Uber Case and Some Implications with Two-Side Business

Abstract

In digital economies, especially in an era of 4.0 industry, technology absolutely plays a central role for establishing business models. Two-side business of course consumes technological applications much. However, successfully decisive elements evidently stand outside technology but inside itself business model. Take Uber business model for case analysis, the paper points out these advanced feature, which are also drawn down in theory of two-side markets; big two-group of users’ data, indirect network effects as well as its non-neutrality of the price structures. For business operators, especially Uber’s competitors, it reveals that a deep utilization of technology is clearly important but insufficient. For competition policy and regulation, competition authorities need to pay more attention on evaluation of market power as well as anti-competitive impacts in questions of two-side business models. EU Court judgement on Uber, given its authority boundary and in an initial step, provided a good clue for Uber’s field of trade. It still leaves an enough consideration on the fashion of business activities which competition commissions in South-East countries in turn make progress for such evaluation in the current merger case between Uber and Grab. The assessment must respect to both sides, a capacity where Grab is likely to become monopolistic in these markets as well as merits and efficiency the two-side platform can bring to. For this achievement, the paper provides a significant explanation on application of some economic efficiency theories, particularly the Kaldor-Hicks efficiency, according to OECD (2009) proposal that customer welfare need to be balanced among both sides of market.