Prepare: The required material for this discussion will introduce you to what is new about Uber as a business model, the profit incentive in business, and how laws can make or break innovation in business. Your preparation should focus on the characteristics of capitalism and socialism, as well as other business concepts presented in the required material. Since your initial post in this discussion will examine the relation between running a business such as Uber and the laws and economic system of the nation(s) in which it operates, make sure to comb the material on Uber for laws, regulations, and the economic setting that affect its operations. You are encouraged to research relevant laws and regulations to make sure that you have current information.

Reflect: Keep in mind that Uber has presented itself into the market not as a transportation service but as a service that pairs consumers with ride sharing services by means of a unique phone app. But some sources—including the taxi industry and one California court finding (details in the required material), as well as the characterization of Uber presented in Section 2.5 of the textbook—seem to challenge this branding.

Steinmetz, K. (2015, June 17). Why the California ruling on Uber should frighten the sharing economy (https://time.com/3924941/uber-california-labor-commission-ruling/). Time. Retrieved from http://time.com/3924941/uber-california-labor-commission-ruling/

(Fieser, 2015, Section 2.5) Price gouging does not just exist within the pharmaceutical industry, of course. Recently, the transportation company Uber has been heavily criticized for its “surge pricing” strategies that can sometimes charge customers up to seven times a normal fare during peak hours of demand. Customers complain that the company takes advantage of users when they need the service the most, such as during holidays and bad weather. In fact, the company was even accused of jacking up prices during a recent hostage crisis in Australia, charging customers a premium to leave the financial district where the crisis was taking place. Uber’s response to one customer’s complaint was that, during peak demand times, “without Surge Pricing, there would be no car available at all” (Lowrey, 2014).

Fieser, J. (2015). Introduction to business ethics [Electronic version]. Retrieved from https://content.uagc.edu/

According to these sources, Uber is avoiding laws that apply to the transportation industry and, thereby, usurping a rightful place that the taxi industry has carved for itself. Consumers, on the other hand, have shown their preference for Uber by a high demand for its services in the USA and abroad, including those countries in which Uber has been banned. Compared to taxis, Uber offers consumers an efficient system for procuring a ride even in remote areas where taxis do not frequent, a convenient payment method (no need for cash, and fares can be split among different users on the same ride), and significantly cheaper fares compared to taxis. In many instances, Uber cars come equipped with water, candy, and magazines, all for free. Uber drivers are also better off because they keep the majority of the fares for the rides that they service, which is exactly the opposite case of taxi drivers, and they can choose when they want to work. Clearly, this is a controversial case and thus very apt for the examination for this discussion.

 

Keep in mind that a nation’s economic system is shaped by the laws that are in place. Accordingly, laws (including state regulations and local ordinances) will give you a clue for the kind of economic system that exists. Keep in mind also that most nations have mixed economies and there is probably no economic system that purely represents socialism or capitalism. So you will find a different combination of both socialism and capitalism in any nation that you are examining.

Write: You have four tasks. In order to present an organized post, address each one of these tasks in a separate paragraph and in the following order.

• Your first task is to articulate the economic system (or combination of characteristics of both socialism and capitalism) that such laws depict.
• Your second task is to examine the laws that either support or limit the operations by Uber. Your third task is to analyze how your findings from your first and second tasks affect Uber.
• Your fourth task is to present your moral position with regard to Uber. For this latter task, you will need to identify one of the three ethical theories (utilitarianism, deontology, or virtue ethics) as support for the moral position that you are taking. For example, you may hold the moral position that Uber is morally justifiable because it provides a good for consumers that fills in a gap that had not been met by the taxi industry. Or you may take the position that Uber’s positioning in the market is morally wrong.
• 3 references in APA notation
• Your list of references should include the video

Smith, J. W. (2015). The Uber-all economy (Links to an external site.). Market News, 49(6), 26. Retrieved from http://www.independent.org/pdf/tir/tir_20_03_10_smith.pdf

 

Mashable. (2014, October 9). What is Uber? | Mashable explains (Links to an external site.) [Video file]. Retrieved from https://youtu.be/tQlgavP5cmo

 

TechCrunch. (2015, June 17). Uber driver ruled employee, not contractor, in CA | Crunch report (Links to an external site.) [Video file]. Retrieved from https://youtu.be/n3QJWPg5TLA