Uber’s Simplified Business Model that Brought a Huge Impact in the Taxi Industry

Arun Kumar | January 6 - 2017


Uber is grown to be one of the most desired taxi service providers using a smartphone app in recent times. The reason for the boost of the business is that they offer prompt service with superior comfort. Taxi drivers can use their own cars to offer taxi services and give a 20% share to Uber. The process involves a registered user placing a request for a taxi using the Uber app, a Uber driver is immediately dispatched to the passenger’s location and drops them off in the desired destination and receives payment using credit cards.

Nutshell of the Uber Business Model

Who can be a Uber Driver?
Anyone who owns a car and a valid driving license can apply to be a Uber driver in any Uber covered cities. After passing the screening test the driver is given a Uber iPhone and is all set to offer passengers with transportation services with no hazards of investment.

The Passenger’s user experience with Uber
The user can download the Uber app and register themselves, soon after the registration they can request for a taxi and have them picked from their desired location. The user can also track the taxi in their smartphone and enjoy a comfortable and safe ride with a relatively lesser cost.

Secure Payment Option
Uber sets the ride fares according to the peak hours and normal hours such as premium fare during peak hours and flat rates during off-peak hours. The fare is calculated based on vehicle type along with the distance and the payment can be easily made using a credit card and hence ensures the transaction is safe.

How is the profit divided?
Uber divides the share usually by giving 80% to the driver and 20% to Uber that lets the drivers earn far more better than the traditional taxi services. It is believed that Uber will reduce its profit percentage in all the city it operates in the forthcoming months.

Other advantages of Uber is that ordering is made very simple without any effort, vehicle types can be chosen as desired, simplified payment process, a transparent pricing and an accurate fare estimate for each trip makes traveling a better experience. The passenger feels safe and secure as the map allows tracking, and offers automatic e-receipts. With all the above mentioned benefits, Uber has made a benchmark in the taxi industry.