Ethical Issues at Deliveroo: Analysis and Recommendations Report

This report delves into the ethical challenges faced by Deliveroo, a food delivery company, focusing on issues related to the denial of legal rights to its riders, who are classified as self-employed contractors. The report is divided into two parts: the first part identifies ethical issues such as the legal minimum wage and paid holiday discrepancies, analyzes the impact on stakeholders like employees, customers, and the community, and provides recommendations for ethical improvements. It also examines the application of utilitarian and deontological ethical theories to the case. The second part shifts its focus to SAS institution, a software based company that perform its operations ethically and highlights the characteristics of ethical leadership and practices that contribute to organizational value. The report concludes with recommendations for Deliveroo to improve its ethical standing and comply with labor laws.

ETHICS

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
(A) Description of issues and recommendations to overcome them......................................1
B) Application of ethical theory and reflection......................................................................5
PART 2............................................................................................................................................7
What make an ethical leader that manage business to high ethical standard.........................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1

INTRODUCTION
Ethics refers to the branch of philosophy that consists of defending, recommended and
systematizing concept of right as well as wrong conduct. In business, ethics plays an essential
role by guiding them to perform right conduct which are ethically right and provide benefit to its
stakeholders. This report is based on Deliveroo, a London based company which take order from
its customers online and deliver them with food from the restaurant which they prefer. Main
purpose of this report is to identify the ethical issue which company is facing due to denied legal
rights of its rider by specifying them as self-employed contractors (Aloisi, 2015).
This report is divided into two part where section one contain an elaboration about ethical
issues along with their dimensions and role of business within society. It also describe about
different stakeholder of company and impact of issue over them along with examples of impact
of good or bad ethical practice over an organisation and recommendations for ethical issues. In
addition to this it also elaborates about the ethical theories and their implication over ethical
issues of an organisation. In section two it contains a description about SAS institution which is a
software based company that perform its operations ethically. This part also includes
characteristics of ethical leader which support them in managing business with high standard. It
further describe about the practices that make an organisation unethical along with practices that
make SAS to create organisational value at marketplace.
PART 1
(A) Description of issues and recommendations to overcome them
Deliveroo Couriers is a one of the most successful online food delivery organisation
which take up food from restaurant and deliver it to customer's place. In this, people place order
related to food items over the website of this company which is then taken up from the restaurant
and transfer it to asked place (Fumagalli and et. al., 2018). But recently employees of Deliveroo
has claimed that their rights are denied by the company and they are not treated ethically in term
of their working condition (Deliveroo couriers win six-figure payout in employment rights case,
2019). This case has been filed with the help of Independent Worker Union of Great Britain
against company for gaining their rights as a worker.
Ethical issues, their dimensions and related ethical questions:-
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The case filed by riders of Dileveroo because company is involve in some unethical
practices which is harming up the rights of employees. Following are the ethical issues that are
involve in Dileveroo case: Legal minimum wages issue:- From the report it has been found that the riders of
deliveroo company are receiving money as per their contract and not according to the
legal minimum wage system (Serafini and et. al., 2018). This is an unethical practice as
some of the employees are gaining only £2 per hour and as per the National Minimum
Wage Act 1998 an employee must get around £7.83 over the age of 25 and £5.90 below
it. Hence this is an ethical question for the company as it denying the rights of its worker
by exploiting them in term of their pay.
 Paid holiday issue:- Another ethical issue found in this case of Deliveroo is that
company pay only up to the work performed by them and doesn't get any money when
they are not logged in to their id. This is an unethical practice because employees are not
getting pay over their sick or other sort of leaves. But as per the UK government all the
workers are entitled to get around 5.6 weeks' paid holiday within a year. It includes all
sort of employees whether they agency worker, irregular hour or zero hour contract
worker (Holiday entitlement, 2019). Therefore, it is an ethical question because
employees are not getting their proper wage even over the holidays that are fixed by
government.
Number of factors and ethical questions involved in issue:-
There are number of factors which leads to unethical practice performed by the Deliveroo
company which leads to denying of worker's right during their work. Following are the factors
behind these ethical issues:
 Management perception:- The main reason behind unethical practices is that
management of Deliveroo is not giving due importance to its worker rather it focuses
over paying on the basis of work performed by them (Pearson, 2017). The policies of
company work over a rule that employees will be paid only for the time when they are
logged in and offering services. Hence it is an ethical question that even if they are paid
as per the working hour still they are not getting minimum wage which is fixed by
government.
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 Self employed:- This is the another factor which leads to arose of ethical issues, as
according to the Deliveroo its workers are self employed which work over hour they feel
convenient and are able to place their substitute when they are absent. So, because of
these factor company get move toward adopting this unethical practice of denying
employees legal right.
Role of business in society:-
Main role of a business within society is to offer product or services that help in fulfilling
the need and demand of customer (Goss, 2015). But apart from this a company is also
responsible for performing such actions that contribute toward improving the living standard of
people and promote welfare of society. For this an organisation must involve in CSR activities
that work toward providing benefit to both internal as well as external stakeholder of company.
A company is consider as ethically responsible only when they work toward solving the issues
faced by society either by providing fund to needy people or by perform certain actions toward
the improvement of condition. On the other side, an organisation is also consider ethically right
when they treat its employees fairly by formulating several policies as well as managerial
practices in their favour.
Key stakeholders and how they get affected:-
Stakeholder refers to the group of person who own up a share of interest within the
company and being affected by objectives, policies and decisions taken by organisation (Bendell,
2017). Stakeholders are of two type i.e. primary ad secondary.
Primary stakeholders:- These are the one who get directly benefited or being affected
by the activities performed by other company and their dissatisfaction may lead to heavier loss.
Following are the primary stakeholder of Deliveroo and ways in which they get affected by the
current issue of company: Employees:- Unethical practice of Deliveroo company like unpaid holiday and less pay
then minimum wages that its rider are working as self-employed worker and not liable for
minimum wage as well as holiday pay affected employees up to a great extend. The
reason behind this is that they are not getting required pay over their efforts toward
company's growth and they are also getting exploited (Dentchev, Haezendonck and van
Balen, 2017).
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 Customer:- This issue also has an impact over the customers of Deliveroo as they are
losing their trust toward company which in turn also affect its image at marketplace.
Apart from that customers are getting affected by this because due to dissatisfaction of
employees leads to delay in delivery of food and quality of their services are also getting
down.
Secondary stakeholders:- It refers to the group of stakeholder who do not get engaged
in direct economic exchange within business but get affected by the actions taken by a company
(Davies, 2016). Following are the secondary stakeholder of Dilveroo and manner in which they
get affected by the case of company:
Community:- It includes number of groups which work toward the welfare of society by
forming up certain standards or norms. Deliveroo is performing these unethical practices toward
the payment of employees which can also encourage other business to perform such practices in
order to maintain their profit ratio. This may affect the community groups as their norms will be
breached by other business which leads to increase in exploitation of employees and these group
will not be able to maintain their goal of providing justice to workers within society.
Media:- These unethical practices of Deliveroo may also affect media as there are
number of channel which company uses in order to promote its brand as well as services at
market place. So after getting informed by this issue public may loose there trust among the
media company which promote Deliveroo. Hence it affect their business, market image as well
as profitability of media business.
Examples of impact of right/wrong ethical choice over business
Ethical practices plays an essential role over the growth or success of a company but in
order to achieve that it is very essential for a business to make right choice of ethical practices.
As the wrong selection of ethics may lead to failure of business or sometimes result in heavier
loss to company (Revelli, 2017). Following are the example of positive or negative choice of
ethical practice as well as its impact over business: Positive:- Salesforce.com donated millions of dollar toward technology and education
grants as well as also discounted its services to Non-profit organisations. In addition to
this employees are encourage toward work by providing them a six days of per year to do
charitable work which they want. This right ethical choice make this company ranks
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highly in the list of best company which offer best hourly rate and best salaries to its
employees (Ethical Corporate Policies, 2019).
 Negative:- McDonald's despite of global success, it remain target of vitriolic public
backlash it pay 20% less than federal minimum wage to its teenage employees. This bad
business ethics leads to negative publicity in market which also somewhat lead to
increase in employees turnover that affects its quality of performance.
Recommendation
After performing a research over issues faced by Deliveroo company it has been
determined that company must try to involve in ethical practices in order to improve its image in
marketplace. These recommendations are explained below:
 Deliveroo company must fix the pay of its employees as per the minimum wages per
hour fixed by government. Company is also recommended to offer its employees some
holiday benefit such as offer them sick, maternal and paternal leave options.
 It must also focus toward including Corporate Social responsibility practices in their
organisation by improving their policies toward employees. Management must contribute
toward improving the working condition of employees by forming several policies
toward the welfare of its riders such as health care and other compensatory benefit.
B) Application of ethical theory and reflection
There are two ethical theories i.e. utilitarian and deontology which guide up people about
ways in which a person can choose best action when there is an ethical dilemma related to right
or wrong. Both the theories are different in term of their selection of ethical actions which can be
better understood using following description:
Utilitarian ethical theory:- As per the view point of Brunon-Ernst, A. (2015) ethical
theory which differentiate among right or wrong practice by focusing over the outcome of
particular action. According to this theory a action must be perform which benefit larger number
of people. In current case of Deliveroo the denying of employee right in term of hour pay and
unpaid holiday, employees are getting affected by these practices. But on the other side company
is able to recruit more employees by saving cost and this larger workforce providing quick
services which benefit customers as well as channel partners like restaurant, food outlets etc. In
addition to this investors are also getting benefited in term of gaining high return over investment
as company is earning more benefit. So, as according to this ethical theory majority of
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stakeholders like customer, investors and channel partners will be benefited by these practices
and only employees will get affected. Hence, according to this theory majority of people get
benefited with this action.
Deontology:- According to Dougherty, T. (2013), theory focuses over a rule that
distinguish between right or wrong which work over universal moral law which state that don't
lie, don't teach and don't steal. This theory suggest that people must follow this rule and perform
their duty which doesn't consider its outcome. In present case of Deliveroo company was
required to focus over formulating effective managerial practices for providing its employees
favourable working environment which encourage them to work harder toward the
accomplishment of organisational goal. Because it is the duty of company that it must provide its
employees a better environment to work their riders are performing their duty and working
toward the accomplishment of organisational goal. So, as according to this theory Deliveroo
fails in implementing these practices as it doesn't consider the universal rule of Don't lie and
Don't cheat . Hence company is ethically wrong in its practices and it must work over improving
its policies toward the welfare or benefit of employees.
Reflection:
From the study or implication of these two theories over the case of Deliveroo, I have
assumed that both the theories are totally different in term of their principles. As utilitarian
theory focuses over weighing the cost as well as benefit from the outcome of particular situation
in order to determine the action to be perform which is ethically right. In this theory only that
action is consider right which benefited the large number of people and as per this theory the
Deliveroo company is right in term of its behaviour toward the employees. But as according to
me this Deliveroo company is ethically wrong because it is not paying off properly over the work
of its employees even though it benefit other stakeholder.
Apart from this Deontology theory is just opposite of utilitarian theory as according to
this people must follow three universal rule i.e. don't lie, don't steal, don't cheat and perform
their duty. This theory emphases over the fact that a person must not compromise over its
professional code of ethics. According to this theory Deliveroo is wrong in term of its behaviour
as well as practices it have toward its employees, because they must get payment for what they
work within the organisation.
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From the above two theories I believe that deontology ethical theory is best as it suggest
Deliveroo to perform ethical actions for its employees that are contributing toward the
accomplishment of their goals. In addition to I also suggest that as per this theory company must
focuses toward considering all the legal standards in term of employee salary, benefit and
payment compensation as it is their duty which is fixed by government. By considering all these
employee benefit standards or law Deliveroo will be able to maintain its business with high
standard which also leads to organisational goodwill and success at marketplace.
PART 2
What make an ethical leader that manage business to high ethical standard
Ethical leadership refers to the set of actions performed by a person by considering
ethical beliefs or values and also respect from the dignity of its follower. These practices of
ethical leader benefit both organisation as well as employees (Fehr, Yam and Dang, 2015)).
Following are the characteristics of an ethical leader:
 Justice:- An ethical leader is one who always remain just and fair toward its follower by
avoiding favouritism. A ethical leader always focuses on avoiding and becoming bias and
try to provide equal opportunities to employees so that they can enhance their working
capability which benefit both customer as well as organisation.
 Honesty:- An ethical leader is one who is loyal and honest because this help them in
gaining trust as well as confidence of employees. A leader is ethical when it remain loyal
to its follower and maintain a transparency while communicating higher management
message.
 Respect others:- Most essential characteristic of an ethical leader is respect it offer to its
employees by listening to them and valuing their contribution by regularly appreciating
them over their efforts toward organisational practices (Lin, Ma and Johnson, 2016).
I currently working as a manager in SAS institute which is a software company and also
operates its operations ethically. Being a manger I follow several ethical standards in order to
manage business with high ethical standards. I remain fair to all my employees and provide
justice to them whenever they are having any sort of issue while they are working. As quite
similar role is played from my side which depicts and justifies my image as leader too. The
functions which are requires to perform by leader and manager are quite same in nature such as
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planning, monitoring, controlling etc. Along with that, the different qualities which are necessary
to be ethical leader is requires to have by manager too. In the same case, I have necessary skills
which are applied by me successfully in organisation to bring ethical standard working within an
organisation.
In addition to this I also ensure that employees will get equally opportunities must not be
discriminated on the basis of their rationality, gender or age by their colleagues. Apart from this I
always present respect toward my employees as it is my personal ethics which doesn't allow me
to misbehave or disrespect others at workplace.
Conditions that make an organisation unethical
There are some practices which sometimes either intentionally or unintentionally
performed by a company that make it unethical (Davies, 2016). These practices must be avoided
as it may affect its brand image at marketplace that may also leads to business loss. Following
are the practice that make a company unethical:
 One of the highly performed unethical practices is discrimination on the basis of gender
in term of providing opportunity or paying off salary to employees.
 Favouritism performed among two employees is another major unethical practices that
usually performed within the organisation while providing opportunities.
 Payment of salary to the employee which is below then the minimum wage amount fixed
by government.
These all are the managerial practices which make an organisation unethical and also
bring dissatisfaction among employees that have an huge impact over the goodwill of company
at marketplace (Freeman, 2016). To achieve high standard practices and success at marketplace,
it is very essential for an organisation to work ethically that help in creating value in front of its
stakeholder by focusing on removal of such unethical practices (Ethical Corporate Policies,
2019). SAS institute follows ethical practices and values it create ethically is explained below:
 Employees at SAS get benefited with Montessori child care, access to free health centre
and unlimited sick time. This will results in creation of trust among the employees
towards the services of an organisation and the practices which are implemented by
manager.
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 Company support education philanthropy which promote science, engineering,
technology, mathematics program for children. This will also help to get the support of
employees as it ensures the future of their children.
CONCLUSION
From the above given report it can be summarised that ethical practices plays an essential
role within the growth and success of many businesses as these practices affect the image of
company in front of stakeholders. In order to perform its operations ethically a business must
determine impact of ethical issues over stakeholders so that proper action can be taken in order to
improve its practices. A company can also follow ethical theories in order to determine what is
ethically right or wrong. But in order to perform operations effective a manager must be posses
ethical characteristics such as justice, honesty and respect for others. These practices help them
in achieving high standard practices and creating organisational value.
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REFERENCES
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