General Information about Uber in England, France, Italy, and Germany - Case Study Example

The Uber Company Introduction (Background information) According to the Uber Para 2, the Uber Company is a multinational company whose headquarters is based in San Francisco in California. It develops, operates and markets a mobile application called Uber. The app is used in the transportation networking with prospective clients and it enables the client to make trip requests. The trend has been emulated by several companies in their business models. Moreover, its operations are in more than fifty-five countries and approximately two hundred cities. Some of these countries are Germany, Italy, France, England, Belgium and many more. The operations of the software entails members signing or registering for accounts, downloading the applications to their devices such as mobile phones after which the client can make a request. Payments of services rendered are not remitted directly to the drivers but through credit cards. The user in need of the services taps on the nearby Uber cab in the software app then jumps in and when the user gets to the intended destination, he or she remits payment in the debit automatic form. Uber is associated with Uber cabs which were founded by Travis and Garret. By the end of the year 2011 the company had raised relatively good amount of money to an extent of increasing its sphere of business influence by expanding services internationally. Its origin of operations was in the US after which it expanded to Paris in France before fledging its wings to the other European cities. However, their growth by expansion into the international market has not been a walk in the park. Several hurdles have surfaced and they still continue to encounter new hurdles despite their resilience in the dynamic competitive taxi industry. In addition, these hurdles have presented to the company economic challenges. The pricing of Uber services is relatively similar to that of the metered taxis. The only difference is that their technique entails remitting payment at the Uber itself as opposed to the metered method that encompasses giving the drivers the money. The other pricing strategy or technique that the company uses during high seasons such as holidays is price skimming or surging. The surged prices are relatively high in comparison to the other normal seasons. They use a computation algorithm mechanism which increases the prices of boarding their taxis. The surging mechanism has often caused outrage and critics from its consumers. The company is compelled at times to refund their clients while defending their actions that the population is yet to accept and embrace the system and that it will take sometimes for it to be holistically accepted (Uber Para 3). Besides the various complain, the company faces stiff competition from other startup companies who offer services of rider-share in terms of costs. This factor compelled the company to introduce the Uber taxi though the earnings of the drivers of the Uber limousine have been greatly affected (Mirren Para 4). General information about Uber in England, France, Italy, and Germany In England, the operations of the uber cabs have been marred by a lot of controversies. For instant, in 2014, members of Licensed Taxi Drivers association held a protest against Transport for London (TfL) in attempt to block the Uber’s modality of calculating transport fee in terms of time taken and distance covered. The TfL was limited by legal constraints that emanated from the risks of judicial review. The Uber cars that operate in London are UberXL, UberX, UberExec, UberLUX, and Uber TAXI. In France, When Uber availed UberPop, DGCCRF (a consumer protection agency) protested the ban illuminating that its services are shared rides and that ride sharing is prohibited in the country. However, UberPool service that was launched in Paris last year was perceived to be appealing to the French consumers. In Germany, the company operates in cities such as Berlin, Hamburg, Frankfurt, and Munich. Last year the company was accused to be operating vehicles that were not regulated. The drivers were unqualified, as well as the lack of adherence to insurance policies. In Paris and other cities the company operates the following services: UberBlack, Uber Taxi, and UberPop (Uber website). The company has also met equal share of protest in Italy. They were alleged to provide apps that allowed driver to non-professionally take passengers at prescribed budgets. The company operates in Milan, Naples, Rome, and Genoa. The car in Italy that the company manages are UberPop and Black Car (The Local Para 2). Tax medallion The investors on taxi medallion have been the other enemies of Uber especially in England. It was one of the causes of taxi operators strike though it was advantageously favored the Uber cabs despite the protest being solely on the economic front. At the time of protest the cost of a license for a taxi was approximately more than $ 200000. Dylan ( Para 4) argues that the company has the potential of operating as well as being rational in the business by doing away with the taxi medallion. He asserts further that such an action is bound to enormously reduce the cost of starting up the taxi business. Furthermore, it reduces the essence of purchasing a medallion. This consequently can lead to the reduction of the prices of medallion. In addition, there has been significant growth in the value of the medallion and the investment has been great. The regulation of the industry is so intense that actions like stickers on cabs are regulated or governed by laws governing cities. The industry has an inherent fear that the lack of medallions is consequential to cities losing control on the important services of the public though the Uber Company’s opinion or stand on the matter suggest otherwise. They perceive it as a creation of cartels for selfish benefits and not that of the public (Jordan Para 3). Introduction to the protests in those countries Several protests have been witnessed in these countries concerning the operations of the company. For instant, several taxi drivers protested in the cities of England citing the TfL’s inability to regulate the activities of the Uber firm. On the other hand, in Germany, several court cases were filed against the company’ failure to observe rules embedded in the operations of the taxi industry (BBC News Para 1). In France, consumer protection agency and other taxi operating companies held protests as well as strikes claiming the activities of the company were deceptive. Finally, in Italy, over two thousand taxi drivers from cities such as Rome, Naples, Genoa and Milan assemble at Turin to protest against the Uber app citing that it was creating unfair competition (The Local, Para 3). Uber operations in England Mirren (Para 2) reports that the company has been allowed by the transport regulator to continue its operations in London by asserting the legality of the company. It was a defiance of the perception of cab drivers who held protests across cities alleging that the Uber firm was stealing from them. These claims have led to the other vehicle hire providing companies to allege that Uber is stealing business from them. Other London cabs are adamant against the taxi apps offered by Uber Company. They are blinded by clouds of hunger on their perception of the lack of regulations on the use of the app. Last year they waged a mass protested concerning the Uber drivers tactics that allowed passengers to board their cars and negotiate the fare on their mobile phones(The week Para 4). The conflict in contention was that the TfL failed to hold into account the Uber services that contravened the regulations of the taxi industry. In addition, the company was also alleged as not being compliant to remittance of taxes. Moreover, there were allegations that the manner in, which the company was being handled by TfL was tantamount to many cabs causing chaos, congestion as well as confusion within cities. The other cab operators in Britain argue that Uber are not subjected to appropriate regulations in that the Uber cabs should be categorized as taxis and not minicabs. This argument was vehemently denied by the Uber Company as it elaborated that the company was not a transportation carrier. On the other hand, the response from TfL officials argued that the use of the app on devices was quite different from the convectional means in that the cabs were not embedded with the taxi meter. The TfL illuminated the findings of its investigation by making inquiries into the Uber’s business model. The findings according to the body revealed that the company had adhered to all the applicable rules. TfL gave the green light for the company in discussion to continue with its operations by highlighting that the share riding was free to continue. The managing director of the surface transport in London claimed that the understanding between the passenger and uber and between Uber London and Uber BV were registered in London and that it going about its operations within the law. This was not convincing since the technique enabled the company to evade laws regulating licensed taxis. The report from the Guardian highlights that the company should be regulated as there have been several protests, legal battles, and bans in cities such as Paris, Chicago, Washington DC and many more. Filtering these grievances into the screen of reality, the other cab companies crying foul that the Uber operations is thwarting their effort should readjust not only their stand but also their strategies to ensure they competitively edge their rivals. The climate of the taxi industry is fast changing and the Uber Company has innovatively realized a technique that is luring clients into their services. The strategy the firm has employed focuses on customers and more emphasis is being laid on customer service. The apps have enabled the company to have loyal consumers or clients since its operations are elastic in handling the needs of the customers. While they protest against the TfL, the Uber Company, on the economic scale becomes the beneficiary to such acts since it remains operational while other industries strike on grievances solely based on competitive age techniques. IBIS World’s Taxi operator market research (2015) report indicates that there is a significant increase in revenue as the consumer demand has been on the increasing trend. The industry consists of individuals who provide both the taxi and private vehicles for hire for the purpose of meeting the needs of personal or business transport in the country. The main challenges the industry encounter are high cost of input and fluctuating demands. The economic downhill due to factors such as the deflation has had a significant influence in the confidence of both business and consumers. As a result, there has been a dire effect on the tourism. The life cycle of the industry is viewed to be in the mature stage with the growth added value being anticipated to be relatively above the Growth Domestic Product (GDP) of the United Kingdom. Apparently, the taxi industry has significantly made an impact into the UK’s economy. They are mandated to provide safety, efficient and regulated services in reference to hiring vehicles. Statistics revealed that by August 2013, there were approximately 78000 licensed taxis operating in the kingdom (England). In 2007, the London Chamber of Commerce reported that the taxi industry applying services in London contributed an estimate of about 150 million pounds on lubricants and diesel; 25 million pounds on accessories and spares; 10 million pounds on tyres; 12 million pounds on the insurance services; and roughly 5 million pounds on batteries in the UK economy. Besides, the above computations excluded the amount of millions the industry spent on advertisement of their services. Moreover, the residents had spent an estimation of about 2 billion pounds on taxis on the annual basis. It is prudent to comprehend that the industry receives no subsidy from the public unlike other forms of public transport as the financing is through self-contribution. Companies that finance their investments independent of the public contribution need to be regulated to protect consumers from the likely existence of avenues of manipulation. Uber operations in Germany The operations of the Uber Company have been thwarted twice in the German courts on two scenarios after the Berlin Tax Association labeled accusations towards it. The initial ruling pointed out that the Uber’s limousine services had contravened the regulations governing the operation of taxis (Karin Para 4). On the second occasion, the services of the company were ordered to cease on accounts of safety concern. Moreover, they were slapped by fine of not complying with the stipulated regulations. The non-compliance account entailed the company’s defiance by using vehicles that were not regulated as well as their drivers were deemed unqualified besides not being procedurally and effectively insured. In addition to the two above-mentioned cases, mid last year, a court in Frankfurt gave a ruling that contradicted the banned on the operations of the Uber services exclusive of the Uber Black services (Mark and Melissa Para 5). This ruling illuminated that the case was filed late after the operations of Uber had been instituted. Last month, interestingly, the court issued a ban on all the services using Uber and UberPop applications. The violation of the ruling will accrue some fines since the drivers are accused of operating without the requisite requirements or licenses. The frustration through the judicial system has had economic impacts on the revenue and profit realized by the company. The brand of the company has significantly to some extent suffered through these battles thus minimizing the revenues that it would have optimized on. Moreover, several heavy fines have been levied against the firm thus reducing the value of the revenue obtained in the business. The ban on the operations of Uber Black and UberPop has also contributed to the drop in revenue and profit realization (Karin Para 4). Expelling the Uber services indicates the German’s rigidness to not only embracing technology and accepting change but also the lack of willingness for the mandated sectors to legislate on the regulations on the use of apps system in the taxi industry. Perhaps, some vested interest of the earlier beneficiary of the old system of the taxi operations are contributing to the predicament of the Uber (Mark and Melissa Para 4). Conclusion The Uber Company has provided the platform in which the taxi industry can develop. Its technique of incorporating the apps enables the clients to easily access them. This is pushing the taxi market to a different technique and level of conducting business. They should however, evaluate their activities since each market segment they walk into is characterized by critics, protests, strikes, and court proceedings. Work Cited: Kriston, Capps.What the U.S. Can Learn From Europes All-Out Uberwar. 2014. Web on 27th March 2015. Mark, Scott and Melissa, Eddy. German Court Bans Uber Service Nationwide.2014.Web on 27th March 2015< http://bits.blogs.nytimes.com/2014/09/02/uber-banned-across-germany-by-frankfurt-court/?_r=1> BBC News. Londons anti-Uber taxi protest brings traffic to standstill. 2014.Web on 27th March 2015< http://www.bbc.com/news/uk-england-london-27799938> The Week. Uber: why London cabbies hate the taxi app. 2014. Web on 27th March 2015 < http://www.theweek.co.uk/uk-news/58491/uber-why-london-cabbies-hate-taxi-app> Mirren, Gidda. Uber Gets Green Light in London After Massive Protests. 2014. Web on 27th March 2015 < http://time.com/2953528/uber-london/> Karin, Matussek. Uber Must Stop Car Services in Germany’s Two Biggest Cities.2014. Web on 27th March 2015< http://www.bloomberg.com/news/articles/2014-09-26/uber-faces-ban-in-berlin-after-overturning-german-wide-measure> Uber . The Company. 2015. Web on 27th March 2015 < https://www.uber.com/> The Local. Over 2,000 Italian taxi drivers in Uber protest. 2015.Web 27th March 2015 < http://www.thelocal.it/20150217/over-2000-italian-taxi-drivers-in-uber-protest> Jordan, Wathen. Medallion Financial Corp.: A Highly Leveraged Bet Against Uber. 2015. Web on 27th March 2015 < http://www.fool.com/investing/general/2015/03/25/medallion-financial-a-highly-leveraged-bet-against.aspx> Read More