Little tasks such as calling a taxi has gotten easier thanks to apps such as UBER. What is possibly easier than dialing a number and asking for a taxi? Or going outside and stopping a taxi? UBER made sure that with one click, we could request a taxi, track the location of the taxi, and know what the price of the ride was before one reached the destination. All of that with just one click. Uber was an idea that came out as a solution to a frustrating moment. Hasn’t it happened to you that during a frustrating moment, you think how easy a certain task would be if only we had an app that did it for us? That’s how the idea of UBER was born. Technology has made our life so convenient and UBER is an app that definitely offers convenience.
According to an Investopedia article, “The Story of Uber” by Dan Blystone, it all started in 2009 with two friends, Travis Kalanick and Garrett Camp, who went to Paris and couldn’t get a cab on a cold winter night. Kalanick and Camp both thought about an app that could’ve made this situation easier: “Initially, the idea was for a timeshare limo service that could be ordered via an app.” (Blystone, 2018). This was left as just an idea and it wasn’t pursued until a year later. Kalanick and Camp, each owned their own company but once they sold their startups, they came back to focus on their idea that was later was named UberCab. In May 2010, UberCab was launched in San Francisco and a few months later, due to an issue with the San Francisco Municipal Transportation Agency, UberCab changed their name to Uber. Uber quickly expanded throughout the country to big cities such as New York, Seattle, Boston, Chicago, Washington D.C, and even internationally when they launched in Paris. But it is expected that with the expansion of the company faces some issues.
Uber has had several scandals due to the unethical decisions that the company has made. These scandals include a variety of topics such as sexual harassment, unethical strategies, many scandals in the countries that they have expanded, and they also lack corporate social responsibility. Uber is a company that is more interested in the profits and their worth than in their stakeholders and the importance of these stakeholders. Since their main interest is themselves, it isn’t unlikely that their decisions are made based on their gains and not on the stakeholders’ gains. This paper will explain some of the unethical decisions made by Uber and how they affected the community, and their own employees. We will also connect the course concepts that we have learned to the unethical actions that Uber has made.
Uber’s Unethical Business Strategies: Price Surging
Uber has made unethical decisions when it comes down to their strategies. Uber is a company that is focused only on the company and not on their stakeholders and their strategies have proved this was their goal. Price surging and undermining their competitors are just a few of the unethical strategies that Uber has made.
According to the Business Insider article, “40 of the biggest scandals in Uber’s History” by Kate Taylor, the first time Uber surged their prices was in 2012. Uber increased their prices to 3-6 times as more than the usual amount. This made customers mad but because they needed a ride, they settled to paying the amount that Uber charged even if they didn’t agree with it. However, Uber’s prices go up when the demand goes up. It’s a business strategy and during busy times, one should expect to pay a higher price for a ride from Uber. This tends to happen on holidays, morning weekdays during rush hour and also weekend nights. If customers really want the product or service, they will pay for it. The problem begins when people are urgent for a ride due to an emergency.
There have been several emergencies that have given Uber the chance to increase the pricing. According to the New York Times article “Taming the Digital Wild West” by Eric T. Schneiderman, Uber increased their prices to eight times more than the usual price during the Hurricane Sandy. There was no other source of transportation since everything was down and the demand for a ride was high. This is only one of the many times that Uber increased their prices during an emergency. During the London, Uber didn’t turn off their surge pricing quick enough. Charles Riley, from CNN, wrote an article called “Uber criticized for surge pricing after London terror attack” in 2017. The app should stop the surge pricing as soon as there is an emergency because people are trying to get home or trying to get to a safe space and paying a higher price for a ride shouldn’t be another problem to think about. During an emergency, people won’t think twice about the price that they’re paying but some people might not have the funds to pay for a more expensive Uber. Nonetheless, this is what makes the price surging such an unethical issue.
We are beginning to use apps as part our everyday routine and this happens because they are making our life easier by being more convenient. Uber is one of those companies and many people use the app as their form of transportation, making them dependent on the app. Uber should know this too – they should be well aware that they have consumers who use their services as part of their daily routine. For this and for many other reasons, Uber should always be ready to protect its consumers. Companies such as Uber, since it is such an influential app, needs to be socially responsible.
Companies that profit from emergencies are unethical – Uber seems to be one of those companies. The company set the app so that the pricing increases when demand increases and although this is not an uncommon strategy, the company hasn’t been sympathetic when emergencies strike. Uber is mainly focused on the company and has proved that to be true with the surging of prices in several occasions. Due to the many scandals over price surging, Uber has taken action by now disabling the price surge during emergencies (Oh, 2014).
Corporate social responsibility is a concept that Uber has shown to not follow. Every day Uber becomes more and more influential in society and it’s important for the company to be socially responsible. The company has had so many scandals that it needs to find new ways of improving and it can start by becoming more aware of the importance the stakeholders. If it wasn’t for the stakeholders such as the consumers and drivers, the company wouldn’t exist. Once they decide to put their stakeholders as a priority, they will improve the app to work for the benefit of the stakeholder and not just for the profits.
Some new alternative methods to changing can still include disabling the surge pricing – or no pricing at all. Uber can offer another service, on similar to the POOL option. This service would only work during emergencies and everyone who is requesting an Uber, will simply get matched to ride with as many people that fit in the car. This service wouldn’t necessarily take in account the destination of the Uber riders but just the fact that they are in an affected area. In case of emergencies, the only focus should be getting the consumers to a safe place. Drivers wouldn’t lose with this service because the company can still pay them for the services that they provided. This can encourage consumers to trust and rely more on Uber because they will know that Uber is reliable regardless of the situation. That is how the company will continue to gain loyal stakeholders.
Uber’s Unethical Actions: Sexual Harassment Cases
Uber has constantly been on fire for series of allegations for sexual harassment scandals, mismanagement and safety concerns. According to an article on “Uber’s leadership says the company must change, after scandals”, by Steinmetz, the company must change if it wants to be as successful in the future, as it had been in the past seven years. Furthermore, the article mentions how severe the management and leadership problems are in Uber and that it needs to change both internally and externally, in order to do better going forward. (Steinmetz, 2017)
In any organization, leaders have the power to shape the culture of the workplace. When they lead ethically and by example, they have the ability to promote an ethical culture by setting high ethical standards for everyone to follow. For an organization to be successful, leaders must promote an environment where employees are treated fairly, with respect and where unethical business practices are strictly forbidden and aren’t tolerated. On the contrary, Uber’s corporate culture seems ethically challenged due to the discrimination, sexism and failure to address harassment issues that took place. To justify this statement, an article from Business Insider on “40 Biggest Scandals in Uber’s history” by Taylor, talks about an incident of sexual harassment and gender inequality faced by a former Uber female engineer, Arianna Huffington. Her case brought a lot of attention and investigation on Uber’s culture. Huffington was sexually harassed by a senior co-worker, whom she immediately reported to the Human Resources, but unfortunately her complaints were dismissed because the harasser was supposedly a high performer in their company and that was a valid reason for the upper management to ignore the complaints and for him to get away with the assault, with simply a warning (Taylor, 2017). Furthermore, she was given an option to work with a different group, even when she was the highest contributor to that current sector. This is a perfect example of lack of an ethical leadership and how much it can impact the organization. This not only resulted in loss of value in share of the company, but also ruined Uber’s reputation on the treatment towards women. Taylor mentions that this caused a decrease of women’s participation in her organization from 25% to just 6% as most transferred to different parts or some simply quit following the sexism and management chaos (2017). Other female employees also reported sexual assaults, where male-coworkers made unwelcome demeaning comments to females, some were touched inappropriately by senior co-workers and when reported, again, nothing was done to address the situation by upper management.
In lawsuits from former female employees, most admit to resigning altogether due to the emotional and physical stress they endured and management failure (O’Brien, 2018). Uber’s ethical challenges are prevalent in both internal and external environment of the organization. The accusations come from both employees in the organization and passengers that use the rise sharing application. There needs to be a serious reform on Uber’s way of doing business in the Uber app, as there are too many reported cases of sexual assault, abuse and rape from the drivers. According to CNN, there has been at least 103 drivers in the U.S. alone, who have been accused of abusing or sexually assaulting their passengers in the past four years. (CNN, 2018) In most cases the drivers took advantage of women that were highly intoxicated and that had passed out while they were on their ride home. In one case, the driver named Sanchez, who raped his drunk passenger, was arrested. Later, upon investigation his computer showed records of hundreds of videos of him raping and abusing young girls (O'Brien, 2018). Another case is of a driver who was accused of sexual assault, where the passenger reported him immediately. Uber told her that they were conducting further investigation. However, two weeks later the driver reportedly assaulted another passenger. This proves that Uber failed to exercise appropriate actions by continuing to let him work for them and drive his customers. Had they fired him, the second case could have been prevented (Messer, 2018). Since there are hundreds of cases of assault from drivers, it is clear that Uber needs to change their flawed, lost cost- measly background checks that they conduct before hiring their drivers, as too many bad people are using Uber as a way to reach their victims.
Changing Ethics and Culture at Uber.
After years of poor management, bad brand reputation and series of cases of assault and harassment, Uber is trying hard to regain the public’s trust and respect and ensure safety when using the application going forward. In 2017, Uber’s board of directors unanimously approved set of recommendations from former U.S. Attorney Eric Holder to overhaul the brand’s trouble image and redefine its culture and management (Booth, 2018). His report consisted as much as 47 things that Uber needed to address or change to rebuild their company culture. For internal environment, to address the discrimination and ensure that all teammates are treated fairly, the company has agreed to start using performance reviews, which can be used to hold leaders accountable. This is a good start, as earlier senior level executives were getting away with assaulting female co-workers just because their manager thought they were a senior, good contributing employee and that it was reason enough for them to get away with their actions. Additionally, human resources is said to use a system in order to keep track of complaints that could potentially raise red flags against particular individual, to be more alert and take appropriate actions. (Booth, 2018) To address complaints and issues immediately, a integrity hotline is being used to leave message anonymously.
For the external environment, Uber has made progress in bringing change to ensure safety of the passengers. An article from Uber Newsroom on “Getting serious about safety, by CEO Dana Khosrowshahi, states the several improvements the company as made so far (Khosrowshahi, 2018). Firstly, to ensure proper screenings, the company has been committed to running active criminal background and vehicle checks, that they run-run each year. Additionally, to make this more effective it is investing in technology that can notify them when driver is involved in any criminal activity. An effective change that has come from its past experiences is that, the riders can now live share the information of their trip with five shared contacts, this is a great way for friends and family to know about the passengers whereabouts and to report any suspicious activity immediately. The article further mentions about the company’s plans on releasing a new emergency button on the ride sharing application, that could potentially communicate the car’s location to 911 assistance, in case of emergency. Prior to the new changes, Uber used to make victims sign a confidentiality agreement for settlements. On a positive side, it made a major shift as from May 2018 it no longer stops passengers, drivers and employees from publicly speaking about harassment cases related to Uber. Additionally, the company has now given victims control over their claims by removing the mandatory arbitration for individuals claims of assault and harassment. That way survivors are free to resolve their claims wherever and however they want, be it in mediation, open court or arbitration. (Paquette, 2018) The article also acknowledges, an investigation launched inside the corporate environment that resulted in Uber laying off more than 20 staff who were involved in bullying, harassing and other related cases. For an organization to be successful, it is essential to have a ethical environment where everyone is treated fairly and with respect. This ensures employee motivation and cooperation in the organization. Although, Uber has had an awful reputation from all the scandals and bad management. By continuously focusing on making good change and creating ethical culture, it may be able to finally stand out as an ethical company in the long run.
Conflicts Between Uber and Stakeholders
Modern organizations are increasingly facing the challenge of effectively incorporating ethics into the business decision making process. Today, there is dominance of media reports of unethical conduct by companies and business executives. This outlines the need for modern organization to implement effective solutions that eliminate ethical dilemma. Therefore, for business to survive in the competitive corporate environment, it is necessary for managers to understand the root course of divergent ethical dilemmas and subsequently develop viable ethical policies that aim at ensuring that the companies adhere to the universal codes of ethics (Fernando & Moore, 2015). Ethics dilemma in the contemporary business world emanates from the conflict of interest between the conventional organizational objective of maximizing profits and the general desire of the improved social status. However, there are also ethical issues arising concerning the conflict of interest between companies and stakeholders. This paper focuses on examining the ethical dilemma concerns stakeholders including customers and rivers at Uber face and suggests possible implementation of policies that would resolve such issues.
Ethical Dilemma Issues involving Stakeholders at Uber
Although, the current ethical controversy relates to the idea that Uber faces various allegations for misdeeds such as misinterpretation of the quality of background checks it conducts on drivers, the most alarming ethical concerns centers on the reasons behind executives’ exit from the company. The company’s stakeholders include customers, employees and company executives. The executives are the primary stakeholders of the company since they are directly affected by the district attorney’s increasing concerns of their current ethical policies and code of conduct ethics (Fernando & Moore, 2015). In this regards, the district attorneys are concerned about the ineffective ethical policies at Uber, which potentially put the customers in harm. Recently, there has been a concern of the stunning rate of executives leaving the company due to their reluctance in addressing ethical dilemmas arising from customers’ safety. Customers have filed complaints regarding the danger and security problems they face due to Uber’s incapability to critically screen its drivers for potential ex-criminals.
Impact of the Uber’s Ethical Dilemma
Last year, the company’s CEO, Jeff Jones, quit working with the firm, alleging that Uber’s value are incompatible with his. His exit followed a heavy blow for the firm after reports and revealed of the company’s rising cases of discrimination and sexual harassment as well as its secret tool to evade law enforcement. Some of the ethical dilemma Uber face include allegations of betrayal and hi-tech espionage and gender discrimination and sexual harassment cases filed by Susan Fowler, a former Uber employee. In other words, these revelations regarding ethical issues owe to the string of departure of high level executives including Amt Singhal and Ed Baker (Uber’s vice president of product and growth). While the company exists to maximize profits, it essential for the executives at Uber to develop a culture and policies that adhere to ethical conduct. In fact, the economic performances indexes are measured by the company benefits like profits and sales revenue while social performances are evaluated by the company’s obligation to observing ethical concerns and corporate social responsibility practices.
Organization have an ethical obligation to observe government regulations legislations such as paying taxes, the employment laws in addition to environmental laws. Failure to adhere by these regulations could adversely affect a company’s success. The employment laws, particularly the Equal Employment and Opportunity Act clearly stipulates that employees must be treated fairly and equally regardless to differences in race, social status, gender, sex or disability (Benninga, 2013). While the entire Uber organization did not participate in Fowler’s gender discrimination and sexual harassment, the firm was responsible to establish an ethics code of conduct that ensured that employees conduct themselves ethically (Hanson, 2014). On the other hand, it was also unethical for the company to implement a model that helps it evade law enforcement and taxes. Consequently, the rising ethical concerns at Uber has significantly affected the reputation it has over the years established among the public and other companies. This is because in modern times, customers are paying attention to ethical businesses since they are becoming more ethical conscious than before (Hanson, 2014). Therefore, due to its unethical practices Uber has since demonstrated a decline in profits and revenue since customers do not want to associate themselves with unethical businesses. Similarly, the company has faced a huge blow from Apple Company’s decision to remove the Uber App from IPhones. Consequently, this move by Apple Inc. would not only reduce Uber revenues and profits but also reduce its customer loyalty base, hence risking its survival in the competitive business environment.
Application of the Virtue Ethics Theory at Uber
The virtue ethics theory asserts that a person’s personality and character is a crucial aspect that facilitates ethical thinking. Virtue ethics centers around the idea of doing something merely the right thing to do established on the set virtues. This contrasts with other forms of ethics like deontological ethics –moral values and utilitarianism-consequences of action (Benninga, 2013). In other words, virtue ethics concentrates on the choices that people make based on morals irrespective of the customs and laws of an individual’s particular culture (Hanson, 2014). The most important virtues of ethics in the business world include justice, temperance, honesty and courage. Uber did not practice these virtues while delivering their services to customers since they did not conduct screening prior to giving the drivers their job. In essence, Uber’s ethical dilemma arose from the fact that it did not demonstrate fair practices and their excellent ideas in making the taxi-transport efficient only centered on the employer’s benefit, rather than customer benefit.
In efforts to lead their employees towards utility and high levels of productivity as well as eliminating ethical dilemmas across the firm, Uber challenge to develop a comprehensive ethical resolution framework that clearly outlines procedures in dealing with ethical issues at the workplace. Significantly, having a framework that addresses the ethical dilemma issue within the organization is crucial to organizational success ethics (Fernando & Moore, 2015). The element of utility as an ethical dilemma refers to the value the change process delivers to the stakeholders within the company. Therefore, as effective managers, Uber executives must implement a strategy that focuses on not only creating value for the organization, for example maximizing profits, but also one that generates value for the stakeholder in improving their well-being.
Moreover, an effective ethical dilemma framework brings the different business benefits including consistency in outputs, efficiency in decision making as well as instituting self-respect among the stakeholders. This is because dynamics groups within the organization usually perceive that organizational change would potentially result in loss of control in operations since familiar routines give them a sense of control over the work environment (Benninga, 2013). As a result, the initial step towards implementing organizational change would be to enhance communication by soliciting support and inputs from the employees to help them recognize the benefits of their contributions to the process. Furthermore, it also necessitates creating and promoting organizational integrity is the best approach to solving ethical dilemma issues (Benninga, 2013). In simple term, successful change leaders must continuously develop and communicate symbolic messages to the workers that outline the corporate values concerning equity fairness and justice.
The best approach to resolving the ethical dilemmas at Uber would be the fairness or justice approach. This principle stipulates that ethical actions should aim at treating individuals equally or fairly on standards that are defensible. In this regards, it is necessary that the Uber executives design and implement policies that treat team members equally in terms of training and promotions as well as caring for their welfare ethics (Fernando & Moore, 2015). Also, since the team members would be uncertain of loss of control in their jobs, the fairness and justice approach would determine the different ways to integrate standards that foster autonomy among the stakeholders. Accordingly, resolving the ethical dilemma and value conflicts within the workplace involves steps including discussion, analysis, problem-solving and decision making. This process also requires executives to obtain effective negotiation and interpersonal skills. However, leaders at Uber can apply the code of ethics and professional conduct as a guide to decision making relating to an ethical dilemma.
On the other hand, developing codes of ethics is not an ultimate way to realize ethical practices within the organization, it also require the managers to communicate the ethics code and expects organizational members to model and embrace respective values across the business. In other words, ethics and professional code of conduct framework instill a corporate culture in which the members of the organization uphold each other values and mutually work to the attainment of organizational goals (Hanson, 2014). Alongside the fairness and justice approach, the utilitarian theory could also work effectively to resolve the ethical dilemma issues facing Uber Company. According to this theory, an appropriate ethical action should focus on providing the least harm and more good to others.
A suitable ethical corporate action at Uber must produce the greatest balance of good over harm. In this case, applying the utilitarian approach to the ethical dilemma would necessitate that all the stakeholders obtain considerable benefits from the operations of the firm. For example, employees at the company should be subjected to equal opportunities of career development and promotions without any form of discrimination.
International unethical problems of uber
Uber has expanded from North America to every populated continent. Although Uber was initially loved by many customers all around the world, the company caused globally unethical issues. In Bulgaria, people protest against allowing uber drivers to work without a professional driver’s license. As a result, Uber decided to shut down in Bulgaria although there was a petition for its services to be resumed. All uber drivers in Bulgaria had to quit their jobs as they were charged for indiscreetly trying to make profits without any proper licenses. Unfortunately, even innocent Uber drivers who had their licenses lost their jobs.
In Denmark, Uber unfortunately had to leave the Danish market. This is due to the fact that a new law that requires all cabs to install fare meters and seat occupancy sensors has passed. The law was like a death sentence to Uber because the company runs its business through only smartphone application as opposed to taxi that can be equipped with additional devices. Hugely frustrated with the law, Uber tried to paved the way for returning to Denmark and also urged civilians to protest against the Danish government. People won’t be able to relish using one of the most convenient form of transportations.
Uber in Italy was high in demand, but was temporarily banned. According to an article called “Why Using Uber In Rome, Italy Is Weird(But It Still Works)” by Natalie, it talks about how taxi drivers thought it is unfair that Uber drivers do not have to go through the same process of obtaining an expensive taxi license. As a result of protests, Uber stopped their services in April 2017. However, Uber soon resumed their services in Rome and Milan. Italy only allows Uber Black and Uber vans since it is mandatory for drivers to have the town car NCC license in order to operate. Unlike other countries where UberX and UberPOOL are available for most of times, Uber in Italy tends to be relatively more expensive than taxi on average.
In Hungary, Uber suspended its operations in Budapest in July 2016. Taxi drivers was not pleased by the fact that Uber company cars don’t adhere to the same rules that other taxi firms are bounded by. Therefore, a number of taxi drivers blocked the traffic in the middle of street and held protests. To illustrate this point, according to the article called “Taxi drivers in Hungary demand Uber to be shut down”, it talks about how Taxis blocked a major road crossing in central Budapest and drove around in city streets blocking much of the road traffic in the capital’s center. They said they would stay put until Uber was no longer download able to smartphones in Hungary. As this example demonstrates, taxi drivers were furious because Uber drivers receive same benefits as taxi drivers do without going through any particular steps other than just smartphone apps.
In Canada, Uber is on the verge of suspension because authorities consider passing new legislation that will investigate previous criminal records of Uber drivers. Jon Henley, the writer of “Uber clashes with regulators in cities around the world”, says “Uber has said it will suspend its operation in Quebec if authorities there pass new legislation requiring Uber drivers to undergo a police criminal records check and do the 35 hours of training expected of regular taxi drivers. Likewise, it becomes apparent that not everyone can work as an Uber driver due to the possible restrictive and severe regulations that may be imposed on them.
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