Regulating on-demand commerce

I assume over the break that many of you had heard that Uber is once again over headlines. This time it is because Uber paid hackers $100,000 to keep quiet about the fact that they had obtained the personal information of over 50 million customers and drivers. The funny thing about this situation is that it happened over a year ago and we are just now hearing about it. With the release of this information, five different Attorney Generals have launched investigations into this matter. These AGs include Massachusetts, New York, Illinois and Connecticut. Sadly, this is not the first time Uber has been in the headlines as of late. They have been linked to high-profile sexual harassment complaints, federal probes of potential bribery, theft of trade secrets, and pricing issues. I think the cover up shows the low level of ethics that exists in the Uber corporate offices but they continue to be successful (reports show they are worth over $60 billion dollars)

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This breach isn’t the largest or will not have the largest negative impact on those individuals especially when they released the information two months after the Equifax data breach. As they continue to make mistakes I wonder how long can Uber continue to grow. When will people throw up their hands and say enough is enough? Last year in my economics class I was taught that one of the building blocks for the consumer theory is that people engage in tradeoffs. Based on Uber’s continued growth and Benchmark’s (venture capital firm) expectation that Uber will reach a value of $100 billion in the next couple of years, it is obvious that we as a society have not decided that the ethical miscues are worth taking our business to another company, i.e. Lyft.

As our on-demand culture continues to expand, how do we regulate these businesses?  When Professor Chang talked to our class she talked about how courts are still going over cases from the 90s and that technology is moving so fast that it is virtually impossible to make regulations that are effective. With all of these advancement in technology I think one thing has main consistent in our life, and that is the ethics of the people. If consumers decide that that the tradeoffs that I referenced earlier of an on demand ride sharing service were not worth the countless mistakes that Uber has made then one or two things would happen; Uber changes its ways and holds a high moral standard, or they continue down the same path and go out of business. Obviously this has not happened.

In my memory through the years, we have had business leaders that make decisions for their personal benefit, as opposed to holding a high ethical standard (Bernie Madoff and Enron are two that pop in my head). While these issues weren’t known until they were exposed, it shows a trend of unethical business leaders in positions of power. So back to my question; how do we regulate on demand services in our current situation. I think it is through ethics training.  In 17 years of schooling, I have only received one formal class on ethics (first year of my MBA program) and I thought we only scratched the surface on the issue. I did however receive extensive ethics training while I was in the Marine Corps. The reason behind this was that the Marine Corps figured that you might be in a time sensitive situation in which you have not been trained for; and the Marine Corps wants you to make a decision on what is right when you in a situation absent from information from higher command.

I believe that ethical training can make up for the lack of regulations in our ever changing digital business world that we live in. We can hope that business leaders take that training to heart and actually make decisions based on what is right and sound financially for the company. And if that doesn’t work, we can hope that enough individuals decide that they won’t support companies that do not make decisions based on a high ethical standing. I think the only other alternative is to wait for the courts to make decisions about how this new form of commerce can operate.

7 comments

  1. Really good sentiment, and I totally agree with the heart of your post. Ethics and integrity are such imperative assets to instill and train upon in today’s ever-changing digital world. With so many possible touchy situations that can arise within business environments, we must focus on teaching good values. Your experience in the Marine Corps must have been very enlightening and beneficial.

  2. Great post. First of all, #deleteUber. I hate them! They are always on the news on negative stories. I was in Mexico this holiday and Uber over there is trusted, faster, cheaper, cleaner, etc. So its difficult not to use them. We still don’t have Lyft, hopefully, they go to Mexico soon.
    Regarding ethics, I totally agree with you on the classes, training or whatever schools need to do, but we should really have more on that. Hopefully, the better company grows, cough cough Lyft and Uber sinks!!

  3. I cannot believe that Uber is as profitable as it is with their sexual harassment scandals and now this hack. However, I still use Uber all the time. It’s pretty clear that Uber is not going away despite their issues. I completely agree that there needs to be ethical trainings but if Uber is making money without it why spend the money?

  4. Nice post. It’s a real shame that Uber can’t seem to get it act together. It’s a great business being poisoned by a toxic culture.

  5. Great post. I think that more and more information and situations similar to this one are going to come out in the future. It is crazy to me how these massive companies can do these settlements and not tell anyone. That said, I think Uber is too big to go down. I think that it will continue to grow and people will continue to use it out of convenience. I think Uber needs to work on its ethic code and really get its act together before something horrible happens. Personally, as an active uber-user, after hearing this information, I will continue to use Uber because it is convenient and it is what everyone uses, but if something really bad were to come out about the company – that made it seem unsafe or unethical to use – then I would probably switch over to Lyft or another comparable company.

  6. Awesome post! I couldn’t help but think of Uber when Professor Chang came to talk to us. I think it’s the perfect example of technology running far, far ahead of regulation. And Uber provides multiple different scenarios that shows how critical it is to have regulation to prevent the horrible things happening to humans whether its sexual harassment, data breeches, or horrible working conditions. It is shocking to me how they continue to be successful even as they are in the news week after week. This just shows how entrenched Uber really is to our society. I think that ethics is necessary for regulators but also users. Users, myself included, should understand that their usage of Uber is supporting these horrible acts against people. Thanks for sharing.

  7. Uber has been such a transformational app, it’s tough to see the company struggle so much due to bad leadership. I personally don’t have much experience with Lyft yet due to some bad experiences I really want to try them out more often.

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