Identify impacts of uber
Introduction
Uber is a transportation company that deals in transportation of people to and from different
locations in the city using taxi vehicles. Most of the taxis are hired but once the drivers are hired
they remain at the disposal of the company.
The impact of paying taxes would mean that the company operates efficiently to sustain the
competition between the rival companies. The extended margin of profit that Uber had due to
non payment of taxes has now been narrowed down to the normal profits that all the firms in the
market enjoy. The reduced returns would impact the company negatively as the extra income
would no longer be available. Uber would be compelled to operate with a deflated budget and
some rates would have to be reduced for example, the drivers’ rates would have to be readjusted
downwards as the company now has to pay taxes. The reduction in the rates of drivers’ payments
would be detrimental to the company as the drivers would be discouraged to work hard infact
some drivers would resign. The returns to the company may also reduce as the drivers would be
demoralized. The company may experience some losses in the short run but in the long run, the
goodwill created may add more value to the growth of the business and ultimately more returns.
Identify Impacts – Uber 2
Conducting regular training for drivers is not feasible unless Uber hires excess drivers enough to
replace the group that is on training. But it would very uneconomical and unproductive should
the management decide to go that way. However, its more expensive to retrain drivers on such
issues as ethical practices and general etiquette. The time and resources required would dictate
the number of times in a year that the drivers should undertake the refresher courses. The direct
impact of the exercise would mean more expenditure hence the possibility of incurring losses
due to the training are very high in the short run however, ones the drivers have been effectively
trained then they would be able to draw more customers hence increased profitability would be
experienced in future (Rossett & Sheldon, 2002).
Hiring drivers who are competent, well trained and with good references translates into one
conclusion and that is they are not cheap. The management must be prepared to invest in skilled
and well trained drivers who are professionals in their own capacity as taxi drivers. Polished and
well mannered drivers require drivers who are experienced and educated. These are drivers who
take instructions seriously and are committed to their work. The company must be prepared to
pay them well hence they would cost the company a lot of money initially but in the long run the
management would recoup the losses made when repeat customers keep coming back because of
the good services being offered by the company (Phillips & Phillips, 2002).
The decision to increase the prices for the taxi rides was abrupt and it resulted in a lot of losses to
the company. Taxis are public vehicles that require effective communication between the drivers
and their clients. When prices are increased then the public should be adequately notified and in
advance. Confrontation between the clients and drivers is the worst form of business relationship
that any right thinking investor would avoid like plague (Collins, 2012). Worse still, is the
surcharging of the drivers with any loss that may have resulted from some client’s inadequate
Identify Impacts – Uber 3
compensation for the taxi rides. The decision to reduce the fare was wrong in the first instance as
the management failed to plan for the high number of clients who would support the idea and the
abrupt cancellation of the offer and the reintroduction of the normal fares was ill advised and
unacceptable as the losses incurred outweighed the benefits that were achieved in the first place.
All the clients must have crossed over to their rival firms and the discouraged drivers only turned
their fury on the few remaining clients whom they threatened off with their reckless driving and
unethical language (Rossett & Sheldon, 2002).
The stakeholders require reliable, fast, well behaved drivers who are law abiding citizens. People
who are well groomed, respectful and reasonable. The management of Uber needs to conduct a
market survey that would eventually restore its lost image. The customers have a grudge with the
company. It’s unethical to increase fares especially for such facilities as taxi rides without
issuing adequate notice when in the actual sense most of the clients may have specifically chosen
the Uber taxis because of their cheap fares. But the worst was when the drivers insisted that the
clients must pay the new fares while the management sunk even lower by surcharging the drivers
when the customers refused to pay for the new fares. The management must be competent in
their decisions and there times when the profit maximization theories don’t apply. It’s prudent to
incur a little loss today for more gain in future.
Identify Impacts – Uber 4
References
Collins, D. (2012). Business Ethics. Hoboken, NJ: Wiley.
Phillips, J., & Phillips, P. (2002). Reasons Why Training & Development Fails and What you
Can Do About It. Training Magazine, September 2002 (pp 78-85).
Rossett, A., & Sheldon, K. (2002). Beyond the Podium: Delivering Training and Performance to
A Digital World. San Francisco: Jossey-Bass/Pfeiffer, p.67.
