(Chokkattu, and Crook). This multibillion dollar company uses a smartphone app that connects riders with their partner drivers through its powerful smartphone app. In fact, multiple issues have been affecting Uber. Issues strike Uber every time they try to operate in different cities. The most significant problems affecting this company are regulations, safety and low business for taxi companies. As Uber has been operating for more than five years with no restrictions, different entities have joined together to help create regulatory laws against this company.
The most consistent regulatory problem for this company is what they call “surge pricing. ” The surge pricing enables Uber to raise the prices and overcharge their clients for services that are supposed to be regulated. For instance, a twenty dollar trip could be doubled or even tripled when the surge pricing is in effect. (Posner).
Uber claims that the only reason they promote the surge pricing is to bring more drivers to the streets during rush hours, holidays, or special events. Some experts confirm that Uber does it for intentional purposes of increasing earnings more quickly. Many people have been affected by the surge pricing situation which has created lots of controversy among Uber users and competitor taxi companies. There has been a high volume of demands requesting Uber to stop the surge pricing, but these efforts have not worked. Therefore, Uber keeps charging its customers unnecessary higher fares.
This is a very significant issue due to the simple fact that people feel they are being taken advantage of by the ridesharing company. Since other taxi companies cannot cover those high demands during peak hours, Uber takes advantage of that and makes more money. This issue is creating a monopoly environment in this particular service area. Regulations are not the only problem Uber is currently facing; there are areas that the company must to improve in order to fully satisfy people. Safety is another major issue affecting this international company. Uber is a company that needs to improve their safety department due to some controversial issues that have occurred since its beginning.
A lot of sex abuse, sexual harassment and kidnapping cases are increasingly affecting Uber’s image. Some of these cases could have easily been avoided by conducting more extensive background checks at the time of hire. Seeing that Uber does not require its partners to go through a fingerprint process, almost anyone can work for them. It is highly dangerous to hire these kind of individuals to perform this delicate job. Another major safety issue that Uber faces has to do with their insurance. According to a recent online article.
“An Uber driver in San Francisco struck and killed a 6-year-old on New Year’s Eve 2013, but the $1 million insurance didn’t kick in because the driver didn’t have an uber fare at the time of the accident” (Picchi). These few examples can prove that Uber does not provide its clients with a highly secure system as they state. For instance, a better and well developed safety system must be created in exchange of a safer service. Even though this is a major issue, it is not the most significant problem to be highlighted regarding Uber.
Low business for other companies represents the most important problem. It is important to emphasize that Uber is almost everywhere which automatically gives the company a huge advantage compared to other taxi companies. This situation affects long established taxi companies that have been providing service for many years before Uber. Due to the high operational cost, some taxi companies are disappearing. On the other hand, Uber increases its revenues every year because of its low operational cost.
(Friedman). For example, Uber drivers do not have taxi licenses nor do they have taxi registered cars, this enables them to operate with smaller budgets and create greater profits. They do not require commercial insurance to their partner drivers that in fact is highly dangerous and less expensive. This allows Uber to create an image of a cheap service when in reality it is not. Because of this situation most of those companies are disappearing affecting economy in many different ways. Lawmakers are trying to interfere in the case, but until some kind of agreement is created regular taxi companies will continue to be affected by the decrease of business in multiple cities around the world.
Uber has found some ways to overcome its numerous obstacles and continue providing an improper service. Starting with the regulations that need to be implemented in order convert the company into a legit one. Followed by the safety issues that need to be taken care of, so Uber users ride more confident and safe. Lastly, it is highly necessary to create laws in order to prevent Uber from creating a monopoly in the different cities around the world where they operate. For Uber to increase its acceptance across the different cities in the globe, the company will have to take care of all those problem ruining its image and good standing.
Chokkattu, Julian, and Jordan Crook.
“A Brief History of Uber. ” Tech Crunch. 14 Aug. 2014.
Web. 29 May 2015. Posner, Eric. “Why the Government Should Regulate Uber and Taxis. ” Slate. 5 Jan.
2015. Web. 28 May 2015. Picchi, Aimee. “The Rising Safety Issues That Could Throttle Uber. ” CBSNews.
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Friedman, Matt. “Uber: State Lawmakers and Taxi Industry Are Trying to Drive Us out of N. J. ” NJTrue Jersey. NJ. com, 18 Mar.
2015. Web. 28 May 2015.