Ethical Challenges and Risks Faced by Uber Inc.

This report analyzes the ethical challenges and risks faced by Uber Inc. in the online transportation industry. It discusses the need for legal regulations to maintain ethical standards and mitigate risks.

Running head: BUSINESS ETHICS AND SOCIAL RESPONSIBILITY
Business Ethics and Social Responsibility
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EXECUTIVE SUMMARY
The primary aim of this given report is to analyse the case study of a multinational online
transportation company – Uber Inc. In the analyses of the case study, the description critically
answers the three questions that follow in the case study. The questions remains to be about
the ethical challenges Uber has to face because of the facility of peer ride sharing, the risks
that the mentioned company has to face and overcome in order to remain unbeaten in future
and whether the regulation of the disruptive model used by the business structure of Uber
needs to be regulated under legal implications or not. In this concern, after examining and
investigating the facts and factors about the Uber Company as well as the challenges and
risks associated with the same, the report tends to suggest that the legalisation of the business
model used by Uber needs to be done at the earliest to keep the ethical standards of the
business to an adequate level. The same will also help the company to mitigate the risk it has
to face and therefore earn a useful paradigm in the business market.

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Table of Contents
Introduction................................................................................................................................3
Ethical Challenges Uber has to face in concern of peer-based ride sharing..............................3
The risks that Uber will have to overcome to be successful......................................................6
Regulation to develop compliance with standards to protect competitors and consumers........9
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
The company under discussion in the given paper is named as Uber Technologies Inc.
Uber is renowned as an American transportation firm that works in the network marketing of
transport under a multinational aspect (Elliott 2015). The same is known to be headquartered
in the industrial area of San Francisco and is considering operating in over 785 number of
metropolitan cities in a comprehensive approach. Uber Inc. is significantly recognised to
deliver services to the society that consists of ride-sharing facilities for peer-to-peer pool car,
single ride services hail, delivery of food through Uber Eats and also motor-cycle sharing
system (Hasan and Birgach 2016). The field and ideology of Uber ride-hailing can be
accessed through the means of online websites and mobile apps. As investigated with the
help of the study that Uber business firm is known to indulge an approximate of 110 million
subscribers and users all across the world. Alone in the nation of the United States Uber is
recognised to have a significant market share of 69% and the food delivery app of the same is
perceived to have a market share of 25% (Das, Bhatt and Path 2017). This shows that the
Uber Company is succeeding and expanding its business into a higher aspect. In this
connection, the given report concentrates on discussing the challenges and risks as well as the
regulations that Uber has to go through based on the case study named as Uber Hits a Bump
in the Road.
Ethical Challenges Uber has to face in concern of peer-based ride sharing
As critically opined by Laudon and Traver (2016), Uber Inc. Company has gained a
recognisable amount of success in the market of the online transportation business and that
too, a short span of time. In the modern generation of digital lifestyle and change in
technological innovations, the people in the society are interested in the use of social, mobile
applications and digital services, wherefrom they can independently choose their rides, foods,

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ticket bookings and online payments as per their preferences and desires (Brown and Duguid
2017). Specifically, the people in the society at today’s date wishes every desire of theirs to
be fulfilled at a single click. Moreover, the recent development of technologies that allows
people to share networking services is gaining significant progress (Goldie 2016). This is
because it helps the people share their cost of fare and payments and therefore reduce their
pressure of high rates and charges. Thus, the same is relevant to the concerned company
under discussion here in the report. Uber allows its peer clients and customers to share their
ride-hailing through which the riders travelling along the same nearby areas of destination
can book their rides accordingly. This also provides the customers with new and exciting
experiences of meeting new people and sharing rides and economy on a daily basis. This
gives an approach to the new way and technologies of doing regular things in a different
manner. However, it was examined that this innovative strategy implemented in the
technology of Uber ride-sharing had caused the company to face several ethical challenges
concerning their service of peer-to-peer ride-sharing (Uber Pool) (Ferrell, Fraedrich and
Ferrell 2018). The same are specified as below.
No prior implication of government rules and policies
Studies show that Uber is known to follow its own rules and regulations and not the
laws and orders of the government (Rauch and Schleicher 2015). This turns out to be highly
unethical as the same provides freedom to the employees connected to the organisation of
Uber to carry on with unethical practices of doing their jobs. It was examined that the drivers
connected to the Uber Company are hired on a contractual basis, and the same is not directly
related to the working conditions of the business. This gives them the freedom to act and
perform the tasks on a personal basis and desires. Moreover, Uber is also recorded to adhere
to workplace discrimination amongst the gender of its employees, which leads to
demotivation and workplace harassment for female employees. Researchers show that the

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company was alleged of almost 200 cases of sexual assault and discrimination in its internal
and external workplace (Bull Schaefer and Crosswhite 2018). This, clearly states that the
company is an urgent need to implicate legal legislation in its working conditions in order to
keep its employees as well as business activities under strict eyes of law and rules.
Takes away business from professional drivers
As stated earlier in the report that the drivers connected to Uber are not their
permanent employees but are hired on a contractual basis (Hall and Krueger 2018).
Moreover, the drivers are not directly related to the internal activities of the company that
makes their employment to be a matter of question. Not only this, but the studies also
recorded that the drivers are not well-experienced as well as are unprofessional in nature
(Pandian and Kumar 2015). This is also a significant reason for the cases that are filed against
the Uber Company. Therefore, the job and the employment situation of the professional and
trained drivers are affected because of the unprofessional employment of drivers in Uber at a
contract basis.
High fares in emergencies and rise in demand
Another major unethical issue recorded with the Uber firm is that the same charges a
high amount of fares in the adverse conditions of emergency as well as peak time ride
(Matherne and O’Toole 2017). This turns out to create a wrong impression on the peer
customers as they get a mindset that the company is taking advantages of the natural
calamities and over demand and charging high fare prices from the riders. This, in turn, leads
to disinterest in the customers to avail the services of rides offered by Uber.
The drivers do not pay taxes as other taxi drivers do
As examined in the earlier parts of the study, the drivers connected to Uber are not
bound to any legal implications and laws. Therefore, the drivers do not remain strictly liable

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to pay the professional taxes for the amount of income they earn (Dolnicar 2019). In lieu of
this, the other taxi drivers are known to pay their taxes, and this creates a biasness in their
mind about the rules and laws of the government.
Exposes customers to risk
The drivers at Uber are found to inexperienced and unprofessional in their work (Tran
and Sokas 2017). This presents the customers connected to the company of Uber to be prone
to risks of accidents and unsafety. Several feedbacks regarding the same had also been
recorded against the drivers of Uber. Therefore, the same creates a considerable loss of brand
loyalty as well as customers to the concerned company. This becomes an unethical issue
carried by the company as the same can even endanger the lives of the people in the society.
No training provided to the drivers
Uber Inc. is recorded to not offer any training and development program to their
contracted drivers (Rogers 2016). This is because Uber works in a global perspective, and the
same fails to maintain the drivers they appoint on the contract basis, and this leverages
complete freedom to the drivers to work according to their wish. This affects not only the
image of the company but also the profit of the same.
The risks that Uber will have to overcome to be successful
As opined by Knechel and Salterio (2016), a business company is known and
successful by the manner it handles the risks that occur in the firm and mitigates the same.
The company of Uber uses a disruptive business model and marketing strategy for its
business activities. In this connection, the risks that the company becomes accountable to
manage in its future considerations are determined as below.
Drivers

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The drivers connected to the work synergy of Uber are known to increase day by day
at an alarming rate (Ahsan 2018). This leads to a decrease in the number of customers per
driver who are connected to the ride services of Uber. In this connection, it was found that the
drivers get frustrated because their income-sharing decreases and they do not feel like
accepting the rides of the customers. Therefore, the working structure of Uber should
concentrate on decreasing their drivers who are not efficient and focused on recruiting and
connecting with competent and skilled drivers. This will change the condition of the business
organisation to gain a capable paradigm and also help the same to mitigate the risk as well as
the occurrence of the same. The company will not just be able to achieve a useful paradigm
but also reduce the number of unethical issues that occurs in the business.
Surge Pricing
The concerned company is recorded to work with the pricing strategy of surge price
synergy. This means that the company increases its charges and fares of the ride as per the
demand of the customers, the natural calamities and even on the day of holidays. This,
however, benefits the profit and revenue ratio of the company and the drivers, but the same
disrupts the interests of the customers, and they do not appreciate the fact. In this connection,
there is a high level of risk for the company to lose its customers and brand and customer
loyalty. Thus, the report tends to state that Uber should re-structure its pricing strategies and
plans based on the benefits of the customers as well. This is because at the end of the day the
customers are the only ones who would provide the company with the required amount of
profit and if the customer shifts from one company to another, the profit earnings ratio of
Uber will decrease in a devastating way.
Competitors

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As critically opined by Sadgrove (2016), any productive business entity has a higher
amount of risk of competitors affecting its business position and competitive advantage in the
business market. The same is accountable for the company of Uber too. The intense
competition that Uber faces in its online transportation market is a significant factor of risk
that the company has to bear. This is because the competitors take away the interest of the
customers to shift towards them when the Uber fails to fulfil the demand of the customers.
This is termed to be a significant risk for the company as because the competitors do not shift
the potential customers of Uber to themselves but the same also, directly and indirectly,
affects the positioning and the monetary benefits of Uber. This is because the position and the
profit get shared when the customers shift. In this connection, the potential rival companies of
Uber were recognised to be Lyft, Ola and Careem. In this concern, the study tends to suggest
that Uber should concentrate on building a significant research and development team that
would study the market structure and undermine the strategic implementations of its potential
competitors and make necessary changes in its own business proceedings and mitigate the
amount of risk that the same has to suffer because of the competitors.
Rides
As stated by Tanenbaum and Bos (2015), the customers in the modern generation
want to get the best at the least of the price. In this connection, Uber should focus on
providing free demo rides to the customers that would grab the attention of the customers
towards the marketing strategies of Uber and keep the same ahead of its rival companies.
Moreover, the offering of free demo rides will help the company to get new users and
customers and increase their profit and mitigate the risk of losing the competitive advantage
and benefit.
The risk in the international expansion

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As examined by the studies, it was investigated that Uber is trying to expand its
business outside the boundaries of the nations it is operating at the present date (Cherry and
Aloisi 2016). This increases the operational risk for the company. This is because the ratio of
taxis in other nations is higher than compared to the country already Uber operates in. This
brings a risk of competition in between the Uber drivers and the traditional drivers and also
the ratio of fares and cost amongst the same. In this connection, the report suggests that Uber
should build a competitive advantage in the market by providing better offers and
opportunities to the customers and attract the same in the new market of expansion. This will
help the company to mitigate the risk that would come up in terms of expanding the business
in other international sectors.
Regulation to develop compliance with standards to protect competitors
and consumers
According to the viewpoint of Stewart and Stanford (2017), the new disruptive
business model of gig-economy of Uber should be regulated at the earliest time possible. This
is because studies show that the new business model is not executively understood by the
government since it's the latest form of the business model and innovated at the current times.
The failure of the government to follow the same is resulting in discrepancies in the
organisation as well as its other peer competitors. This is because the same is affecting the
safety and protection of the customers, and therefore, the customer feels unsafe about riding
through other online applications too. As the studies show that the new business model is not
just used by Uber but all the productive online mobile applications that deal with the ride-
hailing facilities, food delivery services and the online delivery of goods and services. This
sharing economy is recognised to be the result of the new business model that has been
known to facilitate the fast and rapid development of digital technology (Cramer and Krueger
2016). The activities in the shared economy effectively promote the required and practical

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resources that are used in the synergy of increased competition and innovation. This
innovation may occur with the means of new technological advancements or introduction of
new products and services and even through the entirely new sources of value chain supply in
the market. In the concern that the market condition is to be revolutionised with the terms of
innovation, often the rendering of the complete business model is changed to be a disruptive
model. Therefore, the same is known to be innovated through the help of disruptive
innovation in the model concerning digital sharing platforms.
In this connection, as found in the online passenger transport as well as
accommodation market of Uber, Ola, as well as Lyft, have thoroughly introduced the use of
the new business model in their working structure which has altered the future of the market
supply of hailing rides. The development of the same is facilitated by the adoption of high
internet usage, the advanced technology of the smartphones as well as the user-friendly
applications and websites that helps the customers to use the same in a comfortable and
considerable manner. The sharing of these platforms of business models and ideas have
introduced significant benefits as well as strengths and opportunities for both the suppliers of
the products and services and the receivers (customers) of the same. Not only this, but this
digital platform also challenges the traditional way of performing business activities in the
market (Parker, Van Alstyne and Choudary 2016).
Moreover, it is also recognised that the IT technology used in the synergy of the
business models has facilitated the effective change in the product as well as the service
market if the online transportation business. The same has also altered the functions and
processes of the connected business organisations in concern with the labour market. This
technologically driven approach will help the companies to gather cost-effective method of
leading the business market by making less use of permanent employees and instead of hiring
the employees at a contractual basis and let them work independently to earn on their own

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capabilities. This also creates the opportunity of new employment process all across the
global world. The people with the affiliation of the weak labour market will be benefited by
the same. In addition to this, it was also recognised that the same brings a massive challenge
for the business organisations in terms of low wages, weak rights for persons performing the
jobs in a professional way as well as the underemployment or over-employment.
Based on the above shreds of illustration, the report tends to state that the expansion
of the shared business model to Uber as well as other online business industries should be
strictly regulated under the legalisations of laws and orders (Dudley, Banister and Schwanen
2017). This is so because the same will help in building and developing compliance
concerning the standards of safeguarding and protecting the competitors as well as the
consumers. The same would prove useful because the adherence of laws and orders will keep
the employees in the boundary of performing the activities in a legalised and ethical manner.
The employees will not carry up any unfair means of doing business as well as practice any
unethical activity that harms the safety of the customers and the brand image of the
organisation.
Conclusion
Hence, to conclude, the study tends to state that a business organisation is liable to
face many risks and challenges in consideration of growing and expanding itself. As critically
examined in the above report that Uber has dramatically received a higher paradigm in the
online business of transportation management, the same however lacks behind in the
management of its diversified employees. Gaining financial stability is not the only factor
that makes a business successful. In order to remain at the highest position and retain itself in
the business market for a long-term, the business organisation has to manage its ethical

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standards as well as strategical implementations in a way that it benefits the synergy of all the
stakeholders connected to the same.

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