Social Changes Leading to Rising in Uber - Case Study Example

UBERIN AUSTRALIA Student’s Name Date of Submission INTRODUCTION In Australia this ride sharing application has made a very significant entry into the market despite being considered illegal in majority parts of the country (James, 2015). The author attributes this to the fact that UberX offers qualities which other taxis could not compete with, for instance it is cheaper, friendlier, cleaner and more efficient therefore making it more likeable to its clients. However due to the aggressive nature of entrance into any markets local taxi industries normally influence their government into standing in the way of this mode of transport using their significantly huge influence over their governments. According to James (2015), since the service was launched in Australia as much as 11% of the population in its capital, Sydney, have used the service during its first six months of its operation. However the author points out that the NSW Transport Department had been taking UberX drivers to court for breaking the law requiring drivers and cars to be licensed. According to Nassim (2015), governments have a levy on consumers buying milk when diary reforms were introduced in NSW and ACT so the same should apply to the taxi industry whenever new players such as UberX enter the market. Discussion Are Reforms By Act And Nsw Sufficient It is first important to know how Uber affected taxi business in Australia necessitating the reforms by ACT and NSW. According to James (2015), whenever Uber is introduced in a given geographical area it is detrimental, for instance in San Francisco it contributed to a 65% decline in average trips per taxi. According to the author an analysis by a personal blog known as Pocketbook ,came to the conclussion that in every $12 spent on taxis in Australia, $1 of its goes to Uber. According to ACT (2016), the new reforms are supposed to offer economic benefits to the territory in the sum of $3.5 million per annum after five years. The Australian Capital Territory (ACT) proposed regulatory frameworks which will also includes a rank of vehicles or drivers authorization documents and a function which is based on the notifications by respective services to address the following risks in the industry: taxis will operate in rank, hail as well as booked sector either independently or through a booking service, secondly hired cars will only provide booked services but can either operate independently or through a transport booking service and lastly ridesharing will be able to work as a booked service through a transport booked service. The reforms are to be delivered in two phases (ACT, 2016). In the first phase which is an interim stage that will allow any authorized ridesharing service such as Uber and any other such innovatory service aiding in booking to following the strict guidelines already placed. For instance, all drivers must do a criminal history search and drive history checks. This stage which officially began on 30th October 2015 will also see an immediate reduction in fees for anyone to hire or for taxis. In the second stage which is concerned with the introduction of new laws into Legislature for the introduction of full suite reforms such as driver accreditation and reduced regulation for taxis and hire car. The changes are significant but some areas are still contentious. For instance corresponding to NSW Taxi Council (2016), the decision by NSW government to redesign structure of taxi, hire car and other similar services will have an effect on the industry and therefore advised the government to work through it carefully with all stakeholders including customers and drivers. Another area of concern is that taxis are given exclusivity in accessing taxi rank and hail passengers, this action requires enforcement however there are no details on how such an uphill task will be enforced. The council notes with concern that previous actions such as on illegal taxi services have not been adequately enforced. Scocial Changes Leading To Rise In Uber There are two societal changes that have resulted into the rise in usage of Uber. One of the reasons is the huge demand by the society in general to live the life portrayed in entertainment world. The other reason is that society today tries to be technologically savvy as much as possible, everyone wants to use the most advanced or latest application software or technological hardware in the market. According to Eugene (2014), today taxicabs in many cities and are integrated into many cultures for instance it is a symbol associated with any associate working in New York. It has been integrated in many movies and music videos as glamour of some kind. Currently, there has been a development in the taxi industry known as ridesharing which is a diverse concept known as sharing economy. Uber’s ridesharing rose due to its convenience and by the fact that is based on a technological platform. Society has encouraged the wide acceptance of this new way because in most countries people tend to be more driven towards new technological advancements as proven by the rise of Uber especially in San Francisco which according to Nathan (2015), the company made a huge entrance into the market especially in San Francisco due to the fact that you could call for a cab using a simple procedure as a button press with a smart phone. The trend currently is that people are obsessed with any new technology that offers a new digital way of doing something. This is further proved by John (2015) who point out that Uber is enjoying support in Australia simply because politicians are rushing and willing to accept anything that is digital Society has become more and more obsessed with the life in entertainment world this coupled with the need to be technologically savvy has resulted into rise in Uber. Traditionally taxicabs have been expensive for most of people, the thirst for life in entertainment world and technology has driven society into following Uber and such technological platforms that enable ridesharing. Are These Reforms Good For The Economy The reforms are beneficial to any economy due to the fact that Uber is bigger than most economy sharing platforms therefore the input into any economy may even be bigger than from traditional methods. Uber just like any sharing economy platform destroys traditional methods of any business. In most cases this brings less amount of money compared to other methods. According to Georgios (2016), by the sheer fact that it brings together people needing the same thing online, creates an efficiency that comes at a cost for traditional economy. For example, instead of buying a power drill which you just need for fifteen minutes a sharing platform will allow you to rent another person’s; resulting to reduction of profits for huge manufacturing companies that support more people therefore an impact to an economy. However Uber is not just any economy sharing service, consistent with Georgios (2016) it was valued at $68 billion just after 6 years being able to surpass other traditional transportation companies like Hertz and Avis. Therefore in terms of input to the economy legalizing Uber and restructuring it will result in an equal input into the economy if not more than. Conclussion In conclusion the reforms made in Australia are beneficial to any economy because the economy will improve and services to the population will be made more efficient and better. The reforms in Australia are instrumental however some of the inefficiencies caused by it must be met as noted by NSW Taxi Council noting the implementation must be done gradually. REFERENCES ACT Government. 2016. 2015 Taxi Industry Innovation Reforms. Sourced from http://www.cmd.act.gov.au/policystrategic/regreform/2015-taxi-industry-innovation-reforms/additional-background-information/supporting-analysis Eugene, S. 2014. History of Taxi Industry. Retrieved from https://taxistartup.com/blog/6-key-success-factors-behind-uber-growth/ Georgios, P. 2016. Uber and the Economic Impact of Sharing Economy Platforms. Retrieved from http://bruegel.org/2016/02/uber-and-the-economic-impact-of-sharing-economy-platforms James, L. 2015. UberX versus Taxis: Why the time for taxis is over. Retrieved from http://www.news.com.au/finance/business/travel/uberx-versus-taxis-why-the-time-for-taxis-is-over/news-story/cb1e2d9dc77aa29dd88646cbae1d5d4e John, M. 2015. Uber is Winning the Australian Taxi Lobby. Retrieved from http://m.smh.com.au/business/the-economy/uber-is-winning-its-war-with-the-australian-taxi-lobby-20151220-gls80m.html Uber. 2016. Our Story. Retrieved from https://www.uber.com/our-story/ Nassim, K. 2015. Uber Arrival May be Ground for Compensating Taxi Industry: Harper. Retrieved from http://m.smh.com.au/business/the-economy/ubers-arrival-may-be-grounds-for-compensating-taxi-industry-harper-20150414-1mkrdx.html Nathan, M. 2015. Here’s How Uber got its Start and Grew to Become the Most Valuable Startup in The World. Retrieved from http://uk.businessinsider.com/history-of-uber-and-its-rise-to-become-the-most-valuable-startup-in-the-world-2015-9?r=US&IR=T NSW Taxi Council 2016. NSW Taxi Council Responds to Point to Point Reform. Retrieved from http://www.nswtaxi.org.au/news/nsw-taxi-council-responds-point-point-reform The Guardian. (2015). Uber to be Legalized in NSW, with compensation for Taxi drivers – reports. Retrieved from https://www.theguardian.com/technology/2015/nov/23/uber-legalised-nsw-compensation-taxi-drivers Read More