Uber ethical dilemma

Uber Hits a Bump in the Road Group 5: Francisco Prieto Ivania Perez Gabrielle Molinaris Diamond Pullman Ivannah Monrreal

Uber Hits a Bump in the Road. A look into the ethical issues Uber Technologies faces by Group 5: Francisco Prieto, Ivania Perez, Gabrielle Molinaris, Diamond Pullman and Ivannah Monrreal.

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Uber: Move the Way You Want

Start-up Tech Company

Ride sharing services connect drivers with riders using an app

Expanded to over 58 nations with approx. 30 million users

Valued at around $70 Billion

Upended the Taxi Industry

Looking toward US and International Expansion

Uber is a start-up tech company founded by Travis Kalanick and Garrett Camp that facilitates the connection of drivers and riders using an app providing ride-sharing services. Their operations have expanded to over 58 nations around the world and are valued at about 70 billion US dollars. It’s services cost less than the traditional taxis which has paved the way for them set a footprint in the market. The organization has achieved massive success and is looking forward to further conquer the United States and the international market, however, the rapid success of Uber has created a lot of ethical challenges in the ways of legal, regulatory, social, and technical.

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Ethical Challenges in App-based Peer-to-Peer Sharing Technology

The ethical challenges that Uber faces in using app-based peer-to-peer sharing technology includes fairness, financial misconduct, safety, privacy issues, and puffery. The drivers of Uber are considered to be Independent Contractors where they use their own resources such as their own cars for ride-sharing. However, Uber’s requirements of their drivers lean more toward the status of employee than contractor. This causes issues because the drivers must spend their personal money on upkeep and insurance, but are limited by Uber’s requirements that include the type of car you can have, solicitation guidelines, and how to guarantee hourly earnings. Although Uber claims it offers liability insurance plans for it’s drivers, should there be an accident, it may not be covered because personal cars are being used for commercial purposes. Uber’s website claiming it offers $1 million in insurance leads you to believe there will be no issue if in an accident, even though that is not necessarily the case. They also use advertising slogans such as “the safest ride on the road” claiming they have the “strictest safety standards possible” which is deceptive because several lawsuits have been filed against Uber for their safety standards. Uber’s background checks are not as strict as those for Taxi drivers and according to a CNN report, there is at least 103 drivers that have been accused of sexually assaulting or abusing their riders. It seems the level of accountability and morality that is there with traditional Taxi services is lacking with Uber. The morality of the company comes into question once again with the aspect of consumer privacy. Uber uses the “God-view” tool to track it’s users whereabouts without their. Another privacy concern is having personal information, such as debit or credit cards, on an app. This makes users an easy target for hackers. Lastly, Uber used its app to determine pricing for the ride and have implemented what’s called “Surge Pricing” where an algorithm is used to estimate fees charged when demand is high such as during heavy traffic times or even in times of crisis. This is supposed to encourage drivers to pick up more rides, but consumers feel this is really to take advantage of them when in need. Both morality and fairness is called in to question on this topic.

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Drivers: Employees or Contractors?

False Advertising

Safety Concerns

Surge Pricing

Privacy Issues

Overcoming the Risk of the Disruptive Business Model and Marketing Strategy

Uber understands its target market and has a disruptive business model and marketing strategy. Basically coming in and trying to take over the Ride-Sharing space, it has had little regards to rules, regulations, and ethics. In order maintain a strong contender in the space, it needs to assess some of the risks they are making. The five key areas Uber must focus on to be successful are in 1) Drivers, 2) Customer Base, 3) Customer Satisfaction, 4) Competitors and 5) Technology. Now that Uber has addressed their corporate culture by having the founder and CEO Travis Kalanick step down, known for his aggressive strategies, they can focus on implementing new strategies to maintain their rapid expansion and success. Taking into consideration the current issues the drivers have with Uber, they can take a second look at whether or not they should increase their profit share deductions, or whether they should be more or less in control of the drivers so that they can maintain Independent Contractor status or receive employee benefits like reimbursement and healthcare coverage. Additionally, they can implement training programs to improve drivers and reduce risk of negligence while lowering liability insurance costs. Next, with the increasing demand for ride-share services, it’s imperative that Uber take accountability for their consumers safety and pay great attention to improving their safety policies. If riders feel safe, they will continue to use Ubers services, however, so long as they feel they are not being price gauged, so Uber should offer rates that are beneficial for both the riders and drivers. These improvements would automatically increase Customer Satisfaction, but they can take it a little further by looking into the complaints made to the Better Business Bureau and addressing them head on. Since Uber’s business model is found in similar services by other companies, they will need to remain competitive. With all the options they currently provide, the next step is to expand into the up and coming industry of autonomous cars where they will shift their competition from small companies like Lyft to major manufacturers like Google or Tesla. Finally, to address security concerns Uber can improve their database security system to reduce risks of being hacked. In addition, they can continue to update and improve their app for ease of use to attract people of all technical abilities.

4

Drivers

- Fair Compensation & Training Programs

Customers

- Safety & Rate Improvements

Satisfaction

- Better Business Bureau Complaints

Technology

- Upgraded Security & App Updates

Competitors

- Remain Competitive & Expand

Regulation, Compliance & Standards

Regulations similar to other public transportation

Proper licensing

Extensive background checks with fingerprinting

Standardized pricing

Complying with rules set forth by courts

Because Uber is so popular and the business model is being expanded to other industries, there should be regulation to develop compliance with standards to protect consumers and competitors. They have already had issues in several countries due to not having licensing so if this is something they require moving forward as standard regulation then they will receive less pushback. In order to get the licensing they should have to go through extensive background checks that includes everything from fingerprinting to checking of they are on any sex offender list. This makes it fair for their competition to be on the same playing field as them, plus, it gives the consumers peace of mind to know they are with a licensed driver, that required strict background checks. Uber should also develop a standard system of pricing similar to other transportation instead of taking advantage of their consumers in need. The public doesn’t ride a train to work in the morning and pay more just because it is during traffic time. Last but not least, Uber’s culture needs to change in the sense that it needs comply with rules set forth by courts against them instead of continuing to do as they please. This lack of regard to each individual city or country’s laws will continue to to cause pushback towards the company and leave a stigma on their name.

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Conclusion

Uber faces several ethical challenges along the way of their massive and rapid success.

Uber must overcome risks to maintain success.

Regulations, compliance, and standards should be implemented to protect both consumers and competitors once expansion goes into other industries.

In conclusion, Uber has faced many ethical challenges along the way of their massive and rapid success which brings up risks they must address to maintain it. These include with their drivers, riders, competitors, and their own technology. They must comply with the law to avoid further pushback and if they were to set forth regulations and standards they would be able to sustain their business enough to successfully continue their expansion in the global market and into other industries.

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Resources

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2015). Business ethics: Ethical decision making & cases (12th ed). Australia: South-Western.

Forry, L., & Moran, M. (2015, August 05). Why we want to regulate Uber - The Boston Globe. Retrieved from https://www.bostonglobe.com/opinion/editorials/2015/08/05/why-want-regulate-uber/VpzJVS6OEteQAnt2Ss8AAJ/story.html

O'Brien, S. A., Black, N., Devine, C., & Griffin, D. (2018, April 30). 103 Uber drivers accused of sexual assault or abuse. Retrieved from https://money.cnn.com/2018/04/30/technology/uber-driver-sexual-assault/index.html

Weinstein, B. (2014, November 21). Opinion: Four other ways Uber is ethically challenged. Retrieved from https://money.cnn.com/2014/11/21/technology/uber-ethics-oped/

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