AN EXAMINATION OF UBER STRATEGIES ON DISRUPTION OF CONVENTIONAL TRANSPORT SYSTEM IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1 Background of the study

 Contemporary organizations are currently facing several environmental consequences, including rapid technology disruptions, heightened demands for privatization, and increasing hazards associated with globalization. According to Joan & Ramon (2019), the emergence of globalization and unvarying technological changes have brought about a lot of transformations in the world, which propel business organizations to come up with constant strategies and competitive ideas that will not only give them an edge over competitors but also enable them to meet up with international best practices to stand the test of time. Hosseini; Mehdizadeh & Soltani, (2018) assert that business organizations are beginning to evaluate their competitive business environment, analyze their strengths and weaknesses while taking cognizance of opportunities and threats in the external environment of operation, and develop competitive and corporate strategies that will sustain the firm in the face of challenging competitive threats of which the transportation cooperation arenot left out (Papulova & Papulova, 2016).

Evidently, the urban public transport systems in Nigerian cities have seen significant transformation in recent times due to technological innovation such as the invent e-hailing services. According to Dickenson (2018), the advent of e-hailing services has begun to assume a significant role in facilitating the transportation of products and individuals throughout various Nigerian urban areas.  By definition, E-hailing pertains to the act of requesting a vehicle, such as a car, taxi, or any other means of transportation, through the use of a computer or mobile device. The term 'E' in this context denotes 'electronic', while 'hail' signifies the conventional practise of notifying a taxi cab to halt. In order to reserve an electronic ride, it is necessary for the client to specify their pick-up location. This information may be supplied by either inputting their address manually or by utilising GPS connection to determine their present position. These applications are jointly developed by automobile service providers and application start-up companies.

In Nigerian cities, the prevalent modes of public transportation have historically included commercial buses, commonly referred to as "danfo," and automobiles known as "taxis," both of which are characterized by their distinctive yellow colour. Additionally, the ramshackle "molue" has also been a prominent fixture in the urban transportation landscape. Prior to the emergence of ride-hailing applications, accessing transportation was often a challenging task. In order to get transportation, passengers were required to either signal for taxis on the roadside or proceed to the nearest designated taxi station (Omilana, 2020a). However the the emergence of e-hailing services has started to play an important role in the mobility of goods and people in most Nigerian cities. The e-hailing platform connects individual drivers to potential users. Taking advantage of the country’s underdeveloped urban public transport system, high population, and rapid urbanization, the e-hailing mobility services have now grown exponentially from two (2) operators in 2014 to twenty-six (26) operators by 2022 across Nigeria’s major cities.

1.2 Statement of the Problem

In recent years, there has been a significant growth in the e-hailing industry. This growth has led to a shift in customer preferences, resulting in the emergence of a new customer segment with distinct needs. Meeting these needs through the development of innovative products and services has the potential to enhance customer satisfaction. According to the study conducted by Okechukwu, Ekwochi, and Eze in 2018, Providing consumers with perceived higher value in comparison to rivals' offerings is a strategic approach to achieving a competitive advantage (Cole, 2008). The concept of superior value encompasses several aspects, including the provision of high-quality products or exceptional services at a reduced cost, the availability of premium value offers that combine price, quality, features, and service in a remarkable manner, the presence of superior products that justify an additional expenditure due to their desirable properties, among others (Chau & Witcher, 2020).

Uber Technology Inc. has used many methods in order to get a competitive edge and maintain its market leadership position against intense competition and a saturated market characterised by the presence of several low-cost local taxi companies (Martin, 2016). The implementation of these techniques has provided the company with a distinct advantage over its rivals in the two Nigerian cities where it conducts its operations. Uber employs many methods to maintain a competitive edge in the market. These strategies encompass disruptive innovation and technology, collaborative consumption within the sharing economy, a flexible pricing strategy, and the use of celebrity brand ambassadors, among others. Of all the tactics being employed, Uber primarily relies on a disruptive technology/innovation strategy.Mutai (2017) asserts that Uber Nigeria employs innovative digital transformation technologies and assures digital disruption inside the taxi business.

However, while these development are good, academia has further to inquire whether Uber Strategies is enough to totally eliminate the conventional transport system owing to the significant challenges attached to government regulations which  poses a substantial risk to the survival and even elimination of market participants. Few studies abound in these area amidt extant studies on e-hailing. Upon this premise, the researcher delved into  an examination of Uber strategies on disruption of conventional transport system in Nigeria.

1.3       Objective of the study

The broad objective of this study is focused on an examination of Uber strategies on disruption of conventional transport system in Nigeria. Specific objectives includes:

i.          To investigate the mode of operation of Uber mobility platforms in Nigeria's cities.

ii.        To find out the  the strategies adopted by f Uber mobility platforms in Nigeria's cities

iii.      To determine the extent to which Uber strategies disrupt the taxi business / marketplace in Nigeria.

iv.      To ascertain the extent to which technology innovation strategy affects competitive advantage in Uber

1.4 Research Questions

i.          What are  the mode of operation of Uber mobility platforms in Nigeria's cities?

ii.        What are the strategies adopted by f Uber mobility platforms in Nigeria's cities

iii.      What is the extent to which Uber strategies disrupt the taxi business / marketplace in Nigeria?

iv.      What is the extent to which technology innovation strategy affects competitive advantage in Uber?

1.5       Hypotheses of the Study

Ho: The extent to which Uber strategies disrupt the taxi business / marketplace in Nigeria is low.

Hi: The extent to which Uber strategies disrupt the taxi business / marketplace in Nigeria is high

1.6       Significance of the study

There is requirement of sound and futuristic regulatory framework which would lead to better development of the cab hiring economy. Presently, there are no clear guidelines for consumers as whom to approach in case of any fraud happening to them. If there are proper rules and regulations in place, it will encourage more people to use e-hailing applications. Findings of this study will advocates the development of a comprehensive policy to address all of these issues because they are shared by each state government in Nigeria. Cab aggregators by the findings of this study can collaborate with insurance companies so as to take care of the security concerns of the riders. Both life insurance and general insurance can be offered as per the need and choice of the consumers.

 Empirically the study will add to the general body of knowledge and serve as a reference material to scholars and student who wishes to conduct further studies on related field.

1.7 Scope  of the Study

The scope of the study borders on an examination of Uber strategies on disruption of conventional transport system in Nigeria. The study further discussed the mode of operation of Uber mobility platforms in Nigeria's cities and the extent to which technology innovation strategy affects competitive advantage in Uber. The study is howevr delimited to Porth Harcourt Mtropolis in Rivr State.

1.8 Limitation of the Study

Like in every human endeavour, the researchers encountered slight constraints while carrying out the study. The significant constraint was the scanty literature on the subject owing that it is a new discourse thus the researcher incurred more financial expenses and much time was required in sourcing for the relevant materials, literature, or information and in the process of data collection, which is why the researcher resorted to a limited choice of sample size. Additionally, the researcher will simultaneously engage in this study with other academic work. However in spite of the constraint all these constraint were downplayed to give the best.

1.9       Definition of terms

E-hailing: E-hailing refers to the process of ordering a car, taxi or any other mode of transportation by way of computer or mobile device.

Uber: Uber Technology Inc is a ride-sharing transportation firm that was introduced in Nigeria in the year 2014.

Business Strategy:  It is master plan that the management of a company implements to secure a competitive position in the market, carry on its operations, please customers and achieve the desired ends of the business.