Unit viii case study | Economics homework help

 Founded in 2009 by Travis Kalanick, Uber provides transportation service in U.S., European, and Asian cities. In the year 2014, its gross revenues were $2.957 billion; net revenue after commissions and incentives, $495 million; cost of revenue, $400 million; operating expenses, $661 million; for an EBIT of $565 million. The original Uber model of operations was for the driver to use his or her own vehicle and offer services as and when they liked. The Uber webpage for drivers DBA 7180, Managerial Economics and Business Theory 4 emphasizes that drivers can use their own car, set their own schedule, and get paid weekly. More recently, Uber has arranged for drivers to rent cars to provide Uber services. Uber clients book and pay for rides through the smartphone. As noted in Business Insider’s article by James Cook, after each ride, the Uber client rates the driver on a scale from 1 to 5. If a driver’s rating falls below a particular level, Uber discontinues her or him from offering the service. Uber also allows drivers to rate clients. In January 2015, Uber extended fare cuts from the largest U.S. markets to 48 more cities. Uber asserted that the lower fares would benefit clients and drivers because the higher demand would allow drivers’ incomes to increase. The higher demand makes the drivers more efficient, so that they can get more trips every hour, which means more earnings for them. By contrast with Uber, whose drivers provide service with private cars, the Chinese services, Didi Dache (backed by Tencent) and Kuai Di Dache (backed by Alibaba) are smartphone-based applications to book taxis. In 2015, faced with competition from Uber (backed by search engine Baidu), Didi Dache and Kuai Di Dache merged. Following the merger, they continue to operate as separate services. Based on the case above, answer the following questions: To what extent do you think that any economic inefficiencies of the original Uber operating model may impact the operational strategy and ultimately the success or failure of the firm? Considering the abundance of consumer ethics-related concerns about Uber, do you think that the industry should be further regulated? Based on the literature presented in this unit and your own research, do you think the current regulations are fair? Appraise the economic concepts of the operational strategy which may result in reduction in prices and resultantly lead to increase in demand. Explain how to use this concept to calculate the change in revenue from a 1% cut in prices. In Chicago, the reduction of fares by 23% led to 12% increase in revenue. What do these data imply about the concept of regulations, mentioned above? On a figure with dollars per hour on the vertical axis and hours of labor supplied on the horizontal axis, please sketch the driver’s marginal benefit from providing labor. Note: If the driver supplies more hours, he or she raises the probability of getting work, but at a diminishing rate. Explain how a reduction in the fare affects the marginal benefit from providing labor. Consider both the direct effect of the fare and the indirect effect (lower fare attracts more customers and raises the probability that the driver gets work). From a driver’s viewpoint, what is the optimal quantity of labor to supply? Intuitively, does an increase in earnings necessarily make drivers better off? Your response must be a minimum of two pages in length. You should apply information from the literature review included in the unit lesson as well as any other scholarly sources you find necessary for a total of at least two sources. All sources used, including the textbook, must be cited and follow APA guidelines, and your paper should be formatted in APA style to include a title and references page. 

Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10