Uber’s Ethical Business Challenges

Introduction

Business ethics provides responsibility to the organisation to execute their productivity and commercial activities by properly abiding with the policies and practices related to corporate governance, corporate social responsibility, insider trading, fiduciary responsibilities and bribery. However, Social responsibility is referred to the theoretical concept that organisation while executing business have duty for the environment and sociality and they require to focus on their activities in such a way so that they do the best to develop a well-framed society as a whole. In relation to this, the report focuses on the ethical challenges experienced by Uber while using their app-based peer-to-sharing technology. The risk to be overcome by Uber due to its disruptive business model is also to be discussed. Lastly, whether or not Uber needs to regulate compliance with standards during expansion to remain in the competitive position in the industry is to be explained.

1. Ethical challenges faced by the Uber in using app-based peer-to-sharing technology

In recent years, it is seen that Uber has scaled success within a short time period. This is evident as in 2018 Uber claimed to have earned $11.3 billion as revenue which is up by 43% than the previous year (Ferrell et al. 2018). The success of Uber has been based on their fruitful and planned use of app-based peer-to-sharing technology. Peer-To-Sharing technology is referred to as the sharing and distribution of information from one peer to another by using digital networking (Sun et al. 2018). Thus, using the technology allowed Uber to provide opportunity to its customers for being able to share information with others through the use of internet facility. However, the technology though has provided benefit for Uber to progress in business but it has lead to create various ethical challenges to be experienced by the organisation (Li et al. 2016).

In the US, UK, Canada and few other countries, the sharing of personal information of the consumers are highly regulated. This is evident as in the UK the Data Protection Act 1998 has been formed that informs taking effective legal actions against the organisation who do not protect the personal data and information of the consumers in a proper manner and share their information without permission (www.legislation.gov.uk, 1998; Ferrell et al. 2018). However, in using peer-to-sharing technology the organisations are unable to keep the tracking information and personal data of the consumers in a confidential manner as the information is shared through the internet with digital technology with others who can use it without any hindrance in any way (Hayes et al. 2017; Chaudhry et al. 2018). This is evident as while using Uber it allows the consumers to share their driving information with peers who can use the information for their personal purpose without any hindrance. Thus, the app-based peer-to-sharing technology is creating ethical challenges for Uber regarding their lack of efficiency to maintain the confidentiality of personal information of their consumers which is one of the business ethics to be followed.

The app-based peer-to-sharing technology of Uber also creates an ethical challenge for them in the sense that they are taking away business from the private professional drivers who are commercially trained and experienced to drive taxi and private vehicles in cities. This is evident as Uber through the sharing technology allows that consumers to hire private vehicles from any area under their company without interacting with the private professional drivers to access services for them (Hall et al. 2018). The fact also mentioned in the case study ensuring the information is valid in nature. Thus, such condition is leading the private professional drivers to experience hindrance in availing consumers to build their business and earn required finances to help them manage their social and personal life. In implementing app-based peer-to-sharing technology, Uber is seen to be implementing their own rules which are sometimes against the policies and legislation framed by the government in the countries (Means and Seiner, 2015). This is leading the organisation to face ethical challenges in the form of legal suites and hindrances in getting permission from countries to expand their business as it is unethical to not abide by the rules of the countries. It is evident from the case study where it is mentioned that Uber is banned in countries such as France, Germany, Israel, South Africa, Spain and others (Ferrell et al. 2018). Moreover, it is informed that Uber in London faced lawsuits for violating country law (www.foxbusiness.com, 2018).

Uber to incur better profits and increased revenue for managing its app-based peer-to-sharing technology is seen that at times they increase the fare of their transportation while demand of their services increases in any challenging situation as mentioned in the case study (Ferrell et al. 2018). It is evident as they do it in situations of natural disasters where due to its peer-sharing technology more consumers prefer to use them (Bashir et al. 2016). This is because consumers feel safe that their transport information and location is shared with close peer-group which the peers can use to find them in case of emergency or accidental situations for the person during the disaster. However, it has led Uber to face ethical challenges as charging increased fare during an emergency situation is unethical in nature as it would mean the company is taking advantage of the hindered situation of their consumers to make their business prosper.

In using app-based peer-to-sharing technology, Uber demands of providing trusted and secured services to the consumers but they are seemed to have failed in many occasions to abide by the activity (Young and Farber, 2019). It is evident as reports of Uber driver raped a woman in India was circulated where even after sharing their information with the peers did not help them as mentioned in the case study (Ferrell et al. 2018). Moreover, in London, security issues regarding Uber were reported by consumers where they informed that they doubt the safety of their drivers as well as personal information through the use of the application (Hayes et al. 2018). Thus, such incidences have led Uber experience ethical challenges of lack of trust and security from the consumers in using their app-based peer-to-sharing technology to deliver services. Further, Uber in using app-based peer-to-sharing technology is seen to experience ethical issues as they do not offer special services or provision for the disabled service users as per the country laws. It is evident from the case study where it is mentioned that Uber violated Disabilities Act framed by the American government by not providing any facility for the disabled or wheel-chaired people to drive in their cars (Ferrell et al. 2018).

2. Risk to be overcome by Uber to reach success

The use of disruptive business model and marketing strategy by Uber has led them to experience various risks in their business operation which is avoiding them to be successful in nature. In relation to this, the risks to be overcome by Uber to ensure success of their business operation as follow:

Number of Uber drivers: Uber is presently facing risk of having increased drivers to provide services to its target consumers due to its disruptive business model as analysed from the case study. This is evident as the business model of Uber allows the drivers to act as independent contractors where they can run their personal ridesharing business and chose to drive with Uber whenever they wish to execute it (Hall and Krueger, 2018; Ferrell et al. 2018). Thus, this flexibility to drive is leading many drivers to get involved with Uber to offer services to the consumers creating overflow of drivers. This overflow is creating hindrance of decreasing the number of consumers a single Uber driver may get to earn proper finances as the rate at which Uber drivers are increasing the demand of service or number of consumers is not growing at the same pace. Therefore, the situation has result each driver to earn less that in turn is leading to their frustration which demands Uber to overcome the situation so that proper flow of finances is maintained for each driver to have satisfaction to drive for the organisation. It is required as satisfied employees makes the organisation to progress as satisfaction makes employees feel valued and acquire mental stability to offer proper effort at work to bring in increased productivity to ensure success for the business (Dudley et al. 2017). Thus, the fact informs that Uber by controlling the number of drivers as per the number of consumers would be able to make opportunity for proper earning of each driver by letting them get increased number of consumers.

Surge in price: As per the case study, the surge price strategy of Uber is one of the key risks to be overcome by them to ensure success in the future. This is because surge prices are regarded as exorbitant amount to be paid by the consumers which many avoids paying to make the organisation lose the ability to retain loyal consumers (Rogers, 2015). This is because the surge pricing leads the consumers develop grudge over the company as they have to pay more than the normal amount without any potential reason. It often makes them avail other modes of transportation or private transport to fulfil their needs avoiding servicers from Uber making the organisation lose their valuable consumers. Moreover, it is seen that surge prices are implemented by Uber during worst possible times such as during raining, on weekends and others when the consumers require their service on urgent basis. The consumers in case cannot use services from the organisation when they want it the most makes them lose value and loyalty towards them out of dissatisfaction (Smith, 2016). Thus, Uber to retain its consumers require overcoming surge pricing as risk as the consumers are their key investors who pay for their services to let the company prosper in the industry.

Security and service quality: The security of the consumers is one of the key risks experienced by Uber at the present. This is evident as it is mentioned in the case study that one of the Uber drivers in India raped a woman while travelling at night (Ferrell et al. 2018). It indicates that the safety of the passengers of Uber is at stake and they require taking effective steps in controlling the risk. This is because without creating safe environment for the consumers to avail services from the organisation it would lead consumers to avoid accessing services making them making the organisation suffer failure to retain existing consumers and attract new consumers to expand their business (Joewono et al. 2016). Moreover, ensuring the safety of the consumers by the organisation creates a positive image making more new consumers to avail services from them (Rayle et al. 2016). This indicates that Uber requires overcoming the risk of improper security of its consumers and promoting better trusted and safe services. The service quality by Uber for disabled consumers is one of the risks to be overcome by them to ensure success (Mapelli, 2017). This is because helping disabled individuals in the society is regarded as social responsibility which the organisations require to perform to ensure positive image in the industry. Moreover, in countries like America, Uber to perform their business legally require resolving the risk of providing improper services to disabled individuals.

Satisfaction of the employees and drivers: The drivers of Uber who provides services for the company to its consumers face increased control over price settings and operating their extent of services as well as are not regarded as employees of the organisation (Berg and Johnston, 2019). Uber requires overcoming this risk of dissatisfaction of the drivers by creating less control over them and making them their employees as the issues have led them to experience lawsuits which are creating lower image of the company in the market. The hindered image of the organisation in the market leads potential workers to avoid getting involved with them making the company lose valuable talents required by them to gain success (Leighton, 2016). The valuable talents are required by Uber as well as any other companies to gain advantage in the market through innovation with the help of their skills and thus the risk regarding dissatisfaction of the divers are to be resolved. In the given case study, the harassment of the female employees of the Uber is another risk to be overcome by the organisation to avoid criticism in the market. (Refer to Appendix 1)

3. Regulation to develop compliance with the standards for protecting competitors and consumers

The popularity of Uber irrespective of its risk and ethical challenges is evident as in 2017 it is reported that the organisation is operating over 425 cities in over 72 countries of the world (Ferrell et al. 2018). In this respect, Uber requires to develop regulation for complying with the standards to protect consumers and competitors. This is because it is not only going to help the business operate in a legal and ethical manner but also it would lead many governments to support their expansion is more countries where they are still banned to be performed from doing business due to lack of compliance with business standards and legislation. Moreover, such practices would bring opportunity for Uber to create better value in the industry as well as create greater expansion in the market and attract more consumers.

At present, Uber requires at first to develop regulation that complies with the standards of protecting consumers through insurance during any accidents. This is because compensating the harm caused to the consumers during the accident that is result of fault of the Uber’s driver is the responsibility of the organisation to be managed. The protection for accidental occurrences is required for the consumers so that they do not fear about risk of death in case of sudden accidents while availing services from the organisation (Engstrom, 2018). Thus, regulation of protecting consumers through insurance is required so that the consumers of Uber feel financially safe to be able to get healthcare services in case of any sudden accidents to protect their life. Uber requires developing regulations that comply with providing personal safety to consumers while travelling in the car. It is essential as many Uber drivers who are non-professional and private are involved with the organisation those are providing hindered services creating issues for the company to expand (Li and Voege, 2017). The personal safety of the consumers is to be ensured by the organisation so that the consumers feel safe and trusted to avail services from them (Lee et al. 2018). Thus, abiding with these regulations are going to ensure the safety of the consumers of Uber which would make them create positive image of the organisation in the market through word-of-mouth ensuring Uber’s better and increased demand as well as attraction more new consumers to successfully expand their business. The taxi or transportation fares, in general, are mainly set by the government or local authorities. However, in case of private companies, it is seen that the rate and time of operation of their services are managed on their own (Lee et al. 2018). Uber is also a private organisation being able to set rates and time of operation of their services on their own and in this sense they require to develop regulation in controlling their time and financial rate of operation of services so that they can comply with standards of getting protected from other competitors who are intended to harm them. It is required as lack of control of the organisation for its competitors lead the organisation to get harmed making them experience lower progress and expansion in the industry (Tian et al. 2016). Thus, developing this regulation is going to protect Uber from unnecessary harm from the competitors making them able to hold their competitive position in the market during expansion. Uber requires regulating accident coverage for the drivers to develop compliance in protecting their business. This is because in case of any serious accidents where the consumers file lawsuits against the company due to dissatisfaction of services from the drivers Uber would be able to have financial coverage during the risk to protect their business from experiencing loss. Thus, it is essential for Uber’s business growth as it offers them protection from any unnecessary financial loss under any circumstances that may negatively affect the business. Uber requires developing specific regulations regarding the nature of cars to be used by drivers in offering services under their name to comply with standards of protecting consumers. In case of private ridesharing organisation, it is seen that many private cars are used that are not of good standards creating risk for its consumers to get inappropriate and hindered services (Thelen, 2018). Thus, setting proper standards of private cars to be used by the Uber in its rising business condition is important to offer high-quality service experience to the consumers ensuring compliance to protect their existing consumers. The drivers of Uber do not pay taxes to the government which required to be regulated by the organisation. This is because paying tax to the government is regarded as social duty of all to participate in building the growth of the nation (Rauch and Schleicher, 2015). Thus, it is the social responsibility of the Uber to make its drivers pay taxes to ensure they operate and expand in countries to improve not only company's growth but also contribute to the growth of the nation.

Conclusion

The above discussion informs that ethical challenges experienced by Uber in using app-based peer-to-sharing technology is lack of confidentiality of personal information of consumers, inappropriate abidance with government rules, creating hindrance in private trade and others. The risks to be overcome by Uber include number of drivers, surge in fare, making divers happy, controlling competitor and other. Lastly, Uber requires focusing on areas of regulations such as accidental insurance coverage for consumers and drivers, personal safety of consumers, road safety of cars, managing competitors, taxpaying and others. These are required to be focused on so that effective expansion of the business can be ensured by Uber with less experience of ethical and social challenges.

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