Uber's Regulatory Challenges Case Study

Please answer the 4 related case study questions.

Ilisus harder or Nus) and why is there competition, ainable are new forms of regulation and of regulation and state intervention within a different app between them? 5 How sustainable global context? CASE STUDY Uber's regulatory challenges Uber describes itself as a techno Francisco in 2009, Uber has expand scribes itself as a technologies company. Since it was established in San 00 Uber has expanded its operations to 632 other cities across on countries. Although operating across a number of service areas synonymous with the company name relates to personal point to point ortation. Uber provides a platform, accessed via a smartphone app, linking (Continued) 268 International Human Resource Management (Continued) users to drivers for the purpose of point to point transportation or argues that it is not a taxi company. Moreover, Uber argues that are linked by their online platform are not employees but indepen Uber's website states: There are over 16,000 employees at Uber these are distinct from the 2 million drivers' who service the '10 M pleted each day (Uber, 2018). Uber's business model presents a challenges for the regulation of activities associated with its operat By maintaining that it is a technologies company and not a taxi company not come under the jurisdiction of the regulatory mechanisms that covert traditional taxi companies. The lack of coverage has provided the imperative changes to reflect developments in the sector. For example, the government of New Wales, Australia, established a Point to Point Transport Taskforce to address challenges (ZDNet, 2015), in recognition that: tation. On this basis, Uber ves that the drivers who independent contractors, at Uber as of 2017', but the '10 Million Trips com- presents a number of new th its operations worldwide ta taxi company, Uber does ms that cover the operations of ed the imperative for regulatory ble the government of New South Taskforce to address these new Shifts in demographics, technology and social attitudes are changing expectations of point to point transport and the way they seek and use the services. However, the regulatory framework does not adequately accommodate these changes ... Point to point transport providers have already begun to adant and government regulation must follow. (NSW Government, 2015a: 2.9) The imperative for regulatory change came from the emergence of the new busi ness model, but pressure for change also came from the traditional taxi industry. In addition to voicing concerns over such things as passenger safety (Moir, 2016). driver background checks (BBC News, 2015) and the monitoring of vehicle main- tenance standards, the lack of coverage by existing taxi regulation has been seen as providing an unfair competitive advantage to Uber. In turn this has led to calls for de-regulation of traditional services so that 'the taxi industry is liberated from the regulatory constraints that are making it difficult for providers to adapt' (NSW Government, 2015b: 5). On the basis of constituting unfair competition for tradi. tional taxi companies, Uber has faced bans in Bulgaria and Italy (Rhodes, 2017), An equivalent ban exists in Germany (Siebelt, 2016). Taxi hailing apps have been banned in China (Wan, 2015), similarly the mandatory imposition of taxi meters led to Uber withdrawing from Denmark (McGoogan, 2017). In London, Ubers successful appeal of its loss of licence to operate (Butler and Topham, 2017) trates the constantly shifting regulatory terrain. Not operating on the basis of being a taxi company also raises issu uch as Finland (Hinchliffe, 2016), licensing of individual drivers. In some cases, such as Finland (Hinch ompany also raises issues for the MNCS, Regulation and the Changing Context of IHRM 269 in Costa Rica uber drivers have a regard them Denmark (The Local 2016 drivers being arrested and by a taxi licence. In Brussels (New York Post even physical attacks by tradit The Local, 2016) and New Zealand (NZHerald, 2015), this has led to Uber being arrested and prosecuted for operating without the authority bestowed taxi licence. In Costa Rica (Pretel, 2015), Johannesburg (Burke, 2017) and els (New York Post, 2015), Uber drivers have also been victims of abuse and physical attacks by traditional taxi drivers who regard them as a threat to their pods. In a number of cities around the world, including London, Paris and Rio laneiro, traditional taxi drivers have mounted protests and taken direct action as blockading city streets with taxis, in response to the arrival of Uber opera. allee and Kelion, 2014; Tran, 2014; Specia, 2015; The Guardian, 2015). The ambiguous legal status drivers occupy as independent contractors has been cubiect to challenge in a number of locations, notably Class Action suits in New York, California and Massachusetts, USA. Despite some rulings against Uber, settlements were reached allowing the continuation of the independent contractor status (Tracy, 2016). These settlements were subsequently subject to legal challenge on behalf of the drivers (Isaac, 2016). These rulings are representative of the many protracted legal challenges Uber has faced on an international basis (Fortune, 2016). As Wong (2017) notes: Uber has long faced criticism over its treatment of drivers, which it considers independent contractors rather than employees. The classification of drivers as contractors allows Uber to avoid paying minimum wage or providing ben- efits such as workers' compensation. Trade Unions, and other collective bodies, have been at the forefront of campaigns highlighting the need for employment protection for Uber drivers. A GMB backed campaign in London led to a ruling by an Employment Tribunal (these are in effect courts dealing with employment relations issues) denying Uber the right to treat workers as independent contractors (Osborne, 2016). The tribunal dismissed Uber claims that they were a company offering a platform linking drivers operating their own independent businesses, 40,000 of which existed in London alone. In the UK context, the Employment Tribunal ruling has wider implications for the regulation of the employment relationship, notably for companies seeking to emulate the Uber model. As Rushforth (2017) notes: The courts appear to be increasingly critical of arrangements that disguise work ers as self-employed individuals ... Companies must consider carefully their con tractor arrangements in the light of this trend, and decide if, and how, these should be amended to protect themselves from claims of worker status. (Continued) 270 International Human Resource Management e seeking clarification legal transportation ding the basis for a amifications in terms of as a transportation laws, in addition to (Continued) In a potentially momentous move, Barcelona's Asociacin Profesional successfully took a case to the European Court of Justice, seeking over the legal status of Uber, alleging it was running an illegal trand service rather than a digital booking service. Beyond providing the ba ban on Uber operating in Barcelona, there are wider ramifications in transnational regulation. The ruling in favour of definition as a transa service now compels Uber to abide by EU safety and labour laws, in addid transportation requlation within member states. A ruling in favour of hein digital service provider would have discharged Uber of coverage by transpo tion regulation and labour laws, plus allowed the company to benefit from EU regulation covering the freedom of movement of services. The Europe Commission are keen to push an agenda for the light touch regulation of digital services by member states, with the goal of promoting a single market for din tal services. It should be noted that as a digital services provider, Health and Safety regulations could still have been applied to Uber's activities by member states, but this raises further questions over whether existing regulations would have afforded appropriate levels of protection to service users, equivalent to those covering users of traditional taxi services. Even those that had supported a ruling in favour of Uber in order to avoid 'economy-crushing regulation' and gain absolution from 'burdensome labour and licensing requirements of a taxi company, saw benefit in ending ambiguity through the establishment of an appropriate regulatory framework. Competition is an important function of a healthy economy. So too is regula- tion: it provides the framework for healthy business, sets standards and ensures only fair advantages are gained in the market place. Companies shouldn't operate in a regulatory vacuum, neither should they risk degeneration at the hands of rules that are no longer fit for purpose. (de la Harpe, 2016) Case study questions 1. What are the different regulation issues that the case of Uber raises? 2. What challenges do regulatory bodies such as licensing bodies and trade unions face in dealing with Uber? How should regulatory bodies respond? 3. In what different ways is the 'taxi driver' employment status significant? 4. What are the various regulatory implications of the European Court of Justice ruling involving Uber