An Analysis of Uber's Ethical Issues and Business Practices

This report critically examines the ethical challenges faced by Uber, focusing on its business model and its impact on passengers and drivers. It identifies key issues such as a lack of regulations, driver-related concerns (including pay and safety), passenger safety incidents, privacy breaches, and unethical leadership practices. The report explores the risks Uber must overcome to sustain growth, including addressing surge pricing concerns, ensuring driver security, and fostering fair competition. It also analyzes the need for regulatory development to establish standards for consumer and driver protection, privacy guidelines, working hours, and compliance with competition laws. The analysis draws upon ethical theories like Utilitarianism and Deontology to evaluate Uber's actions, highlighting areas where the company has failed to act ethically and suggesting improvements.

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Comparative Business Ethics and Social Responsibility

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Executive Summary
The aim of this report is to evaluate the case study of Uber in order to identify the key
ethical challenges which the company is facing due to its business model. This report
evaluated that Uber has failed to act ethically since it did not protect the interest of its
passengers and drivers. The company has failed to implement privacy policies and
engage in ethical leadership practices. This report evaluated various issues which are
necessary to be addressed by the company to sustain its growth, such as protection of
competitors, passenger safety, surge pricing, fares and safety of drivers. Lastly, this report
evaluated a number of areas in which regulations should be developed to introduce
standards for Uber in order to make sure that it complies with legal and ethical principles
such as coverage of consumers and drivers, privacy guidelines, working hours and
competition laws.

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Table of Contents
Introduction............................................................................................................................3
Ethical Challenges Faced by Uber........................................................................................4
Risks which Uber has to Overcome.......................................................................................6
Development of Compliances................................................................................................8
Conclusion...........................................................................................................................10
References...........................................................................................................................11

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Introduction
In today’s highly competitive business world, organisations are facing fierce competition,
and they have to implement adequate policies to make sure that they stay relevant in the
ever-changing market environment. There are various internal as well as external
challenges which are faced by companies to make sure that they conduct their operations
in an ethical manner (Lawrence and Weber, 2014). It becomes important for companies
that they must comply with ethical guidelines while taking business decisions to make sure
that they address their ethical challenges in order to sustain their future growth in the
market. A good example is Uber Technologies Incorporation (Uber) which is a
multinational transportation network company that offers its customers peer-to-peer
ridesharing, food delivery, bicycle-sharing system and ride service hailing facilities to its
customers (Natchkebia, 2019).
The company was founded in 2009, and it has since expanded its operations in 173
countries with over 110 million worldwide users (Natchkebia, 2019). The company has 69
per cent of the market share in the passenger transportation market of the United States.
This report will evaluate the case study “Uber Hits a Bump in the Road” in order to identify
the key ethical challenges faced by the company while using its app-based peer-to-sharing
technology. This report will also evaluate the key risks which the company will have to
overcome in order to sustain its growth in the market. This report will also analyse whether
there is a requirement of the development of regulations to make sure that standards are
maintained to protect competitors and consumers.

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Ethical Challenges Faced by Uber
Due to its disruptive business model, Uber become very successful in a short period of
time. The popularity of smartphones and the internet resulted in promoting the use of app-
based ride sharing application, which makes Uber the market leader. People rely on using
the mobile application to book tickets, hotels, ordering food and many others and it has
become easier for individuals to rely on these services while doing their day-to-day tasks
(Traum, 2015). The popularity of services such as Airbnb shows how people can earn
money through different platforms and companies which connect people with businesses
become high successful (Traum, 2015). The number of start-ups increased substantially in
the past few decades and Uber has become one of the most successful start-ups of all
times. Uber’s IPO (initial public offering) valued the company at $82 billion, and it is the
most anticipated IPO since Facebook (Venture Beat, 2019). Although the company has
gained popularity in the market; however, it faces a number of ethical challenges due to its
distinct business structure. Following are the key ethical challenges which are faced by
Uber when it manages its operations through its application-based peer-to-peer sharing
technology.
Lack of Regulations
Since the technologies that support the business structure of Uber have become popular
recently, there is a lack of government and legal regulations that govern the actions of the
company. The key ethical concern is that the company seems to make its own rules and
regulations rather than consulting with the government regarding the legality or morality of
its actions (Traum, 2015). Due to the lack of regulations, it becomes easier for the
company to engage in illegal and immoral practices since no obligations are imposed on
its executives. For example, the company puts surge charging on its customers based on
its demand without considering their interest, and it keeps the major of surcharge with itself
rather than distributing it with customers.
Drivers related issues
Due to its business model, Uber has taken the business from professional drivers who are
experienced and talented in this field. This has resulted in increasing the rate of
unemployment in the field of professional drivers, and they are obligated to work at
relatively low rates as normal drivers despite having expertise, knowledge and talent in this
area (Friske, 2017). The drivers of Uber did not pay taxes like other professional drivers

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due to lack of relevant regulations, which also raises ethical concerns. Furthermore, the
company did not provide basis employment facilities to its drivers in order to save its costs
such as insurance, training, maintenance of cars and others. This business structure
makes it easier for the company to generate higher profits while exploiting the rights of
drivers. The company has also been accused of unethical requirement and unethical
behaviour while dealing with its employees. The company encouraged its employees to
book ride for its competitor services and cancelling them after confirmation (Friske, 2017).
These factors resulted in increasing costs of rivals of Uber such as Lyft which further
eliminated competition for the company.
Passenger Safety
Many of the drivers working for Uber have been convicted with major issues such as
sexual assault and sexual harassment of passengers. For example, a passenger in
Chicago was assaulted by her Uber driver, and in 2018, it was reported that 103 drivers of
Uber were accused by passengers for sexual assault or abuse (O’Brien et al., 2018). The
reason for these incidents is that the company did not properly conduct a background
check of its drivers before hiring them for the job. There is no specific criterion that is
adopted by the company to make sure that it did not hire any drivers who are likely to
engage in unethical or illegal practices (O’Brien et al., 2018). Although the number of these
incidents are growing; however, Uber has failed to take constructive actions to address
these issues. As per the Utilitarianism ethical theory, the actions of Uber are considered as
unethical. This theory judges the morality of business decisions based on their
consequences to determine whether they achieve greater happiness for a large number of
people or not (Kagan, 2018). In the case of Uber, this principle is not fulfilled based on
which the actions of Uber are unethical.
Privacy
Uber has been accused many times of failing to implement corrective actions to make sure
that the private data of its users are protected from cyber criminals; however, the
management of the company has failed to implement corrective actions to address this
issue. The mobile application of Uber allows the company to track the location of its users,
which resulted in compromising their privacy (Hern, 2018). A data breach in 2016 resulted
in exposing names, email addresses and phone numbers of more than 35 million Uber
users. In 2018, a fine of £385,000 was imposed on the company since it failed to tell its 35
million users and 3.7 million drivers that their data has been hacked in 2016 (Hern, 2018).

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In this regarding, the principle of Deontology ethical theory can be applied, which provides
that ethical decisions are made when parties comply with their duties rather than based on
their consequences (Dion, 2012). Uber breached its duty by failing to protect the data of its
users and notifying them that their data has been breached which shows that the actions
taken by the company are unethical.
Unethical Leadership
The former chief executive officer (CEO) of the company, Travis Kalanick admitted that he
tried to torpedo the funding efforts made by its biggest rival Lyft in order to eliminate
competition of Uber (Kleinman, 2017). The CEO also referred the company as “Boob-er”
by providing that it assisted him in meeting girls (Kleinman, 2017). The leadership of Uber
has consistently failed to put the interest of customers and drivers above its profit
maximisation goals. The unethical leadership of Uber resulted in increasing ethical
challenges for the company rather than resolving them in a timely framework.
Risks which Uber has to Overcome
There are a number of ethical challenges which are faced by Uber that are necessary to
be addressed by the company to make sure that it sustains its growth in the market.
Following are the key areas which Uber should focus on in order to make sure that it
addresses the key ethical concerns that are likely to adversely affect its operations in the
future.
 Security of Drivers
Uber should change its human capital management policies in order to make sure that the
security of its drivers is maintained. During the recruitment process, the company should
conduct a thorough background check of its drivers to make sure that they did not assault
or harass the passengers (Schneider, 2017). The company should also maintain the safety
of drivers from abuse, misbehave, discrimination and assault. The company should ask
the drivers to install security cameras in their vehicles to make sure that they record the
unethical behaviour of drivers or customers. Training should be given to drivers to make
sure that they act in a professional manner while dealing with customers.
The company should avoid overflow of its drivers, and it should focus on maintaining an
adequate number of workforce that is suitable enough to meet the demand of customers.
The company should also pay high salaries, insurance, maintenance and other charges to

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its drivers to make sure that they remain in the company for a longer period of time and
their rights are not violated by the organisation (Friske, 2017). The management should
increase interaction with drivers to make sure that they report the key challenges faced by
them, which will enable the company to engage in an ethical manner.
 Surge pricing and Fares
The company should be careful while imposing “Surge pricing” on its customers to make
sure that it did not take unfair advantage of them. The company should not impose a high
rate of surge prices on its rides, and it should only use surge pricing on specific occasions.
The company should focus on building strong relationship with its customers, which cannot
be established until it continued to charge them at high rates (Cramer and Krueger, 2016).
Furthermore, the company should make sure that the surge prices are distributed between
the company and the drivers in a balance. The company should also be careful with its
fares since one of the biggest selling points of the company is its low fare. However, other
competitors of Uber such as Lyft has also improved its pricing strategy in order to reduce
its prices; however, Uber should also make changes in its pricing strategy to make sure
that large fares are not charged from customers (Cramer and Krueger, 2016). In case
Uber will not be able to offer competitive prices to its customers, it will become difficult for
the company to retain its customers for a long period of time.
 Competitors
The company should not implement policies that eliminate its competitors and their
business from the industry. The company should not ask its employees to call Lyft cars in
order to jam up their service. The company should focus on acting in an ethical manner
while dealing with its competitors and it should try to make its services better rather than
creating obstacles for them to eliminate its competition (Kleinman, 2017).
 Passenger Safety
Uber should take passenger safety very seriously, and it should take corrective actions to
protect customers from sexual harassment or assaults. The company should conduct
thorough background checks of its employees, and it should also monitor their activities
through surveillance cameras installed in their cars to make sure that they are not able to
engage in unethical practices (O’Brien et al., 2018). The company should also offer an
emergency option for its customers directly in its application which allows them to call for

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help and sent a message containing their location to make sure that they are protected
when they use its services.
 Privacy Policies
The company should make sure that adequate policies are implemented to protect the
privacy of its users. It should focus on ensuring that the private data of its users are
protected from cyber-attacks, and users and drivers are notified on time in case it receives
information regarding a cyber-attack (Hern, 2018). Moreover, the company should not
collect and storing private data of its users in the first place to respect their privacy.
Development of Compliances
The business model of Uber is new, which is not offered by anyone else before the
company. The company is facing many lawsuits while operating in different countries due
to its current standards and the way it conducts its operations. The business model of
Uber has created challenges in relating to the application of competition and consumer
protection laws in many countries, which creates challenges for governments (Rauch and
Schleicher, 2015). There are no effective regulations in order to make sure that the actions
of Uber and its members are governed in an adequate manner. Therefore, it is important
that the government must take steps in order to develop regulations and laws which are
applied on the operations of Uber and introduced specific standards for the company
which are necessary to be followed (Rauch and Schleicher, 2015). The obligation on the
company regarding the actions of its drivers and the safety of its customers should be
increased to make sure that they can be held accountable for their actions. Following are
specific areas in which regulations should be implemented to introduce standards for Uber.
 The company should provide accident coverage to its customers since currently
they are not protected in case Uber car is involved in an accident. The company
should make sure that users that hire its services are covered in case they involved
in an accident (Geradin, 2015).
 Uber should also provide protection for personal safety in its cars since customers
that hire the services of Uber face risks since they enter into the car with a total
stranger. Therefore, it should be the duty of Uber to make sure that it conducts a
thorough background check of its drivers and it should also monitor their actions to
make sure that they did not violate the interest of customers (Rinde, 2019). The

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company should be liable for the protection of its customers’ safety, and it should be
responsible for paying compensation in case they face any issues.
 Uber should provide insurance coverage for its drivers since they work for the
company. Uber should recognise their basic employment rights, such as proving
them coverage in case they are involved in an accident. The company should also
treat them fairly and avoid discrimination, or else legal penalties should be imposed
on its members (Motala, 2016).
 The company should be obligated to maintain the standard for setting working
hours for its drivers to make sure that they receive adequate rest, which is crucial
for the safety of customers (Korosec, 2018).
 New data safety laws should be introduced for the company to make sure that it
maintains adequate standards to protect the privacy of its users and drivers. These
laws should also prohibit the company from collecting private data of its users
without their permission to ensure that their privacy is maintained (Motala, 2016).
 Competition laws should be imposed on the operations of Uber to make sure that
the company did not engage in illegal or immoral practices to eliminate its
competition. The government should impose stricter civil penalties on those officers
that encourage employees to hinder the operations of competitors of the company.
Competitors of Uber should be protected to make sure that the company is not able
to misuse its position in the market to gain an unfair advantage (Geradin, 2015).
 A new tax structure should be introduced for Uber to make sure that adequate tax
obligations can be imposed on the company. Currently, the drivers of Uber did not
pay taxes; however, these policies should be changed by the introduction of new
taxation laws which will govern the operations of Uber (Zaveri and Bosa, 2018).

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Conclusion
In conclusion, there are a number of ethical challenges faced by Uber due to its business
model that affects the sustaining of the company in the market. The key ethical challenges
faced by the company are relating to lack of regulations, protection of rights of drivers,
passengers safety, the privacy of users and drivers and unethical leadership. There are
various risks which must be overcome by Uber in order to make sure that it successfully
retains its competitive advantage in the market such as security of drivers, surge pricing
and fare policies, competitors, passenger safety and privacy policies. There are various
areas in which there is a need for the development of compliance with standards for Uber
in order to protect competitors and consumers such as the introduction of safety and
insurance coverage for drivers and consumers, fixing working hours, protection of
competitors, taxation policies, accident coverage and others. These policies will assist
Uber in becoming an ethical company which is crucial for the organisation to retain its
competitive advantage and sustain its growth in the future.

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