Despite Uber\u2019s scale, the company has a simple business model: connect drivers with people who seek rides. Uber positioned itself as a partner for anyone with an automobile seeking to earn added income. Whenever a ride is facilitated, Uber charges a 20-30% commission for the ride and the driver receives the remainder.[4]<\/a> In terms of its operating model, Uber focuses on optimizing its software to facilitate the highest possible number of completed rides. To further achieve this, the company also engages in systematic marketing efforts to recruit drivers onto their platform.<\/p>\n <\/p>\n \u00a0 <\/p>\n Uber frequently claims the\u00a0role of\u00a0an \u2018economic impactor\u2019 that adds 20,000 jobs every month.[6]<\/a> However, drivers are Uber\u2019s largest cost.[7]<\/a> Therefore, the promise of \u2018self-driving vehicles\u2019, a technology made possible by advances in machine learning<\/strong> (ML)<\/strong>, have become a primary focus for Uber. \u201cBy early 2016 [Uber] had recruited hundreds of engineers, robotics experts, and even a few car mechanics to join the venture. The goal: to replace Uber\u2019s more than 1\u202fmillion human drivers with robot drivers\u2014as quickly as possible.\u201d[8]<\/a> The focus on autonomous vehicles (AVs)<\/strong> is transforming Uber\u2019s business and operating model. First, Uber is deconstructing\u00a0its strategic reliance on\u00a0drivers and replacing that side of it’s business with automotive company contracts. Secondly, Uber is pushing to be more than just a consumer transportation business.<\/p>\n Because Uber does not intend to manufacture\u00a0AVs, it is implementing a series of strategic partnerships within the automotive industry. Last year, Uber announced a $300 Million deal with Volvo to develop AVs for the business.[9]<\/a> These vehicles are already being tested on the roads of Pittsburgh.[10]<\/a><\/p>\n <\/p>\n <\/p>\n Moreover, Uber reportedly ordered 100,000 Mercedes S-Class cars to integrate with autonomous capabilities.[12]<\/a> These actions represent a fundamental shift for a\u00a0business which has never managed an inventory of vehicles.[13]<\/a> Uber has been developing the software to power self-driving automobiles by aggressively recruiting elite ML engineers.<\/p>\n \u201cCarnegie Mellon University is scrambling to recover after Uber Technologies Inc. poached 40 of its researchers and scientists earlier this year, a raid that left one of the world\u2019s top robotics research institutions in a crisis\u2026 Flush with cash after raising more than $5 billion from investors, Uber offered some scientists bonuses of hundreds of thousands of dollars and a doubling of salaries to staff the company\u2019s new tech center in Pittsburgh.\u201d[14]<\/a> \u2013 The Wall Street Journal<\/p>\n Uber\u2019s focus on launching an AV fleet is shifting the company\u2019s business model past being a consumer taxi\u00a0service. Specifically, Uber is transforming from an on-demand transportation company to an autonomous logistics business. In this new model, humans become just one of the many items\u00a0being\u00a0transported. This summer, Uber spent $680 Million on Otto, a startup building autonomous technologies for big-rig trucks. Uber intends to enter the freight hauling industry by offering driverless trucks to businesses.[15]<\/a><\/p>\n <\/p>\n <\/p>\n Secondly, Uber has recently \u201claunched a global assault\u201d on the food delivery market as it begins launching UberEats in 22 countries.[17]<\/a> As Uber works to put more AVs on the road, it is not difficult to conceive of a future operation in which Uber’s AVs\u00a0deliver an array of other products to customers and businesses.<\/p>\n The AV revolution has fundamentally shifted Uber\u2019s business and operating models. Uber is deconstructing the driver side of its two-sided marketplace. If not properly managed, this could have severe consequences for the business. Due to regulatory restrictions AVs are not expected to be \u2018fully autonomous\u2019 and on the road until closer to 2030.[18]<\/a> Therefore, for the next ~10 years\u2019 drivers will remain an integral part of Uber. I think Uber needs to do a better job of framing its AV investments in relation to its drivers. These ventures have generated extensive press and this will likely have a negative impact on driver loyalty. Therefore, Uber needs to begin marketing its vision for the future of its drivers once AVs replace their jobs. For the near future, drivers are the foundation of Uber\u2019s business model and they have the ability to damage\u00a0the value of Uber\u2019s business if they leave.<\/p>\n \u00a0<\/strong>(Word Count: 788)<\/p>\n [1]<\/a> \u201cUber.\u201d CrunchBase. https:\/\/www.crunchbase.com\/organization\/uber#\/entity<\/a> Web. 16 Nov. 2016<\/p>\n [2]<\/a> Sorkin, Andrew Ross. \u201cWhy Uber Keeps Raising Billions.\u201d http:\/\/www.nytimes.com\/2016\/06\/21\/business\/dealbook\/why-uber-keeps-raising-billions.html?_r=0<\/a> New York Times. Web. 14 Nov. 2016<\/p>\n [3]<\/a> Uber. https:\/\/www.uber.com\/helping-cities\/<\/a> Web. 15 Nov. 2016<\/p>\n [4]<\/a> Ovide, Shira. \u201cUber May Be Making Too Much Money.\u201d https:\/\/www.bloomberg.com\/gadfly\/articles\/2016-10-05\/uber-s-outsize-commissions-leave-it-vulnerable-to-competition<\/a>. Bloomberg. Web. 16 Nov. 2016<\/p>\n [5]<\/a> Uber Newsroom. https:\/\/newsroom.uber.com\/an-uber-impact-20000-jobs-created-on-the-uber-platform-every-month-2\/<\/a> Web. 14 Nov. 2016<\/p>\n [6]<\/a> Ibid.<\/p>\n [7]<\/a> Edward Taylor, Harro Ten Wolde. \u201cUber Seeking To Buy Self Driving Car: Source\u201d http:\/\/www.reuters.com\/article\/us-daimler-uber-idUSKCN0WK1C8<\/a>. Reuters. Web. 15 Nov. 2016<\/p>\n [8]<\/a> Chafkin, Max. \u201cUber\u2019s First Self-Driving Fleet Arrives in Pittsburgh This Month\u201d http:\/\/www.bloomberg.com\/news\/features\/2016-08-18\/uber-s-first-self-driving-fleet-arrives-in-pittsburgh-this-month-is06r7on<\/a>. Bloomberg. Web. 14 Nov. 2016<\/p>\n [9]<\/a> Greg Brensinger, Jack Nicas. \u201cUber to Put 100 Autonomous Volvo SUVs on Road in Pittsburgh\u201d http:\/\/www.wsj.com\/articles\/uber-to-buy-self-driving-truck-startup-ottomotto-1471528978<\/a>. The Wall Street Journal. Web. 16 Nov. 2016<\/p>\n [10]<\/a> Brewster, Signe. \u201cUber Starts Self Driving Car Pickups in Pittsburgh\u201d https:\/\/techcrunch.com\/2016\/09\/14\/1386711\/<\/a>. TechCrunch. Web. 15 Nov. 2016<\/p>\n [11]<\/a> Golson, Jordan. \u201cVolvo and Uber ink deal to develop \u2018base vehicles\u2019 for autonomous cars\u201d http:\/\/www.theverge.com\/2016\/8\/18\/12541672\/uber-volvo-partnership-autonomous-self-driving-car<\/a>. The Verge. Web. 16 Nov. 2016.<\/p>\n [12]<\/a> Ibid. (7)<\/p>\n [13]<\/a> Ibid. (7)<\/p>\n [14]<\/a> Mike Ramsey, Douglas MacMillan. \u201cCarnegie Mellon Reels After Uber Lures Away Researchers\u201dhttp:\/\/www.wsj.com\/articles\/is-uber-a-friend-or-foe-of-carnegie-mellon-in-robotics-1433084582<\/a>. The Wall Street Journal. Web. 15 Nov. 2016<\/p>\n [15]<\/a> Russell, Jon. \u201cUber-owned Otto to offer freight hauling services using autonomous trucks in 2017\u201dhttps:\/\/techcrunch.com\/2016\/09\/27\/uber-otto-freight-services-2017\/<\/a>. TechCrunch. Web. 16 Nov. 2016<\/p>\n [16]<\/a> Davies, Alex. \u201cUber\u2019s Self-Driving Truck Makes Its First Delivery: 50,000 Beers\u201d https:\/\/www.wired.com\/2016\/10\/ubers-self-driving-truck-makes-first-delivery-50000-beers\/<\/a>. Wired. Web. 17 Nov. 2016<\/p>\n [17]<\/a> Auchard, Eric. \u201cUber launches global assault on takeaway meals market\u201d http:\/\/www.reuters.com\/article\/us-food-delivery-idUSKCN11W2LX<\/a>. Reuters. Web. 17 Nov. 2016<\/p>\n![\"Uber](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/an_uber_impact_20141-156x300.png\")
<\/a>[5]<\/a><\/p>\n![\"Uber](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/194844_Volvo_Cars_and_Uber_join_forces_to_develop_autonomous_driving_cars.0-300x200.jpg\")
<\/a>[11]<\/a><\/p>\n![\"otto\"](\"https:\/\/d3.harvard.edu\/platform-rctom\/wp-content\/uploads\/sites\/4\/2016\/11\/Otto-300x225.png\")
<\/a>[16]<\/a><\/p>\n