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, which is 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 labor law violation allegation lawsuits by both its workers and workers’ rights watchdogs.
The lawsuits allege that Uber has committed labor 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. Additionally, by treating its drivers as contractors, the company avoids expenses that would be 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 the drivers “are free to nap when they want, pursue personal errands, or personal indulgences.”
Case Study Analysis
The main stakeholders, in this case, are the Uber drivers who represent the workers who are 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 that is responsible for handling litigations is also concerned.
Considered 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 the utilitarian 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 true test of how much people care about others is how earnestly we are concerned about their issues. The Bible teaches that “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 properly compensated and by improving 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 the consistency in the way it deals 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 the company’s core business through the revision of 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 key significance in the continued excellence of the business is not taken for granted.
Identify ethical issues from the case study you have created and how these issues might be approached by a minimum of three different worldviews to include a biblical worldview.
In analyzing and responding to this ethical problem, I would 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 principle of aggregation should be observed in making decisions (Stanwick & Stanwick, 2016). Finally, in applying concrete principles and making conclusions, the element of relativism of values and principles 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 the element of responsibility to others in evaluating Uber’s ethical problem from both opposing perspectives (Sire, 2009). The major sources of ethical wisdom should be included in the evaluation, including religion, nature, or science (Sire, 2009). Finally, the students should include 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 issue 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 understanding 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||Included at least two elements of traditional ethical theory||Included less than two elements of traditional ethical theory||Failed to include any element of ethical theory in the response|
|Elements of Worldview||Included at least three elements of worldview||Included at least two elements of worldview||Included less than two elements of worldview||Failed to include any element of worldview in the response|
|Grammar and clarity||Proper and clear command of language||Good and clear command of language||Few grammatical mistakes, but the response is still clear||Grammar mistakes affecting the clarity of content|
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 look at business ethics as it relates to international business and corporate social responsibility (CSR). Perhaps there are no more controversial areas in business than so-called “social responsibility.” Simply defining the term “social responsibility” will create rancor among groups with competing views. We will have the opportunity to exercise our objective critical thinking skills in evaluation 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. Our views on those issues will be brought to their boiling point in this session. The idea of leadership as stewardship will have far reaching implications as we deal with these issues and develop our positions on these matters. One thing is certain, in the global economy in which we operate, ignoring the issue is not an option.
By the end of this session, you will be able to:
- Propose recommendations for addressing problems based on an understanding of 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 the application of 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). Understanding 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: A basic worldview catalog (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 greatest strengths and Christ-like actions of the early church. Acts 4:32 observes that, “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 patterns of social responsibility 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 includes 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 actual 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 own 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 have created and how these issues might be approached by a minimum of three different worldviews to include a biblical worldview.
- Propose how the case could be approached and resolved through the application of 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.
- The elements of the discussion of traditional ethical theory you would expect the student to include.
- The elements of the discussion of worldview you would expect the student to include.
- 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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