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Literature Review - Risk Management of Uber

Question: Prepare Literature Review on Risk Management Of Uber.



UBER POOL is defined as a system that was designed to facilitate cab service to passengers heading towards the same direction. In this system, customer service gets relaxation of paying full fare, rather they pay a part of the fare by sharing the ride with other passengers. In a survey, it was highlighted that sharing rides is more acceptable by customers as it tends to cost less, despite of offering a similar service value to the customers (Schwieterman, & Smith, 2018). The pricing system of UBER POOL is almost 20 to 50% less as compared to the regular UberX trips. The standard fare of this service is dependent on numerous factors such as the number of passengers, time of day, mileage, and distance. Further, UBER POOL is preferable than UberX because it achieves more trips at a time, saves fuel, reduces pollution, reduces traffic congestion and provides better-earning opportunities. UBER POOL is also introduced in Australia, Sydney in April 2018 and since then, this marketing opportunity is making a success in the transport industry. At present UBER POOL is the prime provider of ride-sharing services in Australia. Unlike the taxi services, this service makes the transaction to electronic payment and there is minimal waiting time for customers. Despite these positive aspects, there exist some risks the carpooling service in the Australian market. The present report has illustrated these risk factors and the mitigation strategies adopted by this transportation archetype. Some of the potential risk factors discussed in the research report includes, customer security, driver's distraction, and taxation policy.


Literature Review

The discussion of these contents are primarily based on a previous research paper. The objective in this context is to identify the risk management procedures, in the previous study and a summarized version of the previous research paper will be addressed in this research paper.

The passengers carry money and other valuable assets with them, and there is a high risk of getting things stolen.In addition to this, they can be drunk or aggressive in nature which is a risk factor for other passengers and the drivers (Geradin, 2015).According to the report of Pratt et al (2019), the ride sharing giant Uber has been reported of 215 sexual harassments (including both men and women) by the year 2017. This data reveals the lack of security aspects in Uber for the passengers, especially for female passengers travelling in night.

Despite of lower travel price, the UBER authority should maintain better security for the passengers to build a strong and trustworthy relationship. The study will research some key issues that need to be solved to operate the facility successfully in long run in Australia.

In this context, the Uber company should verify the authenticity of drivers and passengers before any ride. While hiring a driver, the company should verify all relevant records such as, past criminal records, authentic driving license, proper communication skills, and good behavior (Geradin, 2015). Similarly, while confirming any passengers for the pool ride through the Uber application, it is the responsibility of the company to ask for a soft copy of verification or identify proof while booking. These security measurements of collecting passengers record and installing CCTV cameras create fear among the passengers before committing any criminal activities.

Besides the security issues, Passengers also face some other travel issues in UBER POOLservices. Sometimes, with more number of passengers and varying journey routes, the customers who were picked up first were dropped last. This makes the journey tiresome and cheated for the price charged. This situation usually occurs when Uber books customers having different journey routes, and are far away from each other.

The constant additions of customers to the app divert the attention of the Uber drivers from the road. In certain cases, the diver has to opt for risky manoeuvres on the city streets. They are already prepared to take one specified lane for the journey, however, the Uber adds another passenger who is located on the opposite lane. In such a situation, the driver needs to quickly figure out a new route or any shortcut path to pick up the newly added passenger. The passengers who are already inside the cab are in a hurry situation to reach their destination. Thus, there is constant pressure on the driver from the existing and the new passenger for dropping the existing passengers and picking the new passenger, which creates a high risk for car accidents.

The ideal solution for risk associated with the distraction of drivers is to provide the option put them for taking additional passengers or not. It isn't obvious and logical solution where the drivers can choose passengers based on their current locality and existing customers need. Eventually, it reduces the additional stress level on drivers and subsequently reduced the risk of an accident and existing passengers can reach their destination on time.

Moreover, Uber should also provide education for cab drivers that include car driving skill, behavioural skill, communication skill, and character test, and travel safety information. More than Uber, cab drivers are at a higher position to minimise and restrict the risk. Therefore, educating drivers is considered as the foremost responsibility of the company (MacEachen et al. 2018).


In most of the time, the Uber pool service is much cheaper than the traditional taxi service and its app is quite being easy to use. This attracts more number of customers to choose the Uber pool service. However, there is also another risk associated with the service which affects the customers as well as drivers. At time peak hours, when the demand of rides is high and the supply of drivers is low, then Uber impose surge price. The surge pricing is defined as a factor which is multiplied against the fare rate. Upon requesting for UBER POOLride in the app, the customer will be notified with the surge price effect. It depends upon the customer to either choose Uber service with surge price or go for any other cheaper transportation option. This strategy of the company creates a negative impression on customer's mind and reduces its potential customer base eventually. In order to mitigate the situation of driver shortage in peak hours, it could hire part time cab drivers who could work only during high demand. These drivers will be paid high on hourly basis to pick and drop maximum passengers to their specified destination. This solution not only facilitates customers to get Uber pool service at time at minimum price, but also creates the employment opportunities for more cab drivers.

In order to sustain the corporate values, it has become critical for Uber to immediately recognize any unlawful is illegal activity that has impacted the driver or customers in a particular location. In such a situation, the Uber team should remain alert and immediately respond to ensuring the safety customers and drivers, to maximum possible alternatives at minimum cost. For this purpose, Uber should increase the pricing for the drivers, in turn, the respective owners or car drivers can improve the security features in their car. It should try to keep the drivers happy by providing them the most appropriate and fair pricing. Furthermore, Uber should improve its technical feature and in-house capabilities. In this approach, it can improve its taxi hailing app towards a predictive element, so that the car tracking and incident capturing rate is improved. The recruitment of drivers should be done through numerous filtering procedure, and the selected candidates to be provided with training related to behavioral analysis, risk analysis, crisis communication, and crisis intervention.

Another risk factor arising in Uber is that the employees are claiming to become permanent employees rather than independent contractors. In case, if the drivers are entitled to become permanent employees then Uber has to bear the basic amenities according to the Fair Work Act 2009. Uber denies the claim reveals ideas of a reason such as drivers use their own car, the flexibility of working hours, and allowed for a part-time job. Apart from this Uber also states that it is not liable for any accident and cannot cover the loss of passengers. This risk can be eliminated by Uber through promising the passengers to bear the medical expenses if they suffer an injury during the Uber ride. By increasing the security level, the Uber pool service in Australia is expected to become successful in terms of user-friendliness and become less unsafe all the parties involved. The compliance to national and local regulation which includes safety rules, taxation, health and safety measures, community well-being and ethical practices by Uber would help to gain a competitive advantage in Australia.

Another risk for Uber to sustain in Australia is to fulfil its taxation policy. Based on recent reports, the Australian Taxation Office (ATO) since 2015 has enforced the policy of tax, where the drivers of Uber have to provide the national business tax per each Uber rides. According to ATO, Uber drivers are regarded as individual contractors (taxi drivers) who need to give taxes, that is, Goods and Service Tax (GST) on each ride, mention their income tax return and maintain business activity statements (Pratt, Morris, Zhou, Khan, & Chowdhury, 2019). For this purpose, the Australian banks need their account details, such as account name and numbers, date of payment, and amount, BSBs to ensure that the taxpayers are following the taxation regulations. The Australian tax office has enforced the 1999 law on the technology-based model of Uber, as a form of tax regulation.

In summary, it can be inferred that UBER POOLservice have several risk factor, which will impact the company's brand image in future. Apart from technological improvement, there is also needed to provide effective training and education to the drivers. Further, a detailed identity verification, prior to recruiting drivers and confirming passengers for ridesare necessary for security purpose.


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