Co-evolution of three mega-trends nurtures un-captured GDP : Uber's ride-sharing revolution

Abstract

Uber used a disruptive business model driven by digital technology to trigger a ride-sharing revolution. The institution- al sources of the company’s platform ecosystem architecture were analyzed to explain this revolutionary change. Both an empirical analysis of a co-existing development trajectory with taxis and institutional enablers that helped to create Uber’s platform ecosystem were analyzed. The analysis identified a correspondence with the “two-faced” nature of ICT that nurtures uncaptured GDP. This two-faced nature of ICT can be attributed to a virtuous cycle of decline in prices and an increase in the number of trips. We show that this cycle can be attributed to a self-propagating function that plays a vital role in the spinoff from traditional co-evolution to new co-evolution. Furthermore, we use the three mega-trends of ICT advancement, para- digm change and a shift in people’s preferences to explain the secret of Uber’s system success. All these noteworthy elements seem essential to a well-functioning platform ecosystem architecture, not only in transportation but also for other business institutions.