Uber Technologies Case Study
Uber Technologies continues to reel from a series of major public relations crises over the past year. The multinational transportation company, headquartered in California, operates in several cities worldwide with thousands of employees offering vehicles for hire and food delivery services. Uber has recently faced a spate of labour law violation allegation lawsuits by both its worker’s and workers’ rights watchdogs.
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The lawsuits allege that Uber has committed labour abuses by deliberately misclassifying its drivers as independent contractors rather than employees to evade its employee obligations. By illegally misclassifying its drivers as contractors, the plaintiffs have accused the company of violating the minimum wage law and depriving workers of their benefits, such as overtime and leave. While the minimum wage requirement under the Fair Labor Standards Act is $12/hour, as independent contractors, the drivers are only entitled to a mere $8/hour. A majority of these lawsuits have been handled through out-of-court arbitration agreements.
These arbitration agreements have, however, been termed an “unfair bargain,” considering they are based on Uber’s company service agreement. Stakeholders seek to prevent arbitration agreements to allow misclassification lawsuits to be handled inside the court. A spokesperson for one of the class action lawsuits against Uber claims that “although the company classifies its drivers as independent contractors, these drivers provide transportation which is the main service of the company.”
Uber’s driver contractual employment terms allow the company to reduce operational expenditure and maximize revenue and profit. By treating its drivers as contractors, the company also avoids expenses incurred in employee benefits such as leave, overtime compensation, medical care, and occupational hazard risk allowances. Some rulings have upheld the company’s claim that its drivers are independent contractors because they “are free to nap when they want, pursue personal errands, or personal indulgences.”
Case Study Analysis
In this case, the main stakeholders are the Uber drivers who represent the workers directly affected by the alleged rights abuses and poor working conditions such as low minimum wage and benefits deprivation. The company executives against whom the allegations are raised are also stakeholders. Similarly, the shareholders and investors of the company are also affected since their profit-oriented business interests are at stake. The other stakeholders are the workers’ rights organizations, such as the United States Department of Labor, and non-governmental organizations that monitor and enforce workers’ rights. Finally, the US court system responsible for handling litigations is also concerned.
From the business perspective, measures to improve the working conditions of its drivers by taking them on as employees rather than contractors would be non-feasible. Uber is a for-profit business organization. According to Milton Friedman’s theory of individualism, a business is at liberty to pursue any strategies necessary to serve the interests of stockholders (Stanwick & Stanwick, 2016). Since the principal agenda of the shareholders is to maximize profit, the company is not wrong to hire drivers as contractors if it serves the profit-oriented interests of shareholders. Opting to hire drivers on a contract basis is not unethical since the alternative represents prohibitive operational expenses for the company.
However, from a practical point of view, Uber’s decision to hire drivers as contractors is unethical since it does not benefit most stakeholders. According to the utilitarian worldview, the actions of an individual or entity have to result in the greatest good for the majority of the concerned individuals (Stanwick & Stanwick, 2016). Uber’s current hiring criteria only benefit the company executives and shareholders, while the thousands of drivers, state agencies, and workers’ rights organizations are displeased. It is, therefore, unethical because only the minority, executives and shareholders, benefit from the frugal working conditions.
Similarly, according to the Bible, the actual test of how much people care about others is how earnestly we are concerned about their issues. The Bible teaches “by occasion of the forwardness of others…to prove the sincerity of your love” (1 Cor. 13:4 New International Version). Caring for other people’s needs should not be deemed as a transfer of burden but as a means to establish equality by helping others when they are in need so that they may also help you when you are in need. Uber needs to tailor its employment terms to address its workers’ concerns as much as possible. Improving the working conditions of its drivers will establish equality between the company and its workers by ensuring drivers are appropriately compensated and by enhancing the company’s reputation and performance through increased worker motivation and job morale.
Values-Aligned Leadership model
Value-aligned leadership emphasizes the role of clarity of organizational purpose and expectations of a corporate citizen in the performance of an organization (Hopkins & Scott, 2016). According to this model, the leadership of an organization gains the support and cooperation of the members of the organization by effectively imparting the organization’s strategic vision among the members and not compromising on core principles and promises (Hopkins & Scott, 2016). This inspires trust, loyalty, and commitment.
Based on this leadership model, Uber should first declare its profit-oriented intentions to all the stakeholders. It should also clearly explain the details of the terms of the hiring contract to its drivers, including wages and extra compensation. The management should observe consistency in dealing with each employee’s concern rather than taking a case-by-case approach to the various arbitration agreements and lawsuits. This will convey the company’s commitment to fairness and equality. Any resolutions reached through arbitration or litigation should be delivered to maintain mutual goodwill and trust and to lead by example.
The company should also show respect and appreciation for its drivers as the workers in charge of its core business by revising compensations. Since changing the terms of hiring from contract to employee may be operationally costly, Uber can revise driver compensation terms by improving the minimum wage and offering additional compensation for any extra work. This will inspire trust and loyalty by showing the drivers that their crucial significance in the continued excellence of the business is not taken for granted.
Identify ethical issues from the case study you created and how a minimum of three different worldviews might approach these issues, including a biblical one.
In analyzing and responding to this ethical problem, I expect students to raise concerns about the legal definition of an employee and an independent contractor and their legal entitlements. Similarly, some students may be interested to know the provisions of the FLSA on workers’ rights. Besides, I would expect some students to raise issues regarding the relevant terms of Uber’s company service agreement for drivers. Students may also be interested to know the legal classification of taxi driving as skilled, semi-skilled, or unskilled work. Finally, students may also be concerned about the job description of an Uber driver and the actual working conditions, including working hours, compensations, and driver discretion.
Elements of the traditional ethical theory
In applying ethical theory to the case discussion, students need to consider the view of normative individualism by ensuring the main stakeholders, including drivers and the company, are considered in the ultimate evaluation of ethical principles and values (Stanwick & Stanwick, 2016). Similarly, the discussants should evaluate the concerns of the various stakeholders only according to whether they are essential for justification. Besides, the discussion should embrace pluralism by considering all or several possible dimensions of the ethical issues, ethical principles, and values and the recommended actions (Stanwick & Stanwick, 2016). In addition, in the event of multiple opposing perspectives, the aggregation principle should be observed in making decisions (Stanwick & Stanwick, 2016). Finally, in applying concrete principles and making conclusions, the relativism of values and regulations should be observed (Stanwick & Stanwick, 2016).
Elements of worldview
Furthermore, when addressing a worldview perspective of the ethical problem, the discussants should include the element of human nature, the fact that people are not by nature good or bad but make decisions that may be good or bad (Sire, 2009). The element of equality of all people also needs to be considered. Besides, the students should include part of the responsibility to others in evaluating Uber’s ethical problem from opposing perspectives (Sire, 2009). The primary sources of moral wisdom should be included in the evaluation, including religion, nature, or science (Sire, 2009). Finally, the students should consist of the element of the good life (Sire, 2009), especially from the position of the drivers.
|Thoroughly analyzed and identified the ethical issues and raised issues relevant to the case study||Thoroughly analyzed and identified most of the ethical issues and raised at least one point in the case study.||Analyzed and identified the ethical problems in the case study||Failed to demonstrate the ethical issues in the case study|
|Accuracy of response||Demonstrated excellent understanding of ethical theory and worldviews||Demonstrated adequate knowledge of ethical theory and worldview||Improperly applied not more than one ethical theory or worldview||Inappropriately applied ethical theory and worldview|
|Elements of ethical theory||Included at least three elements of traditional ethical theory||Had at least two aspects of conventional moral theory||Incorporated less than two elements of traditional moral theory||Failed to have any part of ethical theory in the response|
|Elements of Worldview||Included at least three elements of worldview||Had at least two aspects of worldview||Incorporated less than two elements of worldview||Failed to have any part of worldview in the response|
|Grammar and clarity||Proper and explicit command of language||Excellent and precise knowledge of the language||Few grammatical mistakes, but the response is still clear||Grammar mistakes affecting the clarity of content|
Other Relevant Post: Adaptive Structures
Hopkins, W. E., & Scott, S. G. (2016). Values-based leadership effectiveness in culturally diverse workplaces. Cross Cultural & Strategic Management, 363-385.
Sire, J. W. (2009). The Universe Next Door: A Basic Worldview Catalog. ReadHowYouWant.com.
Stanwick, P. A., & Stanwick, S. D. (2016). Understanding Business Ethics. SAGE Publications.
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Session 5: Global Stakeholders and Corporate Social Responsibility (CSR)
In this final session, we will examine business ethics related to international business and corporate social responsibility (CSR). Perhaps there are no more controversial areas in business than so-called “social responsibility.” Simply defining “social responsibility” will create resentment among groups with competing views. We can exercise our objective and critical thinking skills in evaluating and discussing those divergent views.
“When in Rome, do as the Romans do” — is this a valid ethical perspective? Throughout this course, we have addressed such issues as absolute (apodictic) truth, moral relativism, and situational ethics. This session will bring our views on those issues to their boiling point. Leadership as stewardship will have far-reaching implications as we deal with these issues and develop our positions. One thing is sure: ignoring the issue is not an option in the global economy in which we operate.
By the end of this session, you will be able to:
- Propose recommendations for addressing problems based on understanding corporate social responsibility (CSR) and a biblical worldview.
- Create a case study that poses an ethical issue that requires the application of ethical decision-making models, ethical theories, and a personal worldview.
- Develop a guide for facilitating the discussion and analysis of an ethical case study based on ethical theory, a biblical worldview and applying a values-aligned leadership decision-making model.
- Critically reflect on how course learning will influence ethical, values-aligned decision-making and action in leadership.
Reading and Viewing Assignments
Please complete the following before this session:
- Stanwick, P., & Stanwick, S. (2016). It understands business ethics (3rd ed.).
- Chapter 1: The Foundation of Ethical Thought (pp. 15-18)
- Chapter 3: Stakeholders and Corporate Social Responsibility
- Chapter 8: Ethics and the Environment (review)
- Chapter 11: Ethical Issues in the Developing World (review)
- Sire, J. W. (2009). The universe next door: An essential worldview catalogue (5th ed.).
- Chapter 9: A Vanished Horizon
- Chapter 10: A View from the Middle East
- Chapter 11: The Examined Life
- Christ – Our Pattern of Social Responsibility
- Read 2 Corinthians 8:8-15.
In the early days of the Church, Acts 4:32-36 records one of the early church’s greatest strengths and Christ-like actions. Acts 4:32 observes, “All the believers were one in heart and mind. No one claimed that any of their possessions was their own, but they shared everything they had” (NIV).
How should the social responsibility patterns exhibited and explained in these verses be applied to our culture, lives, and actions today? What can we learn from our early Church brethren?
Drawing from the course readings and texts, discussions, and at least three peer-reviewed document resources, prepare a 5-7 page (not including title and reference pages) “case” paper in APA format that consists of two parts:
Part 1 – Your Case Study
Read the article, How to Write a Case Study, by Charles Warner.
- Then prepare a case study based on facts using the guidelines from Warner’s article and your experience preparing responses to case studies. The case should pose an ethical issue that requires a student to apply ethical decision-making models and theories and reach conclusions based on their worldview.
Part 2 – Your Analysis and a Discussion Guide
Prepare a complete analysis of the case. Your analysis must:
- Identify ethical issues from the case study you created and how a minimum of three different worldviews might approach these issues, including a biblical worldview.
- Propose how the case could be approached and resolved by applying the Values-Aligned Leadership model.
- Prepare an instructor’s discussion guide sufficient for use in a classroom that includes the following:
- The issues you would expect students to raise in analyzing and responding to the case.
- You would expect the student to include the elements of the discussion of traditional ethical theory.
- You would expect the student to include the elements of the worldview discussion.
- A grading guideline for grading student responses to the case.
Click on the Session 5 Final Case Analysis link to submit your final assignment by the posted due date. Review the rubric available in Due Dates and Grades for specific grading criteria.
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