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Review Case 02: Uber Hits a Bump in the Road in your textbook. Respond to the qu
Review Case 02: Uber Hits a Bump in the Road in your textbook. Respond to the questions for discussion. What are the ethical challenges that Uber faces in using app-based peer-to-peer sharing technology? Since Uber is using a disruptive business model and marketing strategy, what are the risks that the company will have to overcome to be successful? Because Uber is so popular and the business model is being expanded to other industries, should there be regulation to develop compliance with standards to protect competitors and consumers? Case 2. Uber Hits a Bump in the Road * Introduction Uber Technologies Inc. (Uber) is a tech startup that provides ride-sharing services by facilitating a connection between independent contractors (drivers) and riders with the use of an app. Uber has expanded its operations to 425 cities in 72 countries around the world and is valued at around $70 billion, making it the world’s most valuable startup. Approximately 30 million users use Uber’s services monthly. Uber has become a key player in the sharing economy, a new economic model in which independent contractors rent out their underutilized resources such as vehicles or lodging to other consumers. The sharing economy is quickly becoming an alternative to owning resources outright. Because its services cost less than taking a traditional taxi, Uber and similar ride-sharing services have upended the taxi industry. The company has experienced resounding success and is looking toward expansion both internationally and within the United States. However, Uber’s rapid success is creating challenges in the form of legal and regulatory, social, and technical obstacles. The taxi industry, for instance, is arguing that Uber has an unfair advantage because it does not face the same licensing requirements as they do. Others accuse Uber of not vetting their drivers, creating potentially unsafe situations. Some major cities are banning ride-sharing services like Uber because of these various concerns. Additionally, Uber has faced various lawsuits, including a lawsuit filed by its independent contractors. Its presence in the market has influenced lawmakers to draft new regulations to govern this “app-driven” ride-sharing system. Legislation can often hinder a company’s expansion opportunities because of the resources it must expend to comply with regulatory requirements. Uber has been highly praised for giving independent contractors an opportunity to earn money as long as they have a car, while also offering convenient ways for consumers to get around at lower costs. Although its “Surge Pricing” technique has been criticized for charging higher fares during popular times, it is also becoming a model for other companies such as Zappos in how it compensates its call center employees. The biggest issues Uber faces include legal action because drivers are not licensed, rider and driver safety, protection and security of customer and driver information, and a lack of adequate insurance coverage. To be successful, Uber must address these issues in its marketing strategy so it can reduce resistance as it expands into other cities.

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