The global expansion of UBER in ASIAN markets

This paper contributes to the literature on the internationalization process of new ICT companies, especially the ride-hailing developer firms. It analyzes the global expansion of UBER in the Asian market. UBER did an aggressive expansion using a standard business model in every market that they get into. The strategy was on scale economy rather than localization of services. The case analysis suggests that UBER was unsuccessful in its global expansion due to a number of factors especially t
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The global expansion of UBER in ASIAN markets 569Int. J Sup. Chain. Mgt Vol. 8, No. 2, April 2019 The Global Expansion of UBER in ASIAN Markets Roderick Bugador Musashino University 3-3-3 Ariake Koto-ku, Tokyo, 135-8181 Japan Email: roderick@musashino-u.ac.jpAbstract — This paper contributes to the literature on which made innovative offerings to different users.the internationalization process of new ICT Be it in finance, shopping, education, andcompanies, especially the ride-hailing developer firms. transportation to name a few. All of these offeringsIt analyzes the global expansion of UBER in the Asian have disrupted many industries in favour of a new,market. UBER did an aggressive expansion using a flexible and efficient business models [7].standard business model in every market that they getinto. The strategy was on scale economy rather thanlocalization of services. The case analysis suggests that One of these newer ICT business models is theUBER was unsuccessful in its global expansion due to application-based taxi (hereafter referred to as app-a number of factors especially the host economy based taxi) service. The app-based taxi service iscontext and local competition. Eventually, the defined here as those taxi services that can becompany retreated from Asia and refocused its efforts processed through the use of an Internet applicationin their home market. This research shows that the starting from the registration, reservations, payment,global expansion of ride-hailing firms is not as easy as evaluation and interactions by riders withthe born global theory would predict. It demonstrates independent drivers and virtual staff. The app-basedthat ownership advantages are still relevant as there taxi is part of the overarching concept of sharingare still a lot of frictions in the global market. economy. This is where an idle resource, such as an automobile, is shared by private owners to otherKeywords— UBER; ride-hailing firms; global expansion; users through an ICT platform. These sharingownership advantages; Asian economies economy business models have experienced a tremendous growth of users in the last few years.1. Introduction Apparently, this is because of the advantages that the newer business models can offer compared to theThe global expansion of Information and traditional ones.Communication Technologies (ICT) has been aninteresting research topic during the recent decades In less than 10 years the app-based taxi services,[9]. Along with this expansion is the rise of different such as UBER, Grab and Lyft, have expandedtypes of ICT companies in different industries. rapidly in various cities around the world. ThisThese ICT companies have provided different heightens up the debate on whether highlysoftware and hardware services to pull alongside the innovative firms, such as those app-based taxigrowing demand for digitalization in different parts developer firms, actually defy the incrementalof the world. Their growth is considered to be internationalization which is the common pattern ofphenomenal as about half of the world population is the incumbent multinational enterprises (MNEs).now using the internet [10]. The likes of Microsoft, The expansion of these highly innovative firmsFacebook, Alibaba and Google have enjoyed a across borders is believed to be quicker because ofwinner-take-all fortune as the usage of computer and the agility of their organizational structure andinternet becomes part of the lifestyle of many assets. This is the argument of the proponents of theorganizations and individuals. Within the last 20 born global phenomenon. On the other hand, anotheryears, there were numerous types of ICT firms camp believes that there is no sufficient proof to support the born global phenomenon, as there are______________________________________________________________ still a lot of frictions in the global markets. TheyInternational Journal of Supply Chain Management argue that the phenomenon is very limited in natureIJSCM, ISSN: 2050-7399 (Online), 2051-3771 (Print)Copyright © ExcelingTech Pub, UK (http://excelingtech.co.uk/) and may not be enough to serve as a yardstick in both theory and p ...