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Who is responsible? The Ethics of sharing Economy

THE BLOG
Who’s Responsible? The Ethics of the Sharing Economy
 Feb 01, 2017
Alliance for Research on Corporate Sustainability A partnership among academic institutions created to provide data and networking opportunities to facilitate research on corporate sustainability.
N. Craig Smith, INSEAD Chaired Professor of Ethics and Social Responsibility

Should the responsibilities of “sharing economy” giants like Uber and airbnb, differ from those of traditional companies?

 In July 2016, a West Hollywood rape victim sued Uber Technologies over allegations the ride-hailing company—which pitches itself as “the safest ride on the road”—had been negligent in conducting background checks of its drivers. It was not the first time an Uber Driver has been accused of rape, nor was it Uber’s first brush with the law. In July 2015 the firm settled a lawsuit with a San Francisco couple after one of its driver’s struck and killed their six-year-old daughter. And in June 2016, a French court ordered the company to pay €800,000 for running an illegal car hire service, after taxi drivers rioted in the streets in protest that non-traditional car services were violating transport regulations and threatening their livelihood.

In fact, since the launch of its ride-hailing app in 2010, Uber has spent millions of dollars fighting a barrage of lawsuits from governments, drivers, passengers and competitors across the globe. It has been challenged on issues of safety, regulatory breaches, labour rights and business taxes, from the way the company vets its drivers to how it advertises. 

In its defense, Uber has insisted that it is not a transportation company, merely an online platform connecting customers with independent contractors, and responsibility for many of these issues lies with its drivers.

The growth of a new economy

As part of the new “sharing economy”, Uber and similar tech-based firms such as airbnb, TaskRabbit and BlaBlaCar, leverage the ease of data-sharing brought on by the internet age, and a sense of trust in online communities. They provide ways for people to share their under-utilised possessions, holding out a promise of increased sustainability and democratisation of the workplace; redefining the way people do business and, as the name suggests, holding promises of mutual benefits and responsible actions. 

Along the way, many of these companies, like Uber, have gained a competitive advantage by sidestepping the regulations, taxes, permits and sundry charges that competitors in traditional businesses face. As their revenues—and the number of complaints against them—increase, questions are mounting as to whether these firms really are just technological platforms facilitating transactions for individual business people or whether they should be seen as real world companies with the same responsibilities as transport companies, hotels and employment agencies.

The world’s most successful start-up

It would be difficult to argue that in business terms Uber has been anything but a success. In the seven years since its inception, the firm has grown from an implausible Silicon Valley start-up to become one of the most highly-valued privately-held companies in the world, with operations in over 500 cities and $US10 billion in equity funding. 

Uber’s disruptive technology has been successful and effective in prompting taxi companies to clean up their act by bringing new efficiencies to the industry. As the company expands into each new city, potential customers and driving partners seek it out, giving the firm in its view the legitimacy—and some say the arrogance—to start operations with little heed to regulations governing the transport sector. 

But Uber’s aggressive business tactics have come under fire. There are allegations, for example, that the company encouraged its drivers to make bogus calls ordering thousands of rides to jam up the services of an online competitor; elsewhere, rivals have accused the firm of intentionally cut


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