Amidst these growing problems between the taxi

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estimation to arrival, and safe accountability. Amidst these growing problems between the taxi  companies and riders, Uber was the first company to successfully fill the gap, and this first-to- market entry can be considered one of the major factors in its success since 2009.  Figure 1   shows the declining yellow taxi services and increasing Uber rides in New York City  (Schneider). In this white paper, we will discuss Uber’s basic business model and its advances  and complications in order to understand the position that Uber is current in. Especially, we will  focus on the core issues of the business model, in which it requires a critical mass of drivers who  are willing to drive and riders who do not want to wait too long for a ride. With other  competitors, such as Lyft amassing its driver and rider bases, we will examine the lowered  barriers to entry in the ride-sharing business model. As a result, with the relative ease to build its  fundamental business model and also with the lack of its product differentiation, we suggest a  solution for Uber to change its paradigm. By substituting a major factor in their cost scheme – 
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the drivers – to self-driving cars, we suggest a future direction toward becoming a true  transportation company with assets instead of a technological company that current simply  matches the drivers and the riders. Figure 1. NYC daily trips for Yellow Taxi, Uber, and Lyft Background and Current Status  Uber is the market leader in the ride-hailing business. Uber currently serves 83 countries  and 674 cities worldwide (Uber). In 2016, Uber has given out more than 2 billion rides with a  gross revenue of nearly $20 billion (Carson, 2017; Solomon, 2016). As of 2017, Uber is valued 
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at nearly $69 billion, and it has been estimated to occupy nearly 77% of the ride hailing market  ( Kokalitcheva, 2016; Abboud 2017 ). Uber’s continuous growth and success can be mainly  attributed to the fact that it was the first company to launch the idea of ride-sharing platform.  Since many customers were unsatisfied with the taxi services and wanted a better solution, the  launching of Uber quickly gained their attention and loyalty. This attention and loyalty is crucial  to companies like Uber, for they need a healthy user pool to reasonably sustain the supply and  demand, and since there were no other companies like Uber at that time, Uber was able to  accumulate a massive customer base in a short period of time. Now, to examine this success in  more depth, we will analyze the basic market and economics of Uber.
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  • Spring '08
  • Turnbull,S

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