering the service. Uber also allows drivers to rate clients.

In January 2015, Uber extended fare cuts from the largest U.S. markets to 48 more cities. Uber asserted that the lower fares would benefit clients and drivers: "with the increased demand, drivers' income goes up as well. More demand turns into significantly more efficiency for the driver, more trips for every hour, and more earnings for every hour on the road".

By contrast with Uber, whose drivers provide service with private cars, the Chinese services, Didi Dache (backed by Tencent) and Kuai Di Dache (backed by Alibaba) are smartphone-based applications to book taxis. In 2015, faced with competition from Uber (backed by search engine Baidu), Didi Dache and Kuai Di Dache merged. Following the merger, they continue to operate as separate services.

image text in transcribed

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Economics Of Inequality

Authors: Thomas Piketty, Arthur Goldhammer

1st Edition

0674504801, 9780674504806

More Books

Students also viewed these Economics questions