Pursuant to (Teece, 2010), a business model can be construed as something that “embodies nothing less than the organizational and financial ‘architecture’ of a business”. For Uber the chosen company for this report, their Platform based business model approach has functioned catalytic in asserting their striking eminence to date.
Uber heterogeneous to others have potently harnessed the sequential constituents of this business model approach. Consequently, the purpose of this literature review is to comprehend and appreciate these facets that Uber have exerted in their favour. Centric to all of this has been their ability to align their service abetted through technological innovation to the expanding transport sharing economy. To substantiate this nexus that exists between platform business models, technology and the sharing economy, several variables must be unearthed. Academic literature has probed these affiliations, and the content below shall delve into these intrinsically linked variables, succouring Ubers ascendancy. With the sharing economy emerging to prominence throughout the globe, Uber have successfully surfaced as one of the leading commercial companies within this territory.
Broadly speaking the sharing economy can be viewed as a sphere in which physical capital in conjunction with human capital can be shared. This sharing economy is said to “have built on the concept of collaborative consumption” (Hamari et al.,2013, pp. 1).
Academic research into this area by (Belk,2007, pp.126), orated the argument that the “sharing economy can utilise resources, cultivate communities and generate synergies”. Apropos to this Belk in 2014 pointed out “Sharing is a phenomena as old as human kind, while collaborative consumption and the sharing economy are phenomena born out of the internet age” (Belk,2014, pp.1595).
In consonance (Botsman and Rogers,2010), classified collaborative consumption as the realisation that individuals can yield from having access versus ownership of services and products. Antithetically, a lot of disparagement has developed within academia of the manners in which sharing affects workers’ rights and user’s protection. This has manifested into the debate occurring between employment regulators and companies like Uber, trying to ensure low paid workers aren’t phased out by information technology. The “Social Cost of Uber” proposed by (Brishen ,2015), acknowledges the greater social implications Uber will hold for the future of employment.
The article vocalized “Ubers longer-term impact on labour standards is unclear, however, and it may have dark implications for the future of low wage work generally” (Brishen ,2015, pp. 86). This opinion accentuates the dismay within the service industries of how soon low wage jobs will be replaced and phased out by platform-based organizations. The ripple effect of this could prove catastrophic, bringing down the once established industries of the past. Already examples of these alterations occurring can be seen in the hotel industry. Through Airbnb this transformation can be ascertained, epitomising how consumers are favourably entering this new post-ownership sharing economy. This brings about the notion of will Uber eventually take over mail services, food delivery and logistics? Currently the only factors impeded them from accomplishing this are regulators and the threats of substitution.
With Uber crusading and winning in its many battles across the legal domain, time will tell how ample they can evolve. Crucially and imminently the implications of how aggressive Uber will be and allowed, holds great future significance (Brishen, 2015). Logically, the next inquiry into the sharing economy should be why is it popular and why have firms like Uber been able to manipulate its existence? This can be contributed to an array of constituents. First and foremost, the sharing economy has gather impetus due to the result of global economic downturns. This subsequently led to an ascension of people losing their jobs and looking for alternative means of generating income. In addition, the sharing economy bestowed opportunities for Taxi drivers to make extra income for inescapable low periods of trade due to global financial woes.
Conforming to the EU Economic and Social committee, a report in 2014 indicated that the sharing economy represents immense alternates in times of turmoil (euractiv.com, 2014). Subsequently, the financial crisis has provided a vantage point for Uber to step in and seize the benefits acting as an intermediary between the users and providers. These driving forces behind the financial crisis within collaborative consumption, have harmoniously enabled opportunistic income and low cost, for both user and provider.