Ethical Challenges Faced by Uber in Using App-based Peer-to-sharing Technology

This report discusses the ethical challenges faced by Uber in using app-based peer-to-sharing technology and the risks the company needs to overcome to be successful.

Running Head: Comparative Business Ethics & Social Responsibility
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Running Head: Comparative Business Ethics & Social Responsibility
“Uber Hits a Bump in the Road”
SystemJP
5/28/2019
The report is prepared so that ethical decision taken by the company
Uber can be explained. In the working organization of Uber there
were many implications and the legal issues which were addressed
such as the drivers are not licensed, they were not putting major
focus on the safety measures of the customers, they were also
charging higher prices when the demand is high and the supply is
lower. So these were some ethical issues which were solved by
adopting the rules and regulation governs by the government. These
issues can be overcome when the company will comply with the

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statutory requirements and follow the rules and principles which are
govern by the government.

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Contents
Introduction.............................................................................3
What are the ethical challenges that Uber faces in using
app-based peer-to-sharing technology?................................4
Since Uber is using a disruptive business model and
marketing strategy, what are the risks that the company will
have to overcome to be successful?.....................................6
Because Uber is so popular and the business model is being
expanded to other industries, should there be regulation to
develop compliance with standards to protect competitors
and consumers?.....................................................................9
Conclusion...........................................................................11
References...........................................................................12

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Introduction
Uber Technologies Inc. is the transportation company which
offers the services of the peer to peer ride sharing. The
company was founded in the 2009 March, 10 years ago. The
founder of the company was the Garrett Camp Travis
Kalanick. The company was operating its services in the 785
metropolitan areas. The company has the headquartered in
San Francisco, California. The company has more than 110
million worldwide users. The pricing system for the riding
with Uber is dynamic as it was based on the supply and
demand of the ride. The drivers of the Uber use their own
car and some drivers also taken the rent, lease so that to
offer the services (Fleetwood, 2017).
In a very short period of time, the Uber becomes very
famous and the demand of the customers for booking the
ride is increasing. But later on, the company continues to
thrive. Uber hits the few bumps in the road by charging
higher prices than the expected rate. As the other taxi were
charging higher than the Uber earlier so many customers
has grabbed with the Uber (Sampson and Makela, 2014).
But when the success has created in a very short period of
time then many challenges have to be faced by the
company. They were doing the unethical things and were not
following the rules and regulation formulated by the
government of the country. There were many lawsuits also
which has been faced by the Uber. One of the major issues
faced by the Uber was that their drivers are not licensed so
the legal action is taken against the company. Not only
license but also they were not concentrating on any safety of
the customers and the drivers so these issues lead to the
major problem for the Uber. In this report, these issues were
stated and the marketing strategy to overcome with this is
also stated (Bales and Woo, 2016).

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What are the ethical challenges that Uber faces in using
app-based peer-to-sharing technology?
There are many ethical challenges which the Uber faces and
also has the serious ethical implication on the drivers. The
app of the Uber has forced the employees to do the work
even when they have reached the desired results. As there
is no proper work and the life balance so the Job of the Uber
doesn’t fit many employees and it is not suitable to work at
that place (Watanabe, et al., 2017). The Uber doesn’t give
any appropriate place of working to the employees of their
company which results in losing their interest. Uber doesn’t
have any commitments with any employees and they don’t
even offer the good or the conductive working place. The
drivers of the Uber are not their employee’s built they are the
independent contractors or the ideal partners. The driver of
the Uber is only hired when they sign up with the
requirements or the demands made by the company. The
drivers have to fulfill the demand before entering into the
contracts so that they can work with the Uber. The training is
also given to the driver of the Uber on the basis of that you
are the partner and this is what is expected you. The Uber
drivers are not the full-time employees so they are appointed
for the time when the customers book the cab (Gilson,
2014).
In a very short period of time, the Uber has become very
famous and successful. Nowadays people used mobile apps
and the updated technologies to book anything such as
whenever anything has to book the digital services are used.
Such as in booking the hotel, food, shopping the digital
devices is used (Liechtung, 2018). Just like that only Uber
has provided the facility of booking the cabs so that
whenever any customers want to book the can for going
anywhere they can use this facility. Dome of the major
ethical problems in the Uber are stated below:

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 As per the business practice the Uber has to follow
the rules which are governed by the government of
the country but as per the Uber, the company has
created its win rules and regulations (Royakkers, et
al., 2018). Uber doesn’t care about the rules made by
the government of the country they always do the
business in the unethical and the unfair way (Ferrell,
et al., 2019).
 There are many drivers in the country which are
professional in driving, so Uber has taken them which
were creating the problem for the country. Nowadays
no experienced drivers are left whenever needed
(Javed, et al., 2018). Not only about the experienced
but also these drivers pay the taxes to the
government but now when they are taken away by the
Uber they were not even paying the taxes.
 Uber charges higher cost when there is higher
demand and emergency situation raises in the
country (McNamara, et al., 2018). As when there is
some natural calamity occurs or when there is the
wedding season the demand for the Uber drivers are
much higher so they increase the fares at that time. It
is unethical for the company as to charge the higher
prices at the demands are not as per the rules.
 The other professional drivers pay the tax to the
government but in case of the Uber, the driver doesn’t
pay the tax which is unethical and also the Uber is not
following the rules of the government.
 Another unethical work which the company was doing
is that they were exposing the consumers to risk like
accidents, personal safety, etc. Uber doesn’t give any
kind of the safety measures to any customers which is
unethical as being the good company Uber has to
safety measures to his daily customers.
 The profits achieved by the drivers of the Uber are
higher as they don’t have to pay any kind of the taxes

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and Uber also doesn't provide them the training,
insurance, car, etc. which increases their profit (Chen,
et al., 2013).
So there were many ethical challenges which the Uber faced
with its self-driving technology with alleged trade secret and
patent violations. Uber has faced many unethical challenges
in the form of social, ethical, legal and regulatory obstacles.
The other taxi companies have to take the license before
driving but in the case of the Uber, they don’t have to take
the license (Eisenstadt and Geddes, 2018). So the biggest
issue which the Uber faces were lack of adequate insurance
coverage and the protection of the customers as the drivers
are not licensed.
Since Uber is using a disruptive business model and
marketing strategy, what are the risks that the company
will have to overcome to be successful?
There are many challenges and the risk which the Uber has
to face so by making the proper strategy the company will
overcome with that. So the risk from which the company has
to overcome is stated below:
Drivers: The number of drivers is increasing by the Uber
which was one of the risky steps taken by the company.
When the number of drivers will increase than the number of
customers will decrease as the number of accessing the
customers will reduce by increasing the drivers (Strech, et
al., 2013). It will also impact on the money earned by the
drivers. The drivers will get frustrated when they will be
earning less money so it is risky to increase the number of
drivers. So to overcome this problem the company can find
the accurate number of the drivers so that the drivers don’t
face the problem of high earning.

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Fares: The fares of the Uber are very convenient for all the
customers. As every class can easily afford the fair price of
the Uber as it is convenient and easy to operate. The fare
price of the Uber is less than the taxi price so many people
can easily afford it. But if the company increases its prices at
a high rate then it can cause a serious problem as many
customers will choose the other taxi rides instead of the
Uber (Heimans and Timms, 2014). So this can be a risky
thing for the company so it is suggested that the company
Uber should charge the prices which are affordable by the
customers and are relevant for making the profit in the
company.
Surge pricing: Surge Pricing is the pricing in which when
the demand of the customers are higher for riding then the
prices are charged high. When the demands are excessive
high then more drivers are demanded and when the drivers
are not enough then prices are charged high (Heimans and
Timms, 2014). When fares are charged above the normal
fares then it becomes risky for the company as the
increasing price can losses the regular customers. In surging
pricing, the prices are charged at the double or at the triple
rates. So to overcome this risk the company should charge
the fixed fare instead of how much demand is there in the
market.
Competitors: Uber has many competitors in the market
which are causing risk for the company as the profit of the
company get affected due to the increase in the competition.
There are many companies who are dealing in the same
services such as Ola, Grab, Lyft, Curb, Didi Chuxing, etc.
(Crespo, 2016). The Uber is the ride-sharing company while
its competitors also give the services in the same way. So it
becomes very challenging for the company to compete them
so the Uber charges the prices reasonable as a comparison
to the other competitors otherwise it becomes very risky for
the company to compete in the competitive market.

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Taxes: The biggest challenging thing which the Uber faces
were the problem of the taxes. The drivers of the Uber are
not liable for paying any tax but the company is liable for
paying the tax. All the revenue payment from the ride is the
subject of the tax for both state tax and the city tax which
becomes very risky for the company to pay. So to overcome
with this the company has filed the complaint about the
burden of the tax liability should become on the drivers.
Lack of professional drivers: If the company Uber will
appoint some drivers who don't have any professional
experience that it can create a major risk for the company.
As the experienced drivers only know how to drive properly
so they can protect the customers with the proper ride
(Dudley, et al., 2017). But if the inexperienced drivers are
appointed than it can create the risk for the company and
also cause the major risk for the company. The passengers
are on the risk made if they are driving with the
inexperienced driver. So it is important for the company to
appoint only experienced drivers so that risk in term of the
safety of passengers can be done.
Free rides: Another biggest issue or the risk is the free
rides. The free rides are provided to the passengers for the
first rude. Free rides are also offered to the passengers
when they avail the discount or it is offered to the regular
customers for some terms and conditions (Wirtz and Tang,
2016). But these free rides are very costly for the company
which becomes very risky for the company to bear the
expense. As the cost of the driver, petrol, car, and etc. all are
included in that and when the free rides are charged the
company has to bear this expenses which becomes very
costly for the company. So to overcome this risk the
company has to charge certain charged from the passengers
instead of giving them the free rides.

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Because Uber is so popular and the business model is
being expanded to other industries, should there be
regulation to develop compliance with standards to
protect competitors and consumers?
The business model of the Uber has used the mobile app
through which only the cabs are booked. So the competitor's
company is also using the same models to replace the Uber.
So the rules and regulations are made by the government to
protect the Uber from its competitors that same business
model cannot be used. Uber was very popular so it doesn’t
follow the certain rules and regulations which have to be
followed. So the company has to comply with the rules and
regulation so that proper ethics can be maintained. By
following the rules the company will have the right to fight
against their competitors (Sundararajan, 2014).
The service offered by the Uber is new which was not
offered before by any company. There are no as such rules
and regulation for this kind of the business but every country
has the lawsuit which the company has to follow. Like other
business has some regulations while conducting and
operating any business activity, similarly Uber should also
have some rules and regulations so that it is easy to book a
ride (Posen, 2015).
As per the consumer protection law, this law helps in
protecting and governing the right of the consumers. When
the drivers drive the car without any license and before
taking any safety measures then it is risky for the customers
to take the ride. So the laws are made by the government
that license is required by the drivers of the Uber so that
safety can be protected by the consumers (Tippett, 2018).
The government also made the rules the person who is
driving should drive the car in full stability. He is not allowed
to drive the car if he was drunk. As per the rules if any

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person drives while having alcohol then his licensee is
ruined and penalties are also imposed.
As per the regulation of the government to protect the
customers, it is important to wear the seat belt by the person
who is sitting as well as the driver so that safety measures
can be kept in mind. As per the rules and the regulation of
the government the driving should be made on the normal
speed. The driver should drive in the speed limit; he should
not make the excessive speed which starts harming or
destroying the customer. So the rules are made that speed
should be normal while driving and if that speed cross by the
person then penalties are imposed on them (Watanabe, et
al., 2016).
The government also has made the rules for the competitors
of the Uber that nobody can start this business without the
permission of the government. For starting this type of
company the license has to be taken by the drivers then only
they can drive the customers (Ovide, 2012). The rules are
also made that the competitors have to comply with certain
details only then only they can start a similar kind of the
business. The competitors should have the ethical rights and
they should know that while driving the cars the license is
must require.

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Conclusion
From the above report, it is concluded that any business
should be work in an ethical manner so that they can get
success in future also. As Uber was becoming very famous
so their business model was influenced by many companies.
The competitor's companies of the Uber are offering the ride-
sharing services in a similar way. The report has explained
the issues and ethical challenges which the company faces
while providing the services to its customers.
Due to the aggressive corporate culture of the Uber, the
resignation from the post of the CEO was done by the
Kalanick’s. The biggest issues were that the drivers are not
licensed and the company was not focusing on the safety
measures of its drivers and the riders. So for achieving the
long term success and for grabbing the trust of the
customer’s these issues has to be addressed by the
company. The company has to operate its functions in an
ethical manner and should comply with the rules and
regulations of the company so that trust can be upheld and
success can be achieved.
In this report, certain challenges and issues are addressed
such as the Uber doesn't give any appropriate place of
working to the employees of their company which results in
losing their interest. Uber doesn’t have any commitments
with any employees and they don’t even offer the good or
the conductive working place. The drivers of the Uber are
not their employee’s built they are the independent
contractors or the ideal partners. In this report, the
government rules and regulations were also explained which
has to comply with the company so that consumers can be
protected.

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