Uber and Consumer Protection: What You Need to Know

Background 

Uber is an organization that is synonymous with taxi services. The company, which was founded, by Travis Kalanick and Garrett Camp has been in operation for nine years. Primarily, the taxi services are acquired through a mobile app that users can download and install in their smartphones ( Cramer & Krueger, 2016 ). With the services of Uber starting in major metropolitan areas of the US, over the years, Uber has grown exponentially to operate in a global scale with studies showing that approximately 800 urban areas are covered ( Feeney, 2015 ). The company has developed its operations to include different portfolios. For example, Uber has launched different services to suit the needs of the clients. The growth of Uber has revolutionized the transport industry with users receiving convenient means of transport at the touch of a button ( Cramer & Krueger, 2016 ). As an organization, Uber is tasked with the duty of ensuring that the clients are satisfied through the provision of quality services. Again, Uber is bound to follow all the laws and regulation that have been instituted by various government and private agencies. 

Uber is the largest online and taxi service provider in the world. Many drivers and other professionals are earning income by working for the company in various capacities. Since its establishment, Uber has encountered a series of lawsuits which are attributed to multiple violations within the top and bottom-level management. The controversies that have faced the organization have maligned its name, an aspect that is detrimental to the sustainability and viability of the business ( Feeney, 2015 ). Indeed, judging from the losses the company has made for three consecutive years, it is logical to conclude that ethical and legal challenges are attributing to the financial misfortunes of the company. Virtually, in almost all the metropolitan areas within different continents that Uber operates, there has been a series of protests and demonstrations that have rocked the company ( Cramer & Krueger, 2016 ). The ethical and legal violations of Uber highlight the chasm between business ethics and corporate culture. 

Ethical Dilemma 

As an organization that is operating on a new platform, Uber has had a fair share of ethical dilemmas. Uber has its close competitors that are working relentlessly to expand and increase market share ( Feeney, 2015 ). To counter the competition, Uber has engaged in unethical practices. The transport industry is operated under the guidelines and dictates of the regulators. The regulators are government agencies whose policies are created by the legislators. At times, the regulations enacted become unfavorable to the businesses. Uber has always taken another trajectory to deal with the regulation menace ( Simmons, 2018 ). It is reported that Uber uses public support and lobbying groups to launch a political campaign against the regulations to ensure that the rules are repealed. In this context, Uber has directly engaged in politics with special interest ( Simmons, 2018 ). Politicization of business issues is harmful as it promotes vices like corruption. In amassing political support to deal with policy changes, special interests are developed ( Simmons, 2018 ). In the end, the organization obtains a political debt that has to be paid 

Another issue critical ethical issue the company is dealing with is antitrust policies. Antitrust policies are implemented to regulate competition in the market. Introduction of Uber services in the metropolitan areas has led to an increase in protest among local taxi drivers due to unfair business practices of the organization ( Larcker & Tayan, 2017 ). The local taxi drivers have been complaining that Uber services are killing their business pushing them to the brink of unemployment. With regulations governing the transportation network company in most countries still under formulation due to the rapid changes and challenges, the media has often reported the attacks on Uber taxi drivers. As such, the safety and security of Uber drivers are not guaranteed in any way due to the nature of the business. From this perspective, Uber has the responsibility of taking care of the welfare of its drivers by ensuring that its standards of operation are aligned with the prevailing conditions in the market. 

Uber faces the dilemma of maintaining and sustaining the prices of its services. The dynamic pricing model that the company has adopted has instigated complains from the customers ( Larcker & Tayan, 2017 ). This model of pricing escalates prices of Uber services when the demand is high. Conversely, the taxi users are accustomed to a fixed price for known and regularly visited destinations. Cases have been reported of higher Uber prices in emergencies. For instance, during the Hurricane Sandy and London Bridge attack, Uber services were surcharged ( Larcker & Tayan, 2017 ). This move highlights a deficiency in the ethical stance of the organization. In such emergencies, especially those that affect the national security, business should demonstrate patriotism and social responsibility by offering their services in various capacities with the aim of helping those in need rather than capitalizing on the fateful event to make financial gains. 

Uber has been on the news for pursuing unorthodox methods of curtailing competition. For instance, in 2014, the company was accused of ordering rides from competitors then canceling the request. The two intentions of the Uber employees involved in the calculated plan was to waste drivers’ time hindering them from making genuine customer transport and offering them incentives to join the company. This action violates the antitrust policies, which demand a high level of ethical practices in business organizations. Another incidence that pokes holes to the Uber adherence to antitrust policies is the disruption of Lyft. Lyft is the main competitor and threat to Uber. In 2014, it was reported that Uber marketing managers engaged in unethical practices by trying to sabotage Lyft launch in New York. The event dubbed operation SLOG led to the cancellation of approximately 6000 Lyft rides, which led to massive financial and resource losses to the organization ( Larcker & Tayan, 2017 ). 

The controversies surrounding Uber’s operations takes a new twist with the deliberate and conscious move the organization sought to thwart law enforcement operations ( Spott, 2018 ). Any business is subject to the law. Such implies that when the law enforcement agencies have sufficient reasons to question the activities of an organization, then it is morally expected for the organization to cooperate with the enforcement officers and provide all the relevant information pertaining the case. The operations are typically done to safeguard the business and the public at large. However, in one incidence reported in Brussels, Uber created a program nicknamed Ripley, which changed passwords, locked or shut off staff computers to deny access to the authorities ( Spott, 2018 ). The creation of this program to perform the above-mentioned functions exemplifies the moral and legal degradation of the company. 

Uber has been on the spot for violation of user privacy and data breaches ( Larcker & Tayan, 2017 ). The company has faced an incident in which its systems were hacked and the personal information of its drivers exposed. Conversely, Uber has been accused of secretly using clients’ data to monitor their movement especially the journalists and politicians. The company was exposed for concealing the leakage of confidential information. In 2018, the company reached a settlement initiated by the Federal Trade Commission after owning up to the false claim that it was regularly monitoring its internal mechanism to access clients’ personal information. 

Whereas the legal and ethical concerns have been raised about Uber’s method of conducting business, responding to emerging threats, and resolving conflict, one fundamental question that remains unanswered is the safety concern. In the current business environment, the managers are expected to hire employees with a clean background both for the safety of the business and the consumers. Uber drivers must have a clean background to enhance the security of the clients. However, Uber has been fined for failing to conduct a proper background check on its drivers ( Feeney, 2015 ). The weight of this matter is expounded on the potential criminal harm the driver might pose to the clients. The second issue that is of great concern to the users and the regulators is the use of map by the drivers while still on the wheel. Regulations have been established regarding the use of mobile phones while driving. It is a violation of traffic rules to use mobiles phones while driving ( Larcker & Tayan, 2017 ). However, due to the nature of Uber’s services, the drivers are obliged to access the app, which might divert their attention leading to accidents. This is an ethical dilemma, which arises from the nature of the business. 

Ethical Frameworks 

The decisions that are made by humans can be categorized as either right or wrong depending on the ethical and moral foundations ( Ferrell & Fraedrich, 2015 ). The society espouses ethical focus in all aspects of human life including in business. As such, in the event of a wrong situation, it is incumbent upon the person to draw a line of the ethical point. Ethical thinking is the framework for decision-making. Ethics are universal guidelines that are non-discriminative and impartial ( Ferrell & Fraedrich, 2015 ). Such implies the strong chains of ethical connection bind all persons regardless of their status in the society. Business leaders are mandated to lead by example when making decisions. The contextual response to an ethical dilemma situation tests the credibility of a business leader. In this case, Uber managers have encountered events that assess their level and mastery of ethical focus ( Ferrell & Fraedrich, 2015 ). In making management decisions regarding the ethical dilemmas the organization has faced, the managers have mostly relied on consequentialist and duty ethical frameworks. 

The Consequentialist Framework 

The management of Uber has always relied on the consequentialist framework while making decisions in response to various issues that have faced the company. From a consequentialist perspective, the managers assess the future consequences of potential courses of action ( DesJardins, 2014 ). The management assesses who will be affected directly or indirectly from such actions. As such, the businesses leaders have opted to focus on the appropriate methods for achieving the best outcomes for the organization. In this particular framework, the managers have taken the utilitarian approach. According to the dictates of the utilitarian approach, an action that is taken should be for the greater benefits of the majority ( Ferrell & Fraedrich, 2015 ). For instance, Uber drivers complained about lower salaries compared to the potential earnings the managers had projected. The managers responded to this issue by reviewing the salaries and remuneration of drivers. Another response to an ethical dilemma that was highlighted in the prevision section was hiked prices during emergencies. The management of Uber offered free rides to people during the earthquake that occurred in Central Mexico. 

The Duty Framework 

This framework explores the duties and obligations that individuals should uphold in different situations. Business ethics demands that all the employees should follow the right action while conducting various affairs ( Idowu, Capaldi, Zu, & Gupta, 2013) . For instance, the driver must safely transport the client to his or her place of destination. In various scandals that have rocked Uber, the managers have always stood up with an unwavering stance on the moral and ethical inclination of the organization. Some of the lawsuits that the company has battled in the courts are attributed to individual or group behaviors without the knowledge of the top managers. In all these events, the isolated cases have been vilified and condemned by the top management with a strong equivocation that unsanctioned individual actions that lead to depredation of company’s reputation are a violation of the corporate cultures and believes ( Idowu, Capaldi, Zu, & Gupta, 2013) . By condemning the actions of unethical employees, the management sets precedence on the expected corporate culture and belief that each person working for the organization should uphold and sustain in all situations. 

Consumer Protection 

With a growing economy, many businesses are starting up to offer goods and services to the consumers. The enormous profits mainly motivate businesses that they project to make. However, cases have been reported on unethical and illegal practices, which businesses undertake in a bid to achieve organizational goals such as large market share and profitability. Businesses may offer substandard good and services with the goal of reducing operational costs. As such, it is incumbent upon the government and other consumer protection agencies to formulate policies that will ensure the consumers get the value for their money while protecting their dignity and fundamental human rights. Through consumer protection regulations and standards, an individual is insulated from unfair treatment from business organization, unsafe products, deceptions, and fraudulent business activities. The regulations stipulate measures that enable the consumers to identify genuine businesses. Consumer protection solidifies the ethical stance in the business community. For instance, the fake and misleading advertisement can be controlled through consumer protection. 

The significance of consumer protection can be appraised from both the business and customers perspectives. From the consumers’ point of view, the protection highlights and mitigates the ignorance. Most business capitalizes on consumer’s disorganization and ignorance. In the consumer protection statutes that are the product of legislation, education of the consumers is the effective way of empowering the customers to know their rights regarding what businesses offer them. Additionally, the consumers learn ways of solving disputes that may arise due to perceived unfair treatment or unethical conduct of businesses. Consumer protection also affects the business standpoint. Whereas government regulations might affect the nature of consumer protection, businesses can promote the activity by the formulation of internal standards and procedures that enhance the affairs of the consumers. Consumer protection is a key component of corporate social responsibility. Businesses must influence positive change in the social environment. Social responsibility ascertains the protection of consumers while offering mutual benefits to the organization. Lastly, the business must understand that it uses society’s resources in the production of its good or services. As such, the businesses must keep the interest of the public in mind by providing safe products at affordable prices to the consumers. 

Three Legal Concepts 

The diverse nature and aspects of businesses have necessitated the legislators to formulate and enact regulations that deal with specific business issues. All businesses are required to adhere to the regulations without compromise. Failure to follow the rules and terms of engagement as enshrined in the laws attract hefty fines, penalty, and jail terms for the convicted offenders and organizations. Three legal concepts that define business relationships and activities include the intellectual property laws, employment laws, and securities law. 

Intellectual Property Laws 

The intellectual property serves the purpose of protecting and securing inventions, artistic works, and designs. The legal rights of intangible assets ensure that people, who invent, create or design works can profit from their knowledge without the fear of exploitation or misappropriation by other unscrupulous individuals ( Bently & Sherman, 2014 ). The laws are safeguarded in Article 1, Section 8 of the constitution by empowering the Congress with direct authority to grant inventors and authors exclusive rights to their inventions and creations ( Bently & Sherman, 2014 ). The intellectual property laws are enforced by two governmental agencies including the U.S Copyright Office and the U.S Patent and Trademark Office. The laws protect the inventors from infringement of their works leading to assured financial gains. In other words, the government protects its citizen from unethical behavior that is rampant in the business ecology ( Bently & Sherman, 2014 ). 

Employment Laws 

The employment laws safeguard the rights and duties of workers and employers. The laws are critical in defining the business discourse considering the importance of human resource management. The clear definition of the laws empowers the employees and employers to know and understand their rights ( Keller, Darby, & Bevernage, 2015 ). The backdrop for employment laws dates back to the 20 th century when many workers protested inhuman working conditions, low wages, and oppression. Many countries that have robust employment laws have witnessed significant harmony in the workplaces leading to high productivity due to enhanced employee satisfaction. The employment laws set standards and baselines including minimum wages and safety standards ( Keller, Darby, & Bevernage, 2015 ). Employers who violate the rights of workers are often charged in courts. The significance of employment laws extends to tackle various social issues that affect many organizations such as gender bias and discrimination. 

Securities Regulations 

Security regulations are created to protect the interest of investors in companies. Securities are intangible rights in an organization or an entity ( Meaning, 2016 ). Organizations trade their securities in the stock market to attract investors. The prices of the stocks are constantly changing depending on the prevailing internal and external factors. The fundamental principle that governs security regulation is the absolute disclosure of financial information to the investors. This is because security trading is always marred with manipulative and deceptive activities such as insider trading. Numerous organizations have been implicated in insider trading ( Meaning, 2016 ). As such, security regulations are of great importance to the investors who take the risk to buy stocks in various companies. The regulations provide a framework that restrains the organization to operate within ethical and legal boundaries. 

References 

Bently, L., & Sherman, B. (2014).  Intellectual property law . Oxford University Press, USA. 

Cramer, J., & Krueger, A. B. (2016). Disruptive change in the taxi business: The case of Uber.  American Economic Review ,  106 (5), 177-82. 

DesJardins, J. R. (2014).  An introduction to business ethics . McGraw-Hill/Irwin. 

Feeney, M. (2015). Is ridesharing safe? CATO Institute Policy Analysis, 767. 

Ferrell, O. C., & Fraedrich, J. (2015).  Business ethics: Ethical decision making & cases . Nelson Education. 

Idowu, S. O., Capaldi, N., Zu, L., & Gupta, A. D. (2013).  Encyclopedia of corporate social responsibility  (Vol. 21). New York: Springer. 

Keller, W. L., Darby, T. J., & Bevernage, C. (Eds.). (2015).  International labor and employment laws . Bloomberg BNA Books. 

Larcker, D., & Tayan, B. (2017). Governance Gone Wild: Epic Misbehavior at Uber Technologies. 

Meaning, C. (2016). Securities regulation.  Stat ,  8 (1118), 1. 

Simmons, O. (2018). Corporate Political Activism 5.0.  Jotwell: J. Things We Like , 1. 

Spott, P. (2018).  UBER: A Case Study in Strategy, Leadership and Change  (Doctoral dissertation, The College of St. Scholastica).