Moral Dilemma
The year 2017 was marked with numerous scandals that large corporations in the US would wish to forget. Among the major headline makers was Uber, the Silicon Valley giant that was subjected to a variety of incidents that raised questions on its ability to sustain its position as the national leader in peer-to-peer ridesharing and taxi cab operations. The organization has been subjected to moral dilemmas on sexual harassment allegations, poor leadership of its CEO, criminal investigations for illegal operations, and cybersecurity concerns that endangered the data of some 57 million users (Solon, 2018). The above-mentioned issues are just a tip of the moral issues with Uber’s business practices. It is evident that failure to rectify the practices of the company and restore a positive image of its operations will continue to hurt the performance of the company (Lewin, 2018). Towards the close of fiscal year 2017 Uber had a market share of 74% which had dropped significantly from 84% the previous year. The primary concern in this case is, “What obligations do we have to our stakeholders following the recent negative publicity associated with our operations as a ridesharing business?”
Triggering Event
Since its creation in 2009, Uber has faced significant criticism for its operation and direct competition to regular taxi cabs. The primary concern has been the fact that its initial presentation was intended to bring about cheaper transportation for its uses. However, through its use of dynamic pricing techniques, the cab fares have been seen to soar during high demand rates. The founder and then-CEO Travis Kalanick was always quick to defend its operations as he provided response to the criticism that the ridesharing company faced. The year 2017 started off on a bad note when 200,000 customers deleted their accounts in protest to the company’s association with president elect Donald Trump. This was a major loss considering that the customers were lost specifically within one weekend.
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The year got worse in February when a former employee of Uber alleged to be a victim of sexual harassment while working with the company. The former engineer, Susan Fowler, identified her experience in the firm was one of gender bias whereby despite her effort to alert the human resource department on the issue, there was little done. The manager who had propositioned her for sex was not punished and her complaints were dismissed as he was a high performer. Fowler was then threatened by her manager who promised to fire her for reporting things to the HR department. Kalanick made an immediate response identifying that the issue would be dealt with as former attorney general Eric Holder was hired to lead an independent investigation. By this time, journalists were swarming and the New York Times published a report identifying that Fowler’s case was not isolated as their multiple incidences during a company retreat that led to the dismissal of a manager who groped multiple women.
Events Leading up to the Triggering Event
The allegations raised by Susan Fowler highlighted the negative practices in its operations not only to its employees but also various external stakeholders. The firm was seen to employ negative business practices that would increase its earnings. In 2012, Uber alerted its customers that due to increased demand on New Year’s Eve, its prices would increase (Reisinger, 2017). The incident infuriated many when they had to pay three to six times the normal amount for a ride. A similar incident occurred later in the year when ride prices doubled during Hurricane Sandy. In 2013, Uber through its CEO refused to accept responsibility when a Washington resident alleged that a driver for violent conduct when he grabbed her by the throat. Kalanick accused the media was making up negative news about the company. In 2014, Uber employees were recognized to be involved in competitive sabotage practices as they posed as pedestrians when creating Gett accounts and cancelling their rides. There were more incidences of Uber trying to undermine the competition from Gett and Lyft. The incident worsened reputation of the firm and the CEO had little with repairing the image as he was recorded referring to the desirability of the ridesharing application as a “Boob-er” and further indicating that he would prefer clubbing than working while was in Miami. The comment was seen as a major red flag in the culture of the company as it indicated the treatment of women in the company. The callous attitude of the CEO towards women may have influenced individuals in the company to develop the “hot chick” drivers promotion that debuted in France. Further, its operations were banned in Delhi after rape accusations. All the above incidences occurred in 2014, leading up to a streak of negative publicity highlighting poor management practices.
Perspective along with Social, Economic, Cultural, Moral, Safety, and Legal Significance
The discussion on the unprecedented moral dilemma of Uber takes the perspective of current CEO Dara Khosrowshahi who took over the reigns after investors demanded the resignation of Kalanick. The above-mentioned issue has significant social, economic, cultural, moral, safety, and legal significance as will be presented below.
Social: The issue of sexual harassment and gender bias in the company portrays a negative image of the firm and its demeaning perspective of women.
Economic: Sexual harassment has an insidious economic impact that results in loss of investors, declining market share, and customers who seek alternative service providers.
Cultural: The moral issue has significant cultural effect in the company that creates a belief among male workers that they can harass their female peers and get away without punishment. The belief will create significant cases of conflict at the workplace.
Moral: The failure of the organization to reprimand high performing personnel when they act contrary to appropriate workplace requirements shows the preferential treatment taking place. The poor moral standards are likely to trickle down to other practices as is the case for Uber.
Safety: Sexual harassment in the work environment makes breaches security of the victims and it will deter talented personnel from seeking employment in the company.
Legal: The law requires that businesses and employers provide its workers with an environment that is conducive for all genders and makes them feel safe. If this is not achieved, the organization and high-ranking officials are likely to face legal consequences that may involve jail time and hefty fines.
Stakeholder Identification and Prioritization
| Stakeholders | Stakeholder Group | Description | How they are affected | Perspective | Impact on Company Decisions |
| 1. Susan Fowler | Employee | Engineer | Victim of sexual harassment and threatened to be fired | Company did not create suitable working conditions | Take action against Fowler’s manager and provide financial settlement for the unfair treatment experienced. |
| 2. Freada and Mitch Kapor | Investor | Application developers who have long been in the technology industry. | They stand to lose their financial investment in the company due to poor cultural practices. | They are frustrated for the negative image that the company has created. | Assure the Kapors that the firm is taking significant action to repair the image. |
| 3. Google | Investor | The self-driving-car group Waymo. | Loss of intellectual property. | The company accuses Uber of using stolen technology to advance autonomous car development. | Conduct an investigation and gather appropriate findings on the extent the organization has gone in completing technology on self-driving cars. |
| 4. Travis Kalanick | Management | Former CEO and Co-founder. | Involved in numerous criminal investigations and identified to lack respect for women. | The former CEO believes his actions were warranted and did not hurt the company much, but in hindsight regrets making particular comments and portraying particular behavior. | Ensure that the former CEO apologizes to employees, customers, and shareholders on the tarnished image of the firm. |
| 5. Amit Singhal | Management | Senior Vice President of engineering | Allegations of sexual harassment at his former workplace in Google. | Resigned immediately after allegations were raised but continues to deny them. | Continued investigations should be done to determine the ability of the firm to conduct background checks on employees. |
| 6. Uber Drivers | Contractors | Uber driver who drove Kalanick on Super Bowl Sunday and engaged in heated argument over lowered fares. | Then CEO showed his disregard and lack of care for the drivers who help increase their revenues. | The driver was seeking information why the company was decreasing fares and wanted to express himself on the effect it has on him. | The organization will continue to develop significant technology that will roll out fares that are not too high for customers and not too low for the drivers. |
| 7. Lyft | Competitor | Ridesharing and taxi cab network. | Seeking to take hold of customers who deleted their accounts on Uber. | Firm is trying to raise funds to compete against Uber. | The firm may experience a difficult time if Uber is able to rectify its issues in time. |
| 8. Uber users | Customers | Individuals who use the application to get rides from one place to another. | The continued fluctuation of prices and the negative publicity of the company has become frustrating. | The customers do not feel that their needs have been met. | The organization should conduct extensive research to identify ways they can improve their services to better the outcome for their customers. |
| 9. Journalists | Industry Observers | New York Times reporters among others. | SVP of business, Emil Michael suggests that opposition research is necessary. | Emil states that the comments did not represent the view of Uber. | The company should focus more on adhering to rules and regulations in the areas where they operate. |
| 10. Gett | Competitors | Rival ridesharing network company. | The firm’s performance was undermined by Uber employees. | Fake accounts are used to schedule and the cancelling Gett rides. | The firm will incorporate appropriate fair practice measures in the quest to maintain top spot in the delivery of its services. |
| 11. DMV | Regulators | California’s Department of Motor Vehicles | Uber changes mind and seeks permit for self-driving cars in California to revert on its previous conflict with the regulators. | The clash was part of a negative publicity for Uber. | Uber will seek to maintain high adherence with the set regulations of the DMV. |
| 12. Areas of operation | Communities | New Delhi customers | Uber driver was involved in a case of rape. | The community members feel the organization is responsible for the actions of the driver. | The organization will develop greater technology to conduct background checks for drivers. |
| 13. Female drivers. | Contractors | Female drivers in Lyon, France | They feel the company uses them as tools to increase their revenue while putting them in danger of malicious passengers. | The debuted promotion to pair passengers with “hot chick” drivers was sexist and inappropriate. | The organization will develop a sector that helps ensure fair representation of all genders. |
| 14. Carnegie Mellon University | Competitor | Members of CMU’s National Robotics Engineering Center (NREC) | Uber poached an entire team from CMU to advance its self-driving car project. | The institution felt it was unfair to take up an entire team of those working on vehicle autonomy from developers, specialists in commercialization, those that find grants, and those involved in developing IP. | The firm will seek to establish a a research and development department to prevent practices that could result in legal issues. |
| 15. Uber Drivers | Contractors | Drivers in New York sued the company privacy practices. | Uber tracked Buzzfeed reporter Johana Bhuiyan without her permission. | The organization incorporated software that infringes the privacy rights of drivers. | The firm vowed to remove all personal identifiable information of riders from their systems. |
| 16. Uber Users | Customers | Customers concerned by the misleading safety ads. | A class action suit against the company for printing misleading information. | Unlike other transportation services the firm does not fingerprint its drivers. | The firm should develop effective measures to improve safety standards for its consumers. |
| 17. Federal government | Regulators | Use of applications to evade authorities. | Greyball was used in areas where city regulators were blocking the service. | Use was evident in Paris, Boston, and Las Vegas. | Uber will continue to seek permission of authorities to operate in their respective areas of jurisdiction. |
| 18. Uber drivers and customers | Contractors and clients | Drivers in Singapore | Uber rented cars at risk of catching fire. | Uber managers were aware of the defect in Honda’s Vezel SUV but still rented the car to drivers without fixing the defect. | The company will rectify evaluation measures to prevent the use of cars that pose a threat to its or consumers. |
| 19. Apple | Partners | Platform where Uber app is offered to clients | Apple threatened to remove Uber from its store. | They felt the organization was violating terms and conditions by monitoring specific phones. | The organization will seek to work well with partners across numerous avenues. |
| 20. Uber Drivers | Contractors | Drivers in New York | The company will have to pay drivers for accounting mistake. | The organization shortchanged drivers in New York for years as it took more than its share of fares. | The organization will rectify its system to prevent shortchanging its valued drivers. |
References
Lewin, S. (2018). Uber to allow sexual assault and harassment victims to sue company. The Guardian . Retrieved from https://www.theguardian.com/technology/2018/may/15/uber-sexual-assault-harassment-ride-hailing-arbitration
Reisinger, D. (2018). Uber Makes Major Shift in Handling Sexual Harassment Claims. Fortune Magazine. Retrieved from http://fortune.com/2018/05/15/uber-sexual-harassment-arbitration/
Solon, O. (2018). Uber fires more than 20 employees after sexual harassment investigation. The Guardian . Retrieved from https://www.theguardian.com/technology/2017/jun/06/uber-fires-employees-sexual-harassment-investigation
