The sharing economy is the answer to the "legacy economy" (Orsi, 2013), driven by aspirations including fair distribution of value that are more democratically organized, reduction of carbon footprints and the social call to bring people together in new ways ( Schor, 2014). However, since shared resources can vary widely, the underlying motivation for the existence of the sharing economy is often left open to debate. Some researchers believe that the sharing economy arises from the motivation around better economic efficiency where "consumers (or firms) give each other temporary access to their unused resources ('idle capacity')" in exchange for money.
As such, some scholars feel that the main motivation of the sharing economy is to achieve the ideals of sustainability by reducing unnecessary waste that contributes to the.
Uber and the ride-sharing business model
This situation provided the right opportunity for the rise of ride-sharing businesses, which are mainly focused on providing an alternative to public transport. The main merits of ride sharing for consumers include better prices, more choice in the market and more convenience (PricewaterhouseCoopers, 2015). Due to the advantages these businesses bring to the market, the new ride-sharing models have gained a massive market share within a short period of time, challenging their direct competitors – the taxi industries – in various parts of the world. .
Additionally, ride-sharing companies like Uber have also faced backlash regarding their contracts with their drivers.
New Zealand business and regulatory environment in relation to Uber Although ride-sharing businesses have generated much negative sentiment across the global
Anthony Kalamar (2013) has called "sharewashing", where ride-sharing platforms shift risk to employees under the guise of "sharing". In New Zealand, regulators are currently working with industry players and updating the regulatory framework to provide better coverage to manage the growing trend of ride-sharing businesses (Ministry of Transport, 2015). In New Zealand, Uber is currently the first and largest ride-sharing app provider, having started operations in Auckland in May 2014 (Stuff.co.nz, 2015).
In order to operate in New Zealand, Uber's business model has been modified such that instead of being a ride-sharing company, Uber has declared itself a Private Hire service under the license of.
6 Research design
Research objectives
This research investigates a specific sharing economy firm, Uber, limiting the scope to the New Zealand context because Uber has significantly adapted its business model in its New Zealand operations. This is an inductive research that aims to explore the dynamics between market players following the entry of Uber, with particular attention to market players in the traditional taxi industry. The aim is to assess the impacts Uber has on traditional taxi service providers, the labor market and regulators in New Zealand.
With the analysis, the investigation will move forward to evaluate whether Uber is truly a disruptor in the New Zealand environment or merely a new alternative to conventional taxi services.
Research methodology
The research would explore different perspectives of Uber by interviewing the key players in the existing industry. All questions were open-ended and were run as a guided interview. Unstructured interviews have helped to create the qualitative data that allow a full understanding of the interviewees' views.
The collected data must not become the researcher's own perceptions or experiences, but instead are interpretations of the participants in the study.
7 Research data
- Insights on the New Zealand taxi industry
- Uber’s effect on the taxi industry
- Regulatory issues surrounding Uber’s entry
- Uber driver-partners – Who they are and what motivates them
- Discussions
As mentioned earlier, Uber has caused a wave of negative feelings in the taxi industry around the world for stealing taxi drivers' jobs and circumventing strict taxi codes. Interviews with Combined Taxis and Green Cabs show that both companies experienced business growth in the past year following Uber's entry. In an interview with Uber drivers, about one in three Uber rides were driven by Capital Taxis drivers.
NZTA recognizes that there are some shortcomings in the current rules, which is why the Department for Transport has launched a Small Passenger Services Review of the rules around the taxi and private hire areas, where Uber currently falls in between. While the taxi community and regulators recognize the benefits of Uber's service offering, the immediate concern is the gap in regulatory coverage resulting in the ambiguity of Uber's legality. There are only two drivers who are from other professions, which make up the minority in the sample.
In the current situation, there is a fairly high barrier to entry for drivers to join Uber. This regulatory gap is likely to be closed in the current Small Passenger Services Review. There are three main competitive advantages that Uber has compared to its competitors in the New Zealand context.
Consumers also benefit from the lower price, as it is one of the main draws for consumers to use Uber in the first place. This practice is not currently present in the taxi industry in New Zealand, making this an extremely valuable and rare asset in the market. This advantage is also rare in the New Zealand context due to the rigid nature of typical taxi driver working arrangements.
Uber has strong control over its pricing model and has historically raised and lowered fares and fees to increase its profitability.
8 Conclusion
Nevertheless, flexibility is one of the main reasons why Uber is able to keep its costs down, and it is a defining characteristic of a peer-to-peer marketplace business. Finally, the low price of Uber is one of the most well-known advantages for consumers, caused in part by fewer regulatory costs. Although it is a valuable feature, offering cheap rides for commuting is not considered rare as there are many substitutes that consumers can go for to achieve the same goal.
Therefore, low fares are certainly not one of the characteristics to which it is committed. It appears that the environment is very supportive of the growth of the ride-sharing industry. However, from the VRIO analysis, it appears that based on the current environmental factors, these competitive advantages are not sustainable in the long run, as the business model can be easily imitated as it has already happened in many parts of the world.
In New Zealand, new apps such as Zoomy and Chariot have already appeared in the past year, with small differences from Uber, which compete in the same market. In short, ride-sharing has the potential to greatly change our consumption pattern from ownership to sharing, making our cities and our lives more economically efficient and creating a more sustainable community overall. But because Uber is very profit driven and is restricted by current New Zealand regulations.
Based on the analysis, it is predicted that if the regulations become more stringent, carpooling may lose a significant part of its competitive advantages as other industry players catch up with the technology. Given the rapid growth of the sharing economy globally, it is likely that the sharing economy concept will continue to grow in New Zealand and regulations will continue to evolve to allow sharing businesses to exist securely in the economy.
9 References
Boesler, M (2014) The rise of the rental and sharing economy could have catastrophic ripple effects | Business Insider. What is collaborative consumption - and what is not. http://www.fastcoexist.com/3046119/defining-the-sharing-economy-what-is-collaborative-consumption-and-what-isnt. Retrieved from http://www.cnbc.com lawsuits-facing-uber-lyft-could-alter-sharing- economy.html.
Retrieved from http://www.businessinsider.com/heres-everywhere-uber-is-banned-around-the-world-2015-4#ixzz3h9vI59Cl. Retrieved from http://cacm.acm.org/magazines how-traditional-firms-must-compete-in-the-sharing-economy/abstract. Retrieved July 28, 2015, from https://news.vice.com/article/not-everyone-is-a-fan-of-the-sharing-economy.
The rise of the rental and sharing economy could have catastrophic consequences | Business Insider. Retrieved from http://www.businessinsider.com/reputation-and-the-sharing-economy-2014-10?IR=T. Christchurch taxis are among the most expensive in the world | Stuff.co.nz. Retrieved July 28, 2015, from http://www.triplepundit.com/special/rise-of-the-sharing-economy/sharing-economy-really-catastrophic-impacts/.
Pridobljeno s http://www.stuff.co.nz/business/industries/69183393/police-drop-charges-against-16-auckland-uber-drivers. Pridobljeno s http://www.independent.co.uk/news/science/sharing-economy-wont- become-widespread-because-people-crave-their-own-material-goods-says-study- 10317074.html.
10 Bibliography
Appendix
- Interview script – NZTF
- Interview script – Combined Taxis
- Interview script – Green Cabs
The deregulation came about mainly because of the change of ideology in the government around that time. Insurance/Safety Issues - Understanding that all Uber drivers are mandated to have a p-endorsement license to get into the business, what are the regulators' take on the rest of the differences between Uber and taxi. insurance / safety requirements for Uber rides. It also has a GPS system that can tell where the car is, along with the identifications of the contractual parties.
Employment Classification Issues: Uber contractors are considered employees in the eyes of California, USA laws because it exercises sufficient control over its contractors. Currently, most of the taxi drivers are are independent contractors, so there won't be much difference between it and Uber drivers. In Australia, Uber occupies 5-15% of the market, while in New Zealand, Uber's market share is only about half a percent.
In other countries, 70% of Uber drivers are non-commercial drivers and the sharing model works better. Taxis are deregulated and New Zealand welcomes competition, provided that Uber adjusts its operations to address some of the problems they have operating within New Zealand. Non-commercial drivers will most likely not work with Uber due to the cost of only a small handful of rides.
Problem resolution rate: What is the significance of the role of the taxi company in the taxi ride contract. Many of the drivers (about 150 of them) are retirees who just want to take it easy. The company does not support the ideology of companies like Uber and does not want Green Cabs to take that position.
Given the commute time to and from a job, it doesn't seem worth the time.
