Uber’s employee crisis

            Uber Technologies Inc. is one of the leading companies in the transport industry. The company has a 68-billion-dollar market cap and constant demand for the services it offers. Its success in the market it operates in is greatly as a result of the quality of service the company offers to its customers through its employees (Isaac, 2019).  Most of the customers who have used Uber services attest to its emphasis on offering the highest quality of service and most opt for uber over taking other public means of transport including other taxis and car service organizations. Despite the positive image and continued success however, Uber has had a negative relationship with its employees on various occurrences. Employee complains and lawsuits are a common occurrence for the company. The issues that arise between uber and its employees are as a result of the company’s decision to treat the drivers as contractors rather than employees as it puts the drivers at a disadvantage as it denies them the rights and freedoms given to other employees.

            Uber was launched in 2009 and it has received various complaints and lawsuits from the government, its competitors, drivers and even customers who rely on its service. The lawsuits were based on various issues of misconduct relating to intellectual property, lack of conducting adequate background checks when hiring drivers, price fixing, issues related to safety and lack of employee benefits to mention a few (Isaac, 2019). Uber drivers for instance operate on a 50% annual rate which forces the company to seek out drivers with questionable backgrounds or those that who are non-credit worthy as they are the ones most likely to accept the terms of employment (Horan, 2019). Despite its success in the market, the company constantly seeks out ways to exploit its employees and this has greatly contributed to the tension between the company and its employees. Uber drivers for instance enjoy no benefits for the work they perform and barely get any minimum wage. Cases of sexual harassment are also common as the company has failed to create an ideal working environment for its employees.

            A good example of how Uber disregards the rights and freedoms of its employee is evident in the company’s decision to release 14 percent of its workforce without giving proper notice. The decision means that over 3,700 people will lose their jobs and roughly 180 driver service centres located in different locations where the company operates (Chapman, 2020). Due to the company’s large market share, the decision to release employees is likely to affect people from different parts of the world especially people working in the recruitment and support departments. The decision also means that 40 percent of the 450 driver centres from different of the world will also be forced to shut down, leaving its employees jobless.

            The strained relationships that the company has with its employees is greatly as a result of the structural framework that the company bases its operations on. The organization operates on a task-oriented approach where more focus is placed on achieving the objectives set rather than the processes involved (Bolman & Deal, 2013). The structural framework for any organization addresses issues related to setting goals and ensuring they are measurable and achievable; determining what procedures to be used and also identifying and clarifying tasks. The decision to release its employees for instance was a strategic approach aimed at helping the business cope with the challenges brought about by the Covid-19 pandemic (Chapman, 2020). While the decision would favour the organization, it fails to take account of the negative impact that the decision will have on the employees that lose their jobs especially during a crisis.

            Uber’s strained relationship with its employees is mainly due to the company’s failure to address its employees ‘needs and also the desire to increase profits even at the employee’s expense. The company strategy is based on the assumption that its employees are independent contractors mainly because the employees are responsible for setting up their own work schedules (Larcker & Tayan, 2018). This is especially because uber employees such as drivers are free to decide where to work from, what time to operate and even choose whether to work depending on their schedule. Although the company gives a lot of control to employees in determining how to go about meeting its objectives, Uber still has a responsibility to ensure that the needs of the people working to meet its objectives are met. Since the freedom that employees like drivers enjoy were part of the contract signed during employee recruitment, they should not be used as tools to oppress the employees.

            The decision to treat employees as contractors rather than employees puts employees at a disadvantage as it denies them the rights and protection offered to employees by the government. Different organizations have to adjust to the political environment they base operations and this often involves abiding to the laws and policies that are issued to help create a fair and safe working environment (Isaac, 2019). The policies and protection are however reserved for employees and not other relationships such as those between an employer and a contractor. Concerning Uber, the decision to treat employees as contractors is used to exploit employees and make decisions that only favour the company. The decision to release 14 percent of its workforce for example would not have been possible as the government protects employees from such actions from an employer (Feiner, 2020). Although the law may differ depending on the country an organization operates in, most regions require employers to give employees some form of notification prior to terminating their contract. The provision is put in play to ensure that organizations maintain their responsibility to look after the employee’s interest and also to prevent hasty terminations.

            Since uber regards its employees as independent contractors it was possible to release employees without prior notice or giving them ample time to prepare for the change. Although the government protects people’s rights from being violated by their employers, its ability to look ensure that all rights are protected is limited by the existence of job titles that do not necessarily warrant the protection required (Scholz, 2017). Since Uber regards employees as contractors, the decision to release them without adequate notice is possible as it does not breach any policy agreed upon by the government or the employees. Regardless of the terms used to define people working for uber, the company should also take into account the fact that its operations are not based solely on ensuring that activities engaged in are legal. The organization has an obligation to engage in ethical conduct and ensure that employee’s needs are fulfilled as this makes it easier for them to carry out their duties.  

The problems the company faces are also as a result of how the company goes about hiring employees. Human resource plays two major roles for an organization. On the one hand, human resource addresses the needs of the organization by hiring the right people for the job (Bolman & Deal, 2013). Through it, an organization is able to recruit qualified individuals with the skills and knowledge needed to ensure that the set objectives are met within the time frame provided. The second role that human resource play in an organization has to do with the employee’s need and ensuring that they are met in the course of fulfilling the organizational objectives (Feiner, 2020). This includes creating a safe working environment and also offering job security.  Good human resource management should therefore ensure that the needs of the employees are attended to with the same commitment as the approaches taken to ensure that the customer needs are met. Concerning Uber however, most of the emphasis is towards ensuring that the company has the right manpower to keep up with the increasing demand for uber services. The human resources approach employed at uber overly focus on the customer and often place the employees at a disadvantage.

The strained relationship that exists between uber and its employees has created a strenuous environment that makes it difficult for the employees to perform their duty and this greatly discourages innovation. Employees at uber, especially uber drivers, are not paid a minimum wage and also do not get compensation for working overtime (Abril et al, 2018). The company also denies its employees health insurance covers or regularly scheduled breaks. The human resource management approach fails to factor in the importance of aligning organizational interests with those of its employees. Its main focus is towards ensuring that the objectives set are met, regardless of the impact that accomplishing it will have on the employees.

            The decision to regard employees as contractors has pushed Uber to seek out loopholes in its political environment especially when conforming to the laws and regulations the company is expected to follow (Brenton & Driskil, 2005). A businesses political frame is meant to assist in resolving problems encountered by individual employees or the organization in general. The political framework acts as a guideline that helps the organization to determine how to go about resolving conflicts and adjusting to a crisis without affecting its interests or those of its employees. Concerning uber however, processes employed try to seek out ways to promote growth and remain operational, sometimes at the employees’ expense.

When responding to the Covid-19 crisis for instance, the political framework should have helped uber to design a strategy that helps the company cope with the changes brought about by the pandemic without greatly inconveniencing its employees (Chapman, 2020). The approach taken however focused more towards protecting the interest of the company with little concern over the impact the action taken would have on the employees. On the one hand, releasing 14 percent of the workforce meant lesser expenses in form of salaries and other modes of compensation that the company pays its employees. The Covid-19 pandemic has greatly affected business for companies like uber that rely on people’s tendency to move from one place to another (Chapman, 2020). With majority of its customers remaining indoors due to the pandemic, there is little demand for uber services and this makes it difficult to sustain the same workforce with lesser income. There is however the issue of company responsibility where actions taken by an organization should also factor in the impact that they will have on the employees. Firing people, regardless of the positive outcome for the business, should be carried out in such a way that allows the individual to prepare for the change. Uber however failed to give its employees notice and this greatly puts them at a disadvantage.

The issue of uber placing its interest over those of its employees is however a common occurrence which only goes to show the extent of the problem. In Paris for instance, the court of appeal ruled in favour of an uber driver who had filed a lawsuit against the company (Passy, 2019). The case was against the company after it failed to protect the employee’s interests on the grounds that the individual was a contractor and not an employee. The ruling however argued that the driver had signed a work contract with the company and therefore qualified as an employee. In the U.K the court made a ruling to ensure that uber drivers are referred to as workers rather than contractors. The different definition would force the company to recognise its workers and offer them the same benefits and protection offered to employees.

There are occurrences however where the political environment favours Uber despite the disadvantages such a framework would have on employees. In the United States for example, it was ruled in a court of law that uber employees are actually contractors and not employees and should therefore not ask for the same protection offered to employees by the federal law (Passy, 2019). Furthermore, the ruling agreed with Uber’s approach of not acknowledging its members of staff as employees which allows the company to distance itself further from duties and practices meant to protect the employees from being exploited. As a result, the organization operates as a go between for drivers and their customers. The definition places employees as customers rather than workers as they only use Uber to reach customers (Horan, 2019). Although the definition fails to take into account the complicated nature of the relationship between uber and its employees, the decision made by the United States government makes it easier for the desired change to be achieved.

Solution

            Any attempt to resolve the strained relationship between Uber and its employees must take into account the symbolic frame and the impact that employees’ personal goals and objectives have on how they go about performing their duties. The framework discusses the importance of inspiring employees and encouraging them to work together towards a common goal. The approach uber takes when addressing employee needs places its interest over those of its employees. This creates an environment where employees do not feel as part of the organization but rather a means to an end. Such an environment creates a lot of challenges for all parties involved. On the side of employees, there is little motivation and desire to go beyond one’s assigned duties. There is little innovation as people only commit what is necessary to perform the task at hand.

            In order to resolve the issue, the company should assess its corporate policy against rider; the elephant; and the path model. The approach is ideal as it would help the company to identify the problem, issues that make it difficult to bring about the desired change and also what path to take to ensure that the positive changes achieved are sustainable (Smith, 2020). The first aspect of the model is the rider which addresses Uber’s conscious thought that triggers the desire to improve relationships with its employees. The rider acts as the plan forming stage where the company can identify the problem and come up with possible solutions (Smith, 2020). At this stage, the organization can focus its attention towards improving communication so as to get constructive feedback on what issues cause problems so as to come up with a plan that addresses the needs of all parties involved.

            Once the goal is set, the process can move to the elephant phase which deals with issues related to emotions and decision making. Uber, like the elephant, is a big company that has remained operational despite the various complains from the employees, customers and other organization (Smith, 2020). The approach currently employed by the company is as a result of its primal instinct which makes it difficult to work on the ideas identified in the rider stage of the framework. Concerning Uber, the company has already identified that there is a major problem regarding how it treats its employees. Although various attempts have been made to remedy the situation, the company keeps reverting to its previous corporate culture despite the challenges it creates.

            Lastly, the path pushes the company to not only make plans, but implement them in a way that will bring about the desired results. Since uber has already identified the problem, the elephant stage is the reason behind the existence of more conflict between the company and its employees. It is therefore crucial that Uber change its approach and move from the elephant stage to the implementation stage and implement the changes aimed at improving the relationship between the company and its employees. Since the main problem has to do with the company treating the employees as contractors, the process could help bring about change and create an environment where the company is just as invested in ensuring employee needs are met as it does with its customers.

 

 

 

 

 

References

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Bolman, L. G., & Deal, T. E. (2013). Reframing organizations: Artistry, choice, and         leadership. San Francisco, Jossey Bass

Chapman L, (2020) “Uber is reducing workforce by 14% and signals more cuts to come” Bloomberg, retrieved from, https://www.bloomberg.com/news/articles/2020-05-            06/uber-is-reducing-workforce-by-14-and-signals-more-cuts-to-come

Driskill, G. W., & Brenton, A. L. (2005). Organizational culture in action: A cultural       analysis workbook. Thousand Oaks: Sage Publications.

Feiner L, (2020) “Uber to lay of 3700 employees , about 14% of workforce” CNBC, retrieved      from, https://www.cnbc.com/2020/05/06/uber-to-lay-off-3700-employees-about- 14percent-of-workforce.html

HHoran H, (2019) “Uber’s path of destruction” American Affairs, retrieved from,             https://americanaffairsjournal.org/2019/05/ubers-path-of-destruction/

Isaac M, (2019) “How Uber got lost” The New York Times, retrieved from,             https://americanaffairsjournal.org/2019/05/ubers-path-of-destruction/

Isaac, M. (2019). Super pumped: The battle for Uber. Norton & Company Inc.

Larcker D and Tayan B, “Governance gone wild: Misbehaviour at uber technologies”       Harvard Law School Forum on Corporate Governance, retrieved from,             https://corpgov.law.harvard.edu/2018/01/20/governance-gone-wild-misbehavior-at-           uber-technologies/

Passy J, (2019) “Uber doesn’t want its drivers to be employees: Here’s why that matters” Market Watch, retrieved from, https://www.marketwatch.com/story/uber-doesnt-   want-its-drivers-to-be-employees-heres-why-that-matters-2017-11-13

Smith D, (2020) “The rider, the elephant and the path: Understanding the process of change         for health and fitness” Absolute, retrieved from,            https://absolutehealthperformance.com.au/understanding-process-change-health-            fitness/