Monthly Archives: September 2017

BLOG#2 Government and Business: Uber under threats

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The wide popular American ride-hailing company Uber is a huge success: from offering its service to 633 cities and setting up its ambitious vision of the driverless car industry, it has been always recognized as one of the fastest growing technology company from the Silicon Valley. However, recently Uber’s position in the market plunged due to a set of governmental regulations in both London and Quebec. Consequently, Uber’s CEO Travis Kalanick resigned from his position.

In London, since Uber’s approach to safety regulations are under heavy concerns, Uber’s license has been taken away by the Transport for London and its service will officially end at the end of September. Due to this scandal, last week the Quebec government announced that Uber drivers must go through 35 hours of mandatory training, in addition to have a criminal background check on the Uber drivers carried out by the police. As I dig more information from the Guardian news source, I found out that the past two years occurred many more scandals such as sexual harassment, underpaying the drivers, self-driving pilot failure, and the list goes on. Not only do these seriously challenge Uber’s competitive market advantage but also does it begs the question: what happened to Uber internally?

In today’s world, many businesses pursue fast-growth at the cost of ethics. This extreme short-sighted vision is one of the reasons why Uber’s London license has been taken away: increase the total number of drivers as fast as possible at the cost of safety. One example is that Uber used a software named Greyball, to help drivers avoid being caught when violating local regulations. Frankly, this fast-growth ideology is perfectly aligned with Uber’s business model: letting an ordinary person to earn money with its ordinary vehicles. Investors want the fast-return so they asked CEO to implement Uber into as many markets as possible, while most drivers also want fast cash. Without getting through the process as other taxi drivers did, such as paying licensing expenses, Uber can charge the customer less. Nonetheless, I think this fast-growth ideology is the reason why there occurred so many scandals during the past three years. This inevitably corrupts the management structure of the company. As a company wants to expand too quickly, its mismanagement of human resource leads to many obstacles. Now as Uber wants to expand into many other industries such as the driverless car industry, I am afraid it may run into more obstacles.

Ultimately, what does this short-term ideology reflects about Uber? I believe, frankly, that Uber may be found on the principle of illegality.

 

Word counts: 430

 

Bibliography

Levin, S. (2017, June 27). Uber’s scandals, blunders and PR disasters: the full list. Retrieved September 26, 2017, from https://www.theguardian.com/technology/2017/jun/18/uber-travis-kalanick-scandal-pr-disaster-timeline

Kassam, A. (2017, September 26). Uber threatens to leave Quebec in protest at new rules for drivers. Retrieved September 26, 2017, from https://www.theguardian.com/technology/2017/sep/26/uber-threatens-leave-quebec-drivers

Khan, S. (2017, September 22). Uber deserved to lose its licence – Londoners’ safety must come first | Sadiq Khan. Retrieved September 26, 2017, from https://www.theguardian.com/commentisfree/2017/sep/22/uber-ban-london-safety

Uber is facing the biggest crisis in its short history. (2017, March 25). Retrieved September 26, 2017, from https://www.economist.com/news/business/21719509-can-ride-hailing-giant-stay-fast-lane-uber-facing-biggest-crisis-its-short

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http://www.huffingtonpost.ca/jerry-dias/uber-canada-controversy_b_9252656.html

After finish reading and understanding both Friedman and Freeman’s argument toward business ethics, I personally favor the latter while I possess a strong doubt over Friedman’s static interpretation on Capitalism. In Friedman’s six-page essay on the social responsibility of business, he argues that in acting social responsible outcome, the CEO violate the contract to their shareholder, undermines the work of government (taxation without representation), and might not even have a clear picture of how to contribute back to the society. To attack Friedman’s argument, I think today’s business does not follow a singular direction, what if the CEO discusses his socially responsible project with the shareholders? In fact, a business operates on the basis of this process. Moreover, I believe the work of Corporate Social Responsibility is not even a political one. If we are to speak of the air we breathe or the water drink, it is essentially the welfare of the people. Even though Friedman’s argument may be true in many cases, I feel pure capitalism might not be sustained only from the angle of maximizing profit. Instead, my understanding of Corporate Social Responsibility is that it is not an act of the socialist, but in fact, a necessary and feasible action that may make business more profitable in the contemporary society. So in this blog, I would like to ask the question, can ethics be a part of a business model?

Upon researching on Toms Shoes, a for-profit company based in California that focuses on Shoes and Clothing, I found out that a company’s business model can be indeed installed with ethics. Toms Shoes is famous for its “One for One” model, which for every one shoe sold the company would deliver a pair of free shoe to children who are in need. So far Toms Shoes has already given away 60 million shoes worldwide and has also expanded its mission to provide free water and restore eyesight for people in need in the developing countries. (Shana Lebowitz) In this context, the importance of ethics in regard to attracting consumer and leveraging brand image is obvious: it provides the consumer strong incentives to purchase their product. As the awareness of the role of ethics spreads in today’s world, more and more people are increasingly attracted to this kind of promotion. The consumer is now part of something that is more than a transaction, or as the most would call it as the “caring capitalism”. (Shana Lebowitz) Linking this example back to the stakeholder theory, with the rise of information technology, businesses are assessed from multiple aspects: especially their contribution toward Corporate Social Responsibility. If any business wants to be successful, it must start with ethics.

 

443 Words.

 

Bibliography

Lebowitz, Shana. “On the 10th Anniversary of TOMS, Its Founder Talks Stepping down, Bringing in Private Equity, and Why Giving Away Shoes Provides a Competitive Advantage.” Business Insider, Business Insider, 15 June 2016, www.businessinsider.com/toms-blake-mycoskie-talks-growing-a-business-while-balancing-profit-with-purpose-2016-6.

 

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http://blog.hennaart.ca/2012/11/toms-one-for-one.html

https://www.linkedin.com/pulse/20140324130510-6418773-expanding-one-for-one-to-coffee/