Uber's business model involves earning commissions from rides, typically 20% per ride. It determines pricing and surge pricing to adjust for supply and demand. Uber also earns through loans to drivers and leasing cars. Its app connects drivers to riders through GPS, using algorithms to provide pricing and match supply and demand. This simplified the taxi experience. Drivers benefit from more customers, while riders benefit from prepaid rides without tips. Uber has proven resilient despite regulations and protests. Its diverse, dynamic workforce and equilibrium between flexible supply and demand have allowed it to adapt. However, surge pricing can burden customers, and Uber relies on incentives to maintain an adequate supply of drivers. It must balance prices to sustain growth.

1. UBER
A1) Business model- It earned through commissions typically 20% of the ride. Uber decided what would be the
price/mile and also the minimum fare. The surge pricing is also decided by Uber which is typically 1x to 2.8 x(earlier it
was 1x to 7x ) . Another way for Uber to earn money was through financing. Drivers who wanted to join Uber but
couldn't afford to buy a car were offered a loan .Although numbers were not disclosed as to how many loans they gave
but Exhibit 9 gives us the population demographics and we see that 18-29 age group constituted about 19.1% workforce
which would require financing for purchasing a car. Uber also earns through leasing through companies like enterprise
car.
Uber claims to be a technology platform connecting drivers to customers. It took advantage of the Smartphone's GPS to
its leverage by building a mammoth architecture using sophisticated algorithms which informed the drivers as well as
the customers of each other including the prices that might be charged. Customary , if we want to book or hire a taxi
either we will call the driver or go on the streets and look for a cab. Uber channeled this information through the use of
Smartphone. In fact , it even incorporated the concept of demand and supply . Earlier passengers preferred public
transport because of high costs of taxis. Uber transformed the way people thought about taxis and coerced them to take
Uber rides by giving them cheap fares and because of ubiquitous nature . The whole process of picking up and dropping
was made extremely simpler. For riders because it was prepaid system(people had to supply information of their credit
card into the Uber app) they did not worry about tip .For drivers it was a haven as once the sluggish sector gathered
momentum. There was a steady inflow of customers. Although Uber took 20% charge but even then drivers saw it
profitable because of a larger bandwidth of customers. Drivers could chose their working hours , ask for loan from Uber
for purchasing a car and most importantly they got liberated from medallion system.
A2)Uber's model is very resilient .It survived so many legislative orders, strike and protests by taxi unions and
government regulations. Good judgment from management and innovation are the two pillars to which this sturdiness
can be ascribed. When there was a legal notice from Transportation Enforcement Section Uber just changed the name
from Ubercab to Uber . Its workforce is so diverse and dynamic that on any particular date customers can be served .
One important thing to notice here is that neither the customer base is fixed nor the workforce(taxi drivers)but even
then the demand and supply work near equilibrium . Uber's model has some weak links .The surge pricing policy gets
activated when there are shortage of drivers to meet customer's demand. A prospective customer has to pay extra . It's
the duty of Uber to maintain the equilibrium . Uber can only reinforce the supply of drivers by giving them incentives
and price hikes . To protect taxi union interests some countries have banned Uber to work . Here except lobbying there
is nothing they can do . Some countries have restricted foreign investments . The threat of a new entry is minimum but
companies such as Lyft have evolved and have grown even in the presence of Uber.For sustainable development Uber
has to keep price minimum or at the modest level.
A3)The surge pricing policy was concocted by Uber to meet the demand and supply gap.
Without surge pricing1)Prices would remain flat . Customers would be knowing the prices mentally before even booking
the cab and would not be alarmed when they are billed. 2)Drivers would not be earning profit during peak hours in
which surge was activated.
With surge pricing 1)Prices would increase for customers. Seeing such high prices customers might chose other means
of transport. 2)Profitable for drivers as now they would be getting higher wages .
Surge pricing cannot be de-activated because to serve riders drivers have to be incentivized. Uber should consider
option to decrease it commissions instead of shifting the burden customers. It is extremely unlikely and only in the
rarest of cases people would consider to spend three times the normal rate .My opinion is there should be a blend of
surge pricing and Uber cutting it's rate to accommodate the increased prices .
A4)

2. Short-Term strategy Long-Term Strategy
1)Even if operational income and net income are
not positive no need to worry. Use money to
expand and gain access to markets all over the
globe.
2)Control the surge pricing and make necessary
changes in the business model so that customers
are enticed and Uber never lose their market share
1)Once it establishes footholds across the world it
should make an IPO.
2)Since it is a supply and demand market
interwoven with technology they should move to
similar logistic models.
3)As mentioned in the case study they are
considering various options involving logistics such
as UBER EATS and UBER FRESH. They should
certainly try these experiments because sometimes
customers even don't know how they want a
particular service to be done (no one anticipated
the invention of UBER and FB).