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I. Introduction
“Tap a button and get a ride" inspired by the difficulty of getting a taxi in a snowy night
in Paris unexpectedly became one of the most innovative business startup ideas in 2009
following by the launch of Uber and the beginning of “sharing economy” era 1 . Based in San
Francisco, founded by Travis Kalanick and Garrett Camp, Uber Technologies Inc. was first
operated in San Francisco, California and quickly expanded to 632 other cities all over the world
due to its unique business model2.
Uber is the mobile-based business acting as a “bridge” between car owners and
customers; they require both sides to install and communicate via the Uber application by
booking and locating themselves by the Map system that can direct the riders to the customers’
place with upfront and dynamic pricing strategy that differs depending on time and locations.
Shared economy created by Uber
Even though invented in 2000, the term “shared economy” was rarely seen in practice
until Uber Technologies Inc launched its app in 2009; “shared economy” allows businesses to
implement transactions based on asset-renting models, in which assets may refer to houses, cars,
and offices3. Since the global economy recession during 2008-2009, “shared economy” has
developed rapidly as renting is considered a way of saving money and sharing with strangers,
receiving money back can help owners establish their own businesses and self-employed rather
than working for any companies with restriction of freedom, benefits, and risks of
unemployment4. As Uber is one of the pioneers in the “shared economy”, people also call this
kind of economy “uberisation” or “uberification”.
II. Customer relations
a. The ethics of sharing
Since its launch, Uber has faced many scandals related to sexual harassment, violence,
and personal insult among drivers and customers, and among customers sharing the same ride. In
London, in 2017, several customers were sexually attacked by Uber’s drivers accusing them of
1
Uber.com. (2017). The Uber story.
2
Uber.com. (2017). The Uber story
3
The sharing economy. (2015). Global Investor , Expert know-how for Credit Suisse investment clients INVESTMENT
STRATEGY & RESEARCH, [online] 2(15), pp.6-12.
4
The sharing economy. (2015). Global Investor , Expert know-how for Credit Suisse investment clients INVESTMENT
STRATEGY & RESEARCH, [online] 2(15), pp.6-12
touching their bodies without permissions, none of which was reported to the police by the firm5
. In 2013, a Uber taxi driver crashed and killed a 6 year old girl when she was with her family
walking on the street in San Francisco 6 . More noticeably, in 2014, an Indian woman was raped
by her Uber driver, which had committed four other rapes raising anger and disappointment of
customers towards the company as it failed to investigate drivers' legal background and only
took measurements after the case was discovered by the journalists 7 .
b. Privacy violation
Uber is using the God Map system that can track and see the locations of current
customers and drivers. It should have not been a problem until in 2014 in Chicago and New York
City, the company uses their whereabout customers and drivers’ current locations without asking
for permissions as a demonstration of the God Map system’s capability to their guests in the
launch parties8). One year later, Uber continued facing accusations from a journalist and a
customer of violating their privacy; as reported, the journalist was chased by a Uber top manager
by accessing her travel diaries on the app; and Entrepreneur Peter Sims received a message
informing that his location was discovered by tracking the app 9 . These cases have raised
concerns about safety of the customers and doubts about the ethics code the company is
following. In the updated version of the Uber application in 2016, the post-ride location tracking
tool was added to prevent drivers from ending their rides earlier than expected or overcharging
the customers; however, the company was on fire due to several protests against its new tool
regarding personal information protection, which then forced the company to create another
button to allow customers to disable the tracking tool whenever they want 10
.
Despite public criticism and warnings from authorities such as the U.S. Federal Trade
Commission prohibition of Uber’s acts of collecting customers’ personal data, there has been
5
Harley, N. (2017). Uber sex scandal as police accuse taxi firm of failing to report sex attacks committed by drivers. [online]
The Telegraph.
6
CNET. (2017). Uber settles lawsuit over fatal SF crash that killed girl. [online] Available at:
https://www.cnet.com/news/uber-settles-lawsuit-over-fatal-sf-crash-that-killed-girl/ [Accessed 3 Oct. 2017].
7
Wong, J. (2017). Uber executive fired amid reports he obtained rape victim's medical records. [online] the Guardian.
8
Marcus, L. P. (2017). The underside of uber. Project Syndicate
9
AB 886 (chau) protects uber passenger privacy. (2015). U.S.Newswire
10
Wamsley, L. (2017). Uber ends its controversial post-ride tracking of users' location. Washington: NPR
uncertain that Uber Inc. will not let these incidents happen again due to the company’s
ambiguous solutions to its scandals11 .
III. Working environment
Uber is described as a toxic culture for employees as the company is built on a
“win-at-all-costs” culture that gaining profits is more important than following regulations and
behaving ethically 12
. In 2017, Susan Fowler, a former Uber engineer, claimed that she was
sexually harassed, discriminated, and always threaten to be fired by the top managers of the
company, which then was rapidly responded by Kalanick- the Uber’s CEO that he would order
an investigation and take a serious measurement right after; however, Kalanick was also under
controversy of women discrimination by calling “woman on demand" “Boob-er"13 . This scandal
led to a large-scale campaign on Twitter with hashtag #deleteUber 14
. At the same time,
Kalanick’s leadership style was also criticised as “scrappy entrepreneur” due to his unreasonable
rules in the company including the fine of 200$ for being late15. Under the pressure of the
chairman board, Kalanick resigned from his CEO position in June 201716.
Another concern is drivers’ income rate. In 2015, drivers in London protested due to the
increase in Uber's commission rate from 20% to 25% and the drop in payment rate by 15%17 . In
other places such as Czech Republic, Uber also pays lower than the average of taxi drivers
causing them to work more than acceptable number of hours and risk their own safety. Since
Uber is a new business model, it is difficult to address the drivers “partners" or “employees",
which leaves their benefits, rights, or limits unclear to be protected by any laws or regulations.
IV. Regulation problems
Operating in about 80 countries in the world, Uber is struggling with following local
rules and regulations. In many countries, Uber drivers are running without having permissions
from local authorities since there has been no set of rules for such a new kind of business like
Uber; for example, in Mexico, taxi companies should pay taxes and require their drivers to test
11
Brady, D. (2017). Federal trade commission smacks uber for deceiving users about privacy. The New York Observer
12
Byrne, L. 2017, 'Building a 'win at all costs' culture sets the tone of your startup'
13
Levin, S. (2017). Uber launches 'urgent investigation' into sexual harassment claims. [online] the Guardian.
14
Levin, S. (2017). Uber launches 'urgent investigation' into sexual harassment claims. [online] the Guardian
15
BBC News. (2017). Uber: The scandals that drove Kalanick out.
16
BBC News. (2017). Uber: The scandals that drove Kalanick out.
17
New uber drivers pay down by pounds 1 per hour. (2015). M2 Presswire
drugs and alcohols in blood while Uber does not have to since they argue that the Uber drivers
are the company's independent partners and it is not obligatory for Uber to force their partners to
take the test18 . In Eugene, a city in the USA, Uber's activities are prohibited due to the difference
between the firm's standard background check standards and insurance coverage, and the local
one, in which the firm’s ones are lower19 . Taking advantages of the technology company
background, Uber is avoiding the local regulations to protect citizens’ safety and wellness
claiming that it is excluded from those as it is not a taxi company.
V. Local economy influence
As a direct competitor of the local taxi firms, Uber is considered to affect negatively on
local economy as it quickly eliminates traditional taxi business leading to the close of many local
taxi firms and other related companies, and unemployment as the following consequences. In
China, many anti-Uber protests took place in front of the government’s head offices 20
. However,
in Sydney, the Uber business seems to have little impact on local businesses according to several
taxi drivers21.
VI. Conclusion
Since 2009, Uber has changed the taxi industry from traditional hailing cabs to the
sharing economy that allows car owners and customers to communicate and make the most
appropriate deal via the Uber mobile application . They have contributed to lower the
unemployment rate and opened a more convenient and reliable way for customers to use taxi
services. However, along with the advantages Uber has brought to the world, there have been
many incidents proving that the company’s ethic codes have not reached the acceptable
standards that cause harms to the benefits of its stakeholders including harassment, privacy
violation to customers, discrimination to employees, and destructions of local economy. Besides,
the company has no commitment to the environment protection and social responsibility. Even
though Uber has taken some serious measurements on the scandals mentioned above such as the
resignation of Kalanick- the CEO, if the company continues to show its aggressive image that
18
Quintana, C. (2015). PRC: Uber skirting rules in new mexico. The Santa Fe New Mexican
19
Aleshire, I. (2015). City's regulations drive uber out of town - for now. The Register - Guard
20
Chen, G. (2015). When 60,000 taxis are not enough for shanghai. South China Morning Post
21
Taxi drivers say uber has had little impact on business in newcastle; newcastle taxi drivers say the digital ride-sharing app uber
has had little impact on their business, despite initial concerns. (2015,). ABC Regional News
ignores customers’ complaints and the government’s regulations, its business is not going to last
long facing boycott and prohibitions in many countries including Denmark, Bulgaria, Italy,
Canada, China and Taiwan 22
.
22
Rhodes, A. (2017). These are all the places in the world that have banned Uber. [online] The Independent
References
1. AB 886 (chau) protects uber passenger privacy. (2015, Apr 15). U.S.Newswire
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1673164363?accountid=14689
2. Aleshire, I. (2015, Apr 04). City's regulations drive uber out of town - for now. The
Register - Guard
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1670361789?accountid=14689
3. BBC News. (2017). Uber: The scandals that drove Kalanick out. [online]
Available at: http://www.bbc.com/news/technology-40352868 [Accessed 3 Oct.
2017].
4. Brady, D. (2017, Aug 15). Federal trade commission smacks uber for deceiving users
about privacy. The New York Observer
Retrieved
fromhttps://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/d
ocview/1929088106?accountid=14689
5. Byrne, L. 2017, 'Building a 'win at all costs' culture sets the tone of your startup',
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1901437317?accountid=14689)
6. Chen, G. (2015). When 60,000 taxis are not enough for shanghai. South China Morning
Post
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1699091259?accountid=14689
7. CNET. (2017). Uber settles lawsuit over fatal SF crash that killed girl. [online]
Available at:
https://www.cnet.com/news/uber-settles-lawsuit-over-fatal-sf-crash-that-killed-gir
l/ [Accessed 3 Oct. 2017].
8. Harley, N. (2017). Uber sex scandal as police accuse taxi firm of failing to report sex
attacks committed by drivers. [online] The Telegraph
Available at:
http://www.telegraph.co.uk/news/2017/08/13/uber-sex-scandal-police-accuse-taxi
-firm-failing-report-sex/ [Accessed 3 Oct. 2017].
9. Levin, S. (2017). Uber launches 'urgent investigation' into sexual harassment claims.
[online] the Guardian.
Available at:
https://www.theguardian.com/technology/2017/feb/20/uber-urgent-investigation-s
exual-harassment-claims-susan-fowler [Accessed 3 Oct. 2017].
10. Marcus, L. P. (2017). The underside of uber. Project Syndicate
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1912740739?accountid=14689
11. New uber drivers pay down by pounds 1 per hour. (2015, Nov 24). M2 Presswire
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1735751891?accountid=14689
12. Quintana, C. (2015, Dec 07). PRC: Uber skirting rules in new mexico. The Santa Fe New
Mexican
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1747281920?accountid=14689
13. Rhodes, A. (2017). These are all the places in the world that have banned Uber. [online]
The Independent.
Available at:
http://www.independent.co.uk/travel/news-and-advice/uber-ban-countries-where-
world-taxi-app-europe-taxi-us-states-china-asia-legal-a7707436.html [Accessed 3
Oct. 2017].
14. Taxi drivers say uber has had little impact on business in newcastle; newcastle taxi
drivers say the digital ride-sharing app uber has had little impact on their business,
despite initial concerns. (2015, Apr 08). ABC Regional News
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1670363216?accountid=14689
15. The sharing economy. (2015). Global Investor , Expert know-how for Credit Suisse
investment clients INVESTMENT STRATEGY & RESEARCH, [online] 2(15), pp.6-12.
Available at:
http://www.oxfordmartin.ox.ac.uk/downloads/GI_215_e_GesamtPDF_01_high.p
df [Accessed 3 Oct. 2017].
16. Uber.com. (2017). The Uber story. [online]
Available at: https://www.uber.com/en-CZ/our-story/ [Accessed 3 Oct. 2017].
17. Wamsley, L. (2017). Uber ends its controversial post-ride tracking of users' location.
Washington: NPR.
Retrieved from
https://unmtaos.idm.oclc.org/login?URL=?url=https://search.proquest.com/docvie
w/1933369146?accountid=14689
18. Wong, J. (2017). Uber executive fired amid reports he obtained rape victim's medical
records. [online] the Guardian.
Available at:
https://www.theguardian.com/technology/2017/jun/07/uber-executive-fired-eric-a
lexander-rape-case-india [Accessed 3 Oct. 2017].