Assignment on

Uber: Going Global from Day One

Course Name: International Business

Course Code: BUS 606
Section: A

Submitted to:
Piana Monsur Mindia (PMM)
Assistant professor

Submitted by:

Kazi Rajaul Islam 112 193 040

Hridoy Saha 112 193 060
Fahmida Sultana 112 191 036
Iqbal Parvez 112 191 032
Shamarat Rahman 112 191 003

Date of Submission: 10th July 2020

Question 01: Companies like Uber, Lyft (one of Uber’s main competitors), and Airbnb (an
online marketplace that enables people to lease or rent short-term lodging) are innovating in
fields that traditionally have been very complex and regulated. Can Uber’s business model be
applied in other industries globally?

Answer: Globalization has moved to the inflow of multinationals in many developing and
under developed countries with the advance technology and this process has increased and
influenced many industries. Uber model can be used not only in the Lyft or Airbnb but can
also be used in carrier pickups, delivery of foods and mails etc. It can also be used across
industries like in medical industry to provide emergency ambulances. Providing medical
services through apps connecting doctors and patients. It can be used in freelancing industry
as well. To provide a platform for provider of service and consumer.

Uber is providing one of the best model to its users to fill the gap between the service
provider and service user through a platform. This platform make the bridge and fill the gap
between the users and sellers of service.

However there are some industries, such as in banks and financial institutions and in
technology heavy production industries like aircraft manufacturing cannot use this type of
business model.

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Question 02: Are cities around the world doing a disservice to their citizens or their
visitors by banning Uber outright from operating in their community?

Answer: The needs of the people, as well as the tourists, need to be fulfilled, which is why
Uber was born. Being unable to take a cab on a snowy night in Paris made the two founders
of Uber realize the urgency of moving to big cities.

For citizens, the local ban on Uber is a mistake. Not only does not solve daily needs, the
battle of companies that want to use Uber's model to set up a new car company is a difficult
one for the authorities.

For the visitor, they are accustomed to using Uber every day, when in the city forbid Uber,
they will encounter many difficulties in travel. People who are not locals may not be fair in
price when going to traditional taxi firms. They may feel uncomfortable, and will not choose
to travel to that city anymore.

Banning Uber outright from operating in the community obviously impact badly on the
citizens and visitors. The very first thing is about the price. After the cities ban Uber, people
have to use traditional taxi and the price per kilometer of the traditional taxi companies is
much more expensive than Uber’s. For example, in Hanoi, the average price per kilometer of
traditional taxi companies is around 13.000 to 17.000 VND and the fare of Uber is around
9.000 VND per kilometer. Thus, Uber app will notify the price of that trip so the riders will
know exactly how much the trip costs. Secondly, the customers can follow the routes on the
map; therefore, they won’t be afraid of being cheated. On the other hand, the traditional taxi
drivers sometimes just goes around in order to increase the fares. That usually occurs to
foreigner visitors. Lastly, when Uber is out, the number of cars in the cities will decrease
sharply. Because when Uber still works, a great number of people who have cars applied for
a job; when it’s out, these people will be out. Consequently there will be lack of cars when
the population in the cities is increasing dramatically.

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Question 03: Uber’s strategy has been to break these regulations, establishing its service
first, and then fighting attempts by regulators to shut the service down. This goes along with
the old saying that “do first, ask questions later.” Is this business approach viable globally in
the long run?

Answer: The old saying “do first, ask questions later” might not work well in the long run.
In the beginning, the companies which establish first and then fight attempts by regulators
will be very successful. But eventually in the long run, often these companies will meet the
protest of the competitors as well as the governments. In many countries, when Uber faced
problems with the governments or regulating committee, it generally uses riders/loyal
customers to pressure local governments to change the law in the favor of the company and
allow Uber to offer its service with less or no hindrance. That act leads to the consequence
that lots of laws had been enforced or introduced by the government to limit Uber or in some
countries, Uber was banned by the government and eventually had to close down the business
and leave. Uber has difficulties not only with the governments but also with the competitors
in the local area. Because of the strategy, Uber is not welcomed in many countries;
therefore, Uber’s local rivals such as Fast Go in Vietnam, Didi Kuaidi in China, etc. get
lots of help from the local governments (some aspects like income tax, fee of facilities using,
market advantages). Consequently, Uber would compete failed with the local rivals and in
the long run, this business is not able to approach viable the local markets. Ultimately it can
be concluded that business approach is not viable globally in the long run because certain
factors needed to be considered to be viable globally and Uber certainly misses quite of them.
To be a business approach viable globally firstly it has to be profitable and to become
profitable, the companies either has to raise revenues, lower costs, or enter a brand new line
of business. A ride-hailing firm has the following options to increase its profits:

 Increase the number of rides keeping the costs same.

 Increase the price of each ride having the same market share.
 Decrease the amount drivers get paid per ride.
 Enter a new line of business besides the existing line of business.

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Secondly, ride-hailing firm starts off smoothly but fails to maintain the continuity in growth.
The trouble with both taxis and other transportation options is that they have limited sources
of growth. If the companies drove traditional taxis out of business in New York and took the
rides in about the 75/25 ratio of their current sizes relative to each other, they would both
grow by about 50 percent. This would replicate growth Uber and Lyft achieved in the 18
months starting in January 2017, not exactly a limitless well. Other transportation options
also supply primarily limited growth. Many short distance walking or long distance travel
trips would not be economical for Uber or Lyft to provide. And if the companies stole more
than a little market share from NYC public transit, excessive congestion would lead to
nobody on the city’s roads finding any trip economical.

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