A few days ago many cities were flooded by taxi drivers demanding a fair regulation of UBER operations in their country. Entering the legal discussion about UBER is not the point of this article. This article pretends to clarify how does UBER operates in order to allow readers to judge by themselves if a regulation on this matter is needed or if what we are really facing is nothing more than an innovative business model.

The first question that needs to be answered is: Are UBER drivers professional or are they just regular car owners? uberlogo_large_verge_medium_landscapeThe answer to that question is “both”. Depending on which city you are planning to drive in, UBER has different offers. For example, if you have a car and you’d like to share it while driving through Barcelona, the specifics your vehicle needs to have are different of those which would be requested if you wanted to drive through Melbourne or Abu Dhabi. Those demands can go from a maximum antiquity of your car to having a professional licence and an SUV. That allows us to find, at least, different drivers profile at UBER.

Another important question to ask ourselves is the next one: It is possible to earn as UBER’s driver? Can someone make a living out of this work? When we try to register as a driver in UBER’s web site, the title says “earn cash with your car”, which make us think that we can answer the first question of this paragraph affirmatively. The way this work is retributed is not described at their webpage, but as their main activity is to connect drivers with passengers, thinking that they don’t pay their drivers directly seems accurate. Anyway, it’s possible to earn as UBER’s driver. Making a living of it is a matter of dedication. If UBER will impose any limitation to the services a single driver can offer in a day, we do not know it. But this would be an important issue to distinguish their services from the service a regular taxi driver provides.

So, by connecting the points, we can see how UBER’s business model is based on avoiding fixed costs as they don’t acquire any infrastructure: it’s all based on owners (regular or professional drivers) who offer their cars to provide a service. When the service is provided by professional drivers, the line that separates their service from those provided by taxi companies is very thin. Anyway, both, either taxi drivers or professional UBER’s drivers, need a licence to provide their services. A regulation for private transportation would be tricky. It can be difficult to produce, as in many countries, a conflict with individual freedom is presented.

If a new law is needed or not is yet to be decided, but what’s clear is that UBER, by applying IT, is changing how a whole industry provides its service.


Image| UBER logo

Author Spotlight

Gustavo Eguren Gutiérrez

Gustavo Eguren Gutiérrez

Originally from Marbella, Málaga, Gustavo completed the double bachelor in Law and Business Administration in 2013 at University Carlos III of Madrid, within the scheduled time given by the strict academic calendar.

Recent Phsychology student at National University of Distance Education. Read Full

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