Ethics and Governance: Examining Uber and Deliveroo's Business Models

This essay critically examines the ethical and governance practices of platform-based peer production systems, focusing on Uber and Deliveroo as case studies. It discusses the controversies surrounding these companies, including labor issues, sexual harassment allegations (in Uber's case), and the treatment of drivers and suppliers as independent contractors to avoid employee benefits. The essay analyzes these practices through the lens of ethical theories such as Utilitarianism, Deontology, and Virtue Ethics, concluding that the operations of both companies often fall short of ethical standards due to their prioritization of profit and growth over the well-being and rights of their stakeholders. The analysis highlights the importance of ethical considerations in the rapidly evolving platform economy and suggests a need for greater accountability and regulation to ensure fair treatment of workers and customers.

Running head: ETHICS AND GOVERNANCE
Ethics and Governance
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Introduction
In this essay it is explained that whether the elements of this system are correct in claiming that
the organizations that are based on platform based peer production system have affected the
society positively or who believes that operations of such organizations are unethical inherently.
The above-mentioned discussion will be done on the companies Deliveroo and Uber that have
been chosen as these companies are based on platform based peer production system.
Common based peer production that is also known as platform based peer production is defined
as a socio-economic activity. It has been argued by Paquette, Sommerfeldt and Kent (2015)
usage of new internet services and technology is involved by the system of services and goods.
In the field of technology, there was the growth and development of the platform based peer
production system. The purpose of this system is to get together thousands of people to share the
knowledge, cultural goods and information effectively. However, there are several organizations
that was built on such platform based peer production system that does not have the rigid
managerial hierarchy that are not subjected to market pricing that is very competitive. There are
many factors that include unique technologies and innovative software that have been
contributed to make the company develop that is based on Platform based peer production
system.
Discussion
The model of the platform based peer production, was firstly developed by Yochai Bnekler, a
professor of Harvard Law School. There has been enormous expansion and growth in the
business models of the organizations like Deliveroo and Uber but similarly these companies
were facing some issues of labor. As per the reports of the Forbes, there were a lot of controversy

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in which the companies named Deliveroo and Uber were involved. The company must be in
compliance with the standards of ethics otherwise the can face allegations. Uber has lower down
its reputation by involving themselves into unethical, immoral activities but similarly it seems
that it is not affecting the bottom line of the operation of uber. There has been accusations of
sexual harassment of the customers and employees that was received by uber. It has also been
suspected of obtaining illegally records of medical of the victims of rape so that they can put
down their claims. There has been several allegations that have been faced by the HR department
of the Uber of creating unsafe environment for the working women.
According to Lownsbrough (2018) the business model of Uber basically focusses on the
expansion and development of the organization that reflects the ambition of the company. The
economic business model of the organization do not have the possibility to allocate funds for the
improvement and safety of the customers and to adopt the CSR policy. Amazon and uber has the
same business policy. Both the organizations basically depend on the investments that are done
by the investors to supply for the growth and development of the companies in the market. In the
primary phase, Amazon achieved higher success in the retail market as they made huge
investments. After achieving this success, Amazon started to make huge profits. However,
amazon did not have to acquire establishment cost and shop maintenance as it is an online
business unlike any other shops who conducts business and it had a competitive advantage. The
retail market uses the economic scale to function in international and national markets.
The business of Uber has done an investment for $11.5 billion dollars that has helped Uber to
emerge and grow in the new market but the investment amount has been raised by the investors
and banks. Since the operation of this company, Uber has not been able to make profits
substantively. There has been a huge loss of amount three billion dollars in 2016 because of the

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cases that were charged on Uber and because of this loss Uber had to pay all the amount as debts
or equity. Therefore, it can be explained that the nonstop growing of debts is not helping them to
achieve their goals that has been set by them and it is also not allowing them to meet the ethical
standards.
There was an announcement held by Travis Kalanick, the CEO of Uber that there will be an
investigation to find those people who are responsible for the allegation of sexual harassment
that has been faced by the company. There were 20 people who were terminated after the
investigation as there indulged in some sexual conduct and some of them were seniors but the
identity of those people were not disclosed (Solon 2018). As per the management of Uber, it was
said that if the PR of the company will be improved then it will help the company to build up its
reputation. However, this decision did not help to come out of its controversies. Therefore, the
department of transport of London had decided to withdraw Uber’ license that will help it to
become non-operational in the London (The Conversation 2018).
The business of taxi has remained localized but they operate in different techniques. The main
costing price in this taxi industry are mainly the cost of drivers, fuels and the cars. However, for
evolving in this new market, the business model of Uber do not identify these costs and only
concentrates on the distribution of funds. The aim of the business of Uber to evolve in this
market is to subsidize the wages of the drivers and in the reduction of the fees of the passengers.
The main aim and requirement of Uber is to provide passengers with employment protection to
the drivers and safety to customers to function properly in a regular market. Therefore, if the
organization continuously faces the competition to local competitors, the organization will not be

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able to achieve trust and they have a little hope that they can repay the amount back to the
investors.
Another such company is Deliveroo that is also based on platform based peer production
system and it has also been involved in controversies for not meeting the standards of ethics. The
managers of Deliveroo have said that the courier suppliers must be treated independent suppliers
they are engaged in the work of delivering takeaways. The managers of this company have
suggested that these courier suppliers must be treated as contractors who are independent as they
do not carry any employment rights. These suppliers must be differentiated from the employers
and staff which make the team of the company. As suggested by Recruitment international.co.uk
(2018), the way of treatment of suppliers and drivers from Deliveroo and Uber have allowed the
organization from avoiding the obligations of paying the minimum wage to the drivers and the
suppliers. The business models of the company named Uber and Deliveroo treat their food
suppliers and drivers as contractors who are independent so as to save millions of dollars tin sick
leaves and pays of holidays. This decision that has been made by the managers of these
companies named Uber and Deliveroo will save the money being wasted.
The management team of Deliveroo was given a list of do’s and don’ts so that the workers who
have been employed by the company in the role of economy had claimed that they might take
legal action against the company. These courier suppliers that make takeaways and deliveries
have said that they want an explanation or clarification regarding the differentiation between the
independent contractors and the employees. These courier suppliers have demanded more of
employment rights that includes the rights to receive minimum wage, paid sick leave and paid
holiday leave. As per the reports of Leigh Day, a law firm, there are over two hundred workers
of Deliveroo that have claimed that these workers need recognition as employees because they

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wear uniforms, carry out shift trials and work during the working hours. They also want their
wages to increase as they are paid very less. It was said that the movement of suppliers are being
constantly monitored by the employers and these suppliers are being subjected to reviews of their
performance. However, the company does not consider them as their employees and they do not
have anything to say on their term of employment.
Such observations of businesses like Deliveroo and Uber are based on the peer
production system, which can be analyzed by certain submissions of moral theories.
The theory of Utilitarianism states that an act can be said to be ethical and right if it aims to
create the most possible benefit for maximum number of people (Piacquadio 2017). As said by
Alon and Lehrer (2017), the maximization of good consequences need to be done over the bad
consequences, by the companies and individual. As preached by Radek and Singer (2017), the
value of any action is calculated according to the summation of the consequences which are
undertaken by the individuals. For measuring whether or not the operations of the companies
such as Deliveroo or Uber are connecting with the moral principles of Utilitarianism, as it is very
important to identify the stakeholders involved it (Mulgan 2014). In these cases, customer and
the driver are said to be the stakeholders of Uber. Meanwhile, the couriers who take the
deliveries are said to be the stakeholder of Deliveroo. Though it is said that Uber has failed to
make a good impact on the drivers or the customers. The acts related to sexual harassments
defines that ethical values are not maintained by the company. Some major acts such as not
recognizing the driver as an employee or not giving him the pay or benefits are also said non
ethical as it creates no good for the drivers. So, the operations of Uber are declared to be
unethical according to the principles of Utilitarianism (Mill 2016).

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Ethics and Governance
Such things are similar in the case of Deliveroo as well, this company also does not consider
their couriers as employee so that they can avoid the payment or any other employment benefits.
Therefore, this too is stated to be unethical as there is no profits provided to the stake holders.
As per Russell (2016) the theory which only emphasizes on the duties of individuals is said to be
deontology theory, it judges an action on the ground of whether it is wrong or right. This theory
also does not consider the consequences of actions unlike the theory of consequentialism (Bowie
2017). Rather than the consequences, the moral status of the act is determined by the intention of
the agent who is performing (Paquette, Sommerfeldt, and Kent 2015). Therefore, after
investigating the operations of Uber and Deliveroo by the principles of Deontology, these
operations are declared fundamentally unethical. It is the basic responsibility to give employment
protection to the drivers itself, which needs to be followed by Uber. But, these business models
are unable to afford to assign the funds to fulfill the ethical values (Mallia 2015). In case of
Deliveroo, the company needs to take the responsibility of providing the benefits of employment
to the courier as they play a major role in the company’s success. Their task of delivering the
food is said to be the most important one. Therefore, it is stated that labelling them as
independent contractors just to avoid payments and employment benefits is unethical (Bowen
and Prescott 2015).
Virtue ethics is a theory which is applied to measure whether or not the operations happening in
the company are said to be ethical (Frede 2015). As preached by Chan (2016) this theory is a
normative story which highlights on the moral and virtue of a particular choice as conflicting to
the consequence and duties of the act. The vital aim of this theory is to support the moral value

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or virtue, which is similar to the consequensialists who are mainly focused by the consequences
of the action Annas (2015). As preached by Jayawickreme et al (2014), virtue can also be a
person’s inherent quality, which can be developed in a time period. Therefore, such operations
done by the companies like Deliveroo and Uber are required to be investigated by the point of
view of the Virtue Ethics, not identifying the couriers and drivers as employees just for the sake
of avoiding the payments and benefits is a prima facie unethical (Elliot 2016). It is also not
ethical to address the couriers as contractors because the need to wear uniform during working
hours and their movement is tracked as well (Van 2014).
Conclusion
The theory of Utilitarianism states that an act can be said to be ethical and right if it aims to
create the most possible benefit for maximum number of people. The maximization of good
consequences need to be done over the bad consequences, by the companies and individual. The
value of any action is calculated according to the summation of the consequences which are
undertaken by the individuals. For measuring whether or not the operations of the companies
such as Deliveroo or Uber are connecting with the moral principles of Utilitarianism, as it is very
important to identify the stakeholders involved it. In these cases, customer and the driver are said
to be the stakeholders of Uber. As per the given analyses above it is also clear that the actions of
Uber in the light of Utilitarianism are unethical. Further the virtue ethics is a theory which
highlights on the moral and virtue of a particular choice as conflicting to the consequence and
duties of the act. The vital aim of this theory is to support the moral value or virtue, which is
similar to the consequensialists who are mainly focused by the consequences of the action. As
per this theory also the actions of Uber are not seen as being ethical. Therefore, in the
conclusion it can be stated that the companies which are based on peer production system for

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example Uber and Deliveroo have a massive chance of growing and expanding in different
markets. Though, business models of these companies require to have enough money to assign
the funds in order to fulfill with ethical values. In such a case, these companies are getting
tangled in many controversies. In the case of Uber, it has been facing a hug issues with its
employee and customers regarding sexual harassment, many allegations of overpowering records
of sexual harassments have also been faced. The controversies faced by Deliveroo on the other
hand is basically about labelling their employees as independent contractors so that they could
avoid the payments and also the benefits of the employment can be stopped. After studying all
this data regarding such ethical theories, it is stated to be essentially unethical.

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