Is ride-sharing really as novel as it claims - Understanding Uber and its supply-side impacts in New Zealand

Abstract

In recent years, the emergence of multi-sided platforms has allowed peer-to-peer networks to grow exponentially, allowing individuals to form a collaborative economy by the sharing of underutilized resources. Within the realm of sharing economy, ride-sharing is the social phenomenon of allowing drivers and riders to congregate through a web-based platform to match the demand and supply sides in real time. The ride-sharing industry has posed as a major disruption to taxi industries worldwide. This paper seeks to investigate the industry dynamics surrounding Uber, a global ride-sharing company, in the New Zealand context, with main focus on the implications it has on the supply-side players (i.e. taxi companies and drivers) to evaluate if it has a sustainable competitive advantage in the market.

Uber is the first ride-sharing company coming to New Zealand, established originally in San Francisco. Due to various differences in the market and legal factors, Uber has adapted its business model to suit this unique environment. Although it does not position itself as a ride-sharing business in New Zealand, but rather a private hire service company, Uber is using the same tools and resources to pool drivers and riders together under its multi-sided platform. The main competitive advantages Uber brings are the convenience, flexibility to drivers and the lower cost to consumers. While more and more ride-sharing and taxi-booking apps join in the competition; while taxi companies begin to innovate to create a stronger differentiating factor; and while regulators start to narrow the gaps in the regulations where Uber is deemed to have been given unfair advantages; Uber is facing stronger competition and challenges in the New Zealand market incrementally.