Ride Sharing Services: As Global Business Entities

Photo by bfishadow (CC BY 2.0)

Ride Sharing Service (RSS) business may be viewed the same as any ordinary taxi service, but it does more than a transport service. It provides dispatching services for passengers and drivers. The internet and online services have paved the way for disruptive services such as on-demand private transport and ride sharing. Drivers and riders are now using mobile applications to arrange a booking, payments and monitor locations.

However, RSS companies faced controversies and has been in the spotlight for the last five years including here in New Zealand (NZ). It is important for RSS organisations to recognize the issues and address five major areas of considerations to be more competitive in the international market place.

RSS Areas of considerations

RSS companies are now expanding their services at the international level, as global business entities, RSS organisations like Uber, Lyft, Taxi Magic must consider customizing its business and operational model to adhere to local/international policies and social/cultural norms. These organisations provide transport service to customers. Therefore, they must conform to transport regulations and policies.

There is no “one size fits all” business model that may apply in all of the countries where ride-sharing companies operate as each jurisdiction is unique. It is recommended to start focusing on the following areas:

Recommended Focus Areas
  • Legal and Compliance- RSS companies are mostly global business entities. There is a need to review its cross-border activities and implement actions on how to comply with local and international regulations relating to its business operations, tax obligations and licensing requirements of drivers. My previous blog covered this topic, it will be interesting to see how RSS companies respond to the legal issues they face in the present time.
  • Keep the lights on- Global ICT infrastructure is essential to any multi-national firms. Successful businesses use technology to operate. It is recommended for RSS organisations to establish a disaster recovery and business continuity plan to keep the business running and be prepared in the event of uncontrolled downtime.
  • Focus on customer’s needs- Provide customers with an option to select what type of service they require (e.g. booking options, driver profile, car, etc.). Also, as mentioned in my third blog, RSS companies need to start providing other booking channels and payment options to users who do not have credit cards or internet access. There are good business opportunities in reaching out to offline customers.
  • Adapting to cultural and social norms- Create flexible business and operational models to incorporate local norms (legal, cultural and social) where Uber operates. (e.g. accepted standards on driver gender, age, social status, etc.). Recommendations were elaborated more in my fifth blog about cultural and social considerations. There is a need for RSS companies to customize marketing and advertisement strategies based on cultural norms. Commercial ad campaign contents may vary per country.
  • Finance options- Leverage on the strengths of competitors and understand why customers prefer one over the other ride-sharing services. RSS companies must align service offerings and pricing structure to local market competition.

At the end of the day, if RSS companies want to succeed in the international market, the organisations need to be open and flexible enough to adjust their business and operational models based on the needs of its local market.

It has been an amazing three months unpacking the world of Ride-Sharing Services. I have learned a lot, and it has given me a different perspective about the sharing economy. I reckon these type of business models will continue to grow and evolve with the technology advancements.

There is a high demand for ride-sharing services, and it will only continue to increase. Regulators around the globe need to accept its existence and start implementing policies that are fair to all stakeholders.

RSS is not a bad thing. It is an excellent innovation and a positive disruption to the transport business. To maximize its potential in delivering benefits to consumers, proper management, operational controls and regulations must be in place.

Feel free to add your inputs on other considerations that can help RSS companies improve their services to the public.

References

Abdulsomad, K. (2014). The transformation of multinational corporations (MNCs) from an innovation perspective: some notes on the theories of MNCs. AI & society, 29(3), 415–426. Retrieved from http://link.springer.com.helicon.vuw.ac.nz/article/10.1007%2Fs00146-013-0467-x

Clark, D. (2015). China’s Moves Won’t Help U.S. Tech Firms; Weaker yuan will make American gadgets more expensive in China and Chinese ones cheaper abroad. Retrieved from http://search.proquest.com.helicon.vuw.ac.nz/docview/1707752723/70EAC29125BD49C0PQ/1?accountid=14782

Macmurdo, M. (2015). Hold Phone! “Peer-toPeer” Ridesharing Services, Regulation, and Liability. Retrieved from http://digitalcommons.law.lsu.edu/cgi/viewcontent.cgi?article=6546&context=lalrev

McGrady, E., & Blanke, S. J. (2014). Twelve best practices to mitigate risk through continuity planning and a scorecard to track success. Journal of Management Policy and Practice, 15(3), 11–19. Retrieved from http://search.proquest.com.helicon.vuw.ac.nz/docview/1558844752?accountid=14782

Uber (2016a). Our Trip Story. Retrived from https://www.uber.com/our-story/

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