Mgmt5507 How Uber Organise and Control Its Services and Workers, and the Social Implications of Uber Practices?

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MGMT5507 
Management and Organisation

Business Report

How Uber organise and control its services and workers, and the social implications of Uber practices?

Prepared by Komar Herliyan Nahaunus

UWA Business School

17 April 2018

Content

1. Abstract………………………………...…………………………………………………….2
2. Introduction……………………..……………………………………………………………2
3. Discussion……………………………………………………………………………………3

1. Uber Services and how it controls the business ..………………………..…………3
2. Uber management style and how it treats its Worker.……………………………...4
3. Ethical and social impact………………………………………………………………7

1. Conclusion…………………………………………………………………………………...8
2. Recommendation……………………………………………………………………………8
3. Reference list..……….……………………………………………………………………...9

1. Abstract

Internet, mobile apps and sharing economies are causing changes to how people work or how they run their businesses. Uber is one of the companies that grew out of this situation. By using the software application, Uber provides services to its passengers while controlling its drivers. Uber also incorporates several styles of management to run its business, including Classical Perspective, Humanistic Perspective and Management Science Perspective. Uber also treats its drivers as independent contractors where this treatment raises legal and ethical issues in some areas. Also, Uber's business model gives impacts on the social environment.

1. Introduction

The development in the world of technology and startup applications give a significant influence on the emerging of gig economy. Where in this situation, people no longer need to come to the office to work, they simply complete the job they receive via the online system and earn income through the online system as well. This platform makes the transaction simpler and creates more job opportunity. The popularity of the gig economy is increasing, and it penetrates various types of industries and businesses. One of the businesses that grow out of this gig economy is Uber. Nevertheless, there is always two side of a coin in every situation. Uber business model not only has the gig economy advantages but also has weaknesses and give rise to the social and ethical problem.

This report describes Uber services and how it controls its business, discusses Uber management style and how it treats its workers, as well as ethical and social implications arising from Uber practices.

1. Discussion

3.1        Uber services and how it controls the business

Services

Uber provides alternative transportation services; it uses an app to connect driver and passenger. In general, there are two categories of Uber services: for passengers and drivers. Before the passengers could enjoy the service, they should request a ride using the Uber app. From this app, passengers can find out the fare before the journey is made, and they may choose to pay via several payment gateways. Furthermore, customers can find out the approximate time of the driver arriving at the pick-up location as well as information about the driver and the vehicle. Moreover, the passengers can determine the destination point through the app; then they will be asked to provide a rate for the driver ranging from 1 to 5 stars upon arrival. As for the drivers, Uber offers work time flexibility, freedom to decide when and where they want to start to “work”, and independence whether they want to accept the order or not (Rosenblat, 2016). Also, Uber can help its partners to get orders more easily by marking areas that have high demand (hot area) in their apps. However, one must provide all the thing that they need to themselves to become Uber driver, for example, car, insurance, mobile phone.

Controls

According to Thompson and Van den Broek (2010), the job of a manager is to make decision and control. However, Uber management takes a different approach to control their drivers. The managers delegate their authority to evaluate their workers in the hands of their customers (Lee et al. 2015). Rosenblat (2016) mentions that there are three ways to measure the drivers’ performances used by the company, such as rate given by the passengers, the number of jobs accepted, and the number of jobs cancelled. Each passenger will rate the service given by the driver on a scale from one to five stars; consequently, the drivers are required to get a rating of at least 4,6 on average. If their average is below the required value, they will lose access and not get the job for some time (Uber, 2018). Furthermore, the company requires the driver to receive at least one job in six months, for their account to remain active and able to receive a job from Uber (Uber, 2018). Moreover, Uber monitoring the order cancelled percentage of a driver. The driver could be deactivated if their percentage was climbing more than 10% (Uber, 2018). Through this controlling system, the company can evaluate its workers on a large scale and systematically. In addition, to maintain the service quality to passengers the company also determines the minimum specifications of vehicles that can work with them, such as the age of the vehicle, the number of seats, the type of car (Uber, 2018).

3.2        Uber management style and how it treats its Worker

Uber Management Style        

Sanders and Pattison (2016) believe that Uber become one of the pioneers in the gig economy business model. Uber has an innovative management style. The management using technology to coordinate their businesses and to connect their services to the customers (Zickuhr, 2016). It combines several approaches to manage their business activity also. One of the approaches that Uber uses is classical perspective. Samson et al. (2018) describe classical perspective as an approach to management which emphasis on rational thinking to increase workers productivity. Through this approach, the management prescribes some parameters to measure drivers' performance and give additional incentives for the driver who can reach targets within the specified time.