Over the past 30 years, economic restructuring and advancements in technological innovation have allowed for the emergence of new business models that disrupt many longstanding industries. Much of the industry disruption that we see today stems from tech companies and startups that have developed a better cost-model by utilizing smart phone-enabled apps to offer simpler and less expensive products and services than those offered by competing incumbents. Uber Technologies Inc., an on-demand ridesharing service that connects passengers to local drivers in real time using smartphone technology, is one of the most disruptive, successful tech start-ups yet. Uber’s success, which can be attributed to a low fixed-cost model that provides ride-seekers a faster and more reliable alternative to the traditional taxi and promises drivers a higher hourly earning through the avoidance of costly regulations, has severely disrupted the taxi service industry. In cities around the world, taxi companies are losing their customers and their drivers to Uber and similar “transportation network companies” (TNCs), such as Lyft, Sidecar, and Hailo...
Abstract:
Publication date:
December 7, 2014
Publication type:
Working Paper
