2015
MGMT 5260 – Final Project
Project Report

Ha Luu Nguyen

213651096

Nidhi Joshi

213678271

Nomita Chennamraju

213862529

Raghvendra Bagla

213678560

Srini Venkatachalam

213678453

MGMT 5260 – Final Project
Contents
EXECUTIVE SUMMARY ................................................................................................... Error! Bookmark not defined.
APPENDIX – 1 – BUSINESS MODEL OF UBER ................................................................................................................ 6
Purpose and scope.................................................................................................................................................... 6
Methodology and sources of information ................................................................................................................ 6
Highlights of findings and implications for value creation. ...................................................................................... 6
APPENDIX – 2 – VALUE CREATION CYCLE OF UBER ...................................................................................................... 7
Purpose and scope.................................................................................................................................................... 7
Methodology and sources of information ................................................................................................................ 7
Highlights of findings and implications for value creation. ...................................................................................... 7
APPENDIX – 3 – VALUE CREATION SWOT ..................................................................................................................... 9
Purpose and scope.................................................................................................................................................... 9
Methodology and sources of information ................................................................................................................ 9
Highlights of findings and implications for value creation. ...................................................................................... 9
APPENDIX – 4 – TRIPLE BOTTOM LINE ANALYSIS FOR UBER ...................................................................................... 10
Purpose and scope.................................................................................................................................................. 10
Methodology and sources of information .............................................................................................................. 10
Highlights of findings and implications for value creation. .................................................................................... 10
APPENDIX – 5– EXCHANGE ......................................................................................................................................... 11
Purpose and scope.................................................................................................................................................. 11
Methodology and sources of information .............................................................................................................. 11
Highlights of findings and implications for value creation. .................................................................................... 11
APPENDIX 6- USE VALUE ............................................................................................................................................. 12
Purpose and scope.................................................................................................................................................. 12
Methodology and sources of information .............................................................................................................. 12
Highlights of findings and implications for value creation. .................................................................................... 12
APPENDIX 7- VALUE MAP OF STAKEHOLDERS ............................................................................................................ 13
Purpose and scope.................................................................................................................................................. 13
Methodology and sources of information .............................................................................................................. 13
Highlights of findings and implications for value creation. .................................................................................... 13
APPENDIX – 8– ANALYZING THE RISKS FOR UBER ...................................................................................................... 14
Purpose and scope.................................................................................................................................................. 14
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Methodology and sources of information .............................................................................................................. 14
Highlights of findings and implications for value creation. .................................................................................... 14
REFERENCES ................................................................................................................................................................ 16
APPENDIX – 9– STAKEHOLDER ANALYSIS ................................................................................................................... 17
APPENDIX 10: THE 5 WHY ANALYSIS ......................................................................................................................... 23
APPENDIX 11: LEVEL 3 LEADERSHIP ........................................................................................................................... 27
APPENDIX 12: The PARTS model ................................................................................................................................ 28

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EXECUTIVE SUMMARY
I.

Problem Statement
Uber is facing challenges across jurisdictions as it has disrupted the traditional taxi model by providing an efficient platform for the public to co-create a transportation system that is ‘fast’, ‘reliable’ and ‘affordable’. While Uber is embroiled in multiple issues, the most pressing issue is the perceived threat to ‘personal safety’ of the passengers in the current operational model of Uber. Recent incidents of crimes by Uber Drivers against passengers have resulted in Uber’s operation being banned in many jurisdictions and has also led to closer scrutiny of its internal processes. The other ancillary issues relate to government’s dilemma on where to fit Uber in the existing regulatory framework or what new framework to create to regulate the business of ride sharing companies such as
Uber. Some of the Uber’s stakeholders are leveraging this regulatory uncertainty to obtain injunction against Uber, compelling Uber to close operations in certain cities.

II.

Value Analysis :
After doing a Value analysis on Uber, we found that Uber is ‘co-creating value’ along with
‘riders’ and ‘partner drivers’ for a broad range of stakeholders- riders, partner drivers, city transport agencies, environment, investors, and employees. Riders pay less fare, have access to the fastest route, face shorter waiting period and are safer when compared to the traditional taxis. The partner drivers augment their income and in some cases make a living through Uber. The city transport agencies benefit due to reduced demand on the public transportation, reduced traffic due to utilization of existing vehicles on the road.
Environment is a gainer too as the emissions decrease with the decrease in number of cars on the roads. Investors and employees benefit just as in case any other successful business model. Uber Captures value by charging 20% of the fare as its fee and also uses the feedbacks from the riders to ensure the integrity of the model. However, due to crimes done by some Uber Drivers against the riders, the value co-created by Uber is getting destroyed. Being the technological interface between the riders and drivers, Uber

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MGMT 5260 – Final Project has to act to prevent value destruction and ensure safety does not mar it’s reputation and operations in the short and long haul.
III.

Stakeholders Analysis
We found that ‘government’, ‘riders’ and ‘drivers’ are the most important stakeholders in the current scenario; ‘Government’ because it has the power, legitimacy and also urgency to ensure that Uber’s operations do not endanger public health and safety, ‘riders’ because as consumer of the services and as subject of the safety violations and driver because as providers of services and as subject of penalties and added scrutiny, have both legitimacy and urgency in situation. Taxi service industry is another important stakeholder as it is suffering financial losses due to Uber’s operation. So far Uber has mostly been at logger heads with the government, openly threatening to flout the directives of the government, creating a hostile environment for itself and giving an opportunity to the
Taxi companies to arm twist Uber through the Government.

IV.

Recommendations
 Review internal process and create robust system for background checks of the Partner
Driver, involving third party agencies for checks and audit


Set up a dedicated safety cell, with a trained response team and 24/7 safety helpline for the customers



“one touch safety” feature on the Uber application to enable riders to send distress signals to uber safety cell, uber drivers in the vicinity and police



Mask the identity of riders while passing information to the drivers so that they can give candid feedback about the drivers without fear of any harm being inflicted on them as a result of the feedback.



Conduct a media campaign to demonstrate the safety features in Uber’s Services



Collaborate with other ride sharing companies and Governments to facilitate enactment of clear legal frameworks for ride sharing companies encompassing issues such as licenses and permits, insurance and taxation.

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APPENDIX – 1 – BUSINESS MODEL OF UBER
Purpose and scope

This appendix was a method to map out the business model of the company – Uber.
Methodology and sources of information

The Business Canvas is an accepted tool used to map out a business model of a company and the main source of information has been news articles regarding the high valuation of the company.
Highlights of findings and implications for value creation.

This map gives the complete picture of how the business is run – tracing the value creation right from the partners till the customers. This also lists the distributions channels and other operational aspects that are necessary for the business to function. This map gives us a good idea of the areas that will be impacted due to any recommendation we give.

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APPENDIX – 2 – VALUE CREATION CYCLE OF UBER
Purpose and scope

This appendix lists the formal value creation cycle for Uber. The details of the value impact are mentioned in orange boxes alongside the main headings.
Methodology and sources of information

We used the methodology taught in class to map out the value creation cycle.
Highlights of findings and implications for value creation.

We found that Uber’s business model is already almost at the ‘Shared Value Creation’ end of the spectrum. This is because it creates value out of existing transportation infrastructure for both its partner drivers and also the customers. The drivers get extra money from the driving that they already do in their car. The customers get better service for a cheaper cost. We have also found that this method is safer than the traditional taxi service as there is complete traceability with regard to every transaction
– both from the driver side as well as the customer side. So, the only stakeholders who are losing value due to Uber are the Taxi Cartels and governments that were fleecing their denizens.
But despite these good points, there is a lot of ‘Value Slippage’ due to bad publicity for Uber around the world. Every crime on board an Uber ride get publicity while the fact that these incidents are rarer than similar ones in normal taxi cabs is disregarded. Uber is also doing a bad job in terms of controlling its reputation. Customers have complained about how there is no one number to contact Uber in order to get their grievances redressed.
Hence, this is a company that has started with ‘Creating Shared Value’ and then is trying to fix the Value
Slippage holes. This is the price to be paid by First Movers who end up disrupting the traditional business model in any industry.

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Integrate Taxi Drivers into the business model and give them a bigger share of business - Connecting spare capacity of private drivers with customers who want rides

Engage better with Governments and prove how Uber is solving problems of inefficiency, cartelization and traffic in cities. - Give customers better, quicker, cheaper & more convenient taxi service.

SHARED
VALUE

VALUE
CREATION

VALUE
CAPTURE

20 % share of revenues from drivers
Investment from
Venture Capitalists

ISOLATION
MECHANISMS

Monitoring drivers to ensure they follow rules
Better communication with all stakeholders to manage reputation
Maintain the lead as the biggest operator in the market to retain partners & customers
Create a big enough war chest of money to wage price wars with competition if necessary

VALUE
SLIPPAGE

Drivers poach customers by direct contact – without app
Customers might not pay through credit card fraud
Drivers & Customers commit crimes on one another, causing reputational loss
The business model can be easily imitated by competition like Lyft.

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APPENDIX – 3 – VALUE CREATION SWOT
Purpose and scope
We did a SWOT Analysis for the main aspects of Value Creation & Value Capture for Uber so that we can identify the possible strengths, weaknesses, threats and opportunities in the business model across all stages of the value chain.
Methodology and sources of information
The methodology used was standard brain storming within the team to come up with all the aspects of the business. We have mainly focussed on Value Creation and Value Capture aspects.
Highlights of findings and implications for value creation.

We used this model to single out the main threat out of all listed threats so that we could consider that as the core issue that we would aim to address in our presentation to help mitigate the threat. But it needs to be stressed that the threats have only been comprehensively listed. The actual significance & impact of each threat have not been analysed here. That is done in another appendix down this document. VALUE
CHAIN

STRENGTHS

WEAKNESSES

OPPORTUNITIES

- All direct partners benefit financially VALUE
- Two way ratings help in
CREATION measuring customer & partner satisfaction - Regulations might not support this model
- Insurance coverage is not comprehensive -

- Huge scope for business growth both from drivers and customers perspectives
- As company gets more and more publicity, the customer base will keep on increasing
- The amount of untapped markets is huge

- All financial transactions done through credi cards & traditional Banking Channels
- Surge Pricing to leverage
VALUE supply & demand economic
CAPTURE indicators
- Electronic control on all aspects of transaction helps more measurability & efficiency - No direct monitoring of driver-customer interaction.
Hence, no control over nonapp transations.
- Financial Institutions have higher power
- Interruptions in cash flow is possible in case of conflicts that can be dangerous
- Lost opportunities in developing countries that might not have banking infrastrcture

- High use of technology means efficiency can be improved for low cost
- As developing countries move towards high cost travel, the business could open up quite a lot.
- Partnerships with businesses to provide their taxi needs for a lower cost
- Banking is changing into high technology firms.

THREATS
- Disgruhntled taxi drivers could create problems
- Drivers might not be up to expected standards
- Customer safety might be put at risk due to rash driving
- Customer safety could be impacted due to criminal acts by drivers

- Credit Card Fraud is a big threat - New competitors could come up with mobile payments that could take away market share from Uber.

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APPENDIX – 4 – TRIPLE BOTTOM LINE ANALYSIS FOR UBER
Purpose and scope
We also had a good look at the business model of Uber to see how it was impacting the three pillars on which a business stands – the Triple Bottom Line that gives the business it’s Social Licence to Operate.
Methodology and sources of information
We used simple brain storming among the team to come up with the impacts.
Highlights of findings and implications for value creation.

We have listed both the advantages as well as the disadvantages for each heading so that we can look at the total impact of the company on this world across all the three ends of the business spectrum.

PEOPLE

PLANET

PROFIT

Customers get better service for lower cost

Lower emissions of GHG due to better efficiency in usage of cars

High profits leveraging very low capital assets

Customers get more choice

Lower Public Transportation costs since taking taxi's has become easy and cheap

Competitive advantage is based on technical capability rather than assets Drivers get opportunity to earn money from capacity that is currently going waste

Lower accidents and emissions due to reduction in overall traffic

This business reduces profit for existing traditional companies like taxi aggregators

Based on the sharing based economy that is the current trend

Resource sharing reduces impact on environment Governments are worried about a loss in taxi tax revenues if private drivers don’t pay tax on earnings

Tendency for Resource sharing increases among both drivers and customers Page 10

MGMT 5260 – Final Project
APPENDIX – 5– EXCHANGE
Purpose and scope
Exchange value is the value for which a product/commodity can be sold in exchange for use value of the product. Methodology and sources of information
The main sources of information was the articles about Uber found on the internet.
Highlights of findings and implications for value creation.

Consumers pay for Uber services as taxi charges for getting a ride to the desired destination. The charges are directly connected to the credit card of the user and are dependent on combination of time and distance of the vehicle. There is a base fare also those changes based on the locations and also based on the current Demand-Supply scenario. This is arguably the best type of pricing available for this sort of a service available anywhere in the world. The traditional metered taxi services do not give this sort of flexibility. Hence, the exchange value is usually an amount that is beneficial to both the driver as well as the customer.

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APPENDIX 6- USE VALUE
Purpose and scope
Use value is the value that is created for a stakeholder when a product/service has been used.
Methodology and sources of information
The main sources of information was the articles about Uber found on the internet.
Highlights of findings and implications for value creation.

Uber services is a producer of Ride share services, employment, reduction in traffic, data collection. The usage of these services depends on the stakeholders as shown below. This diagram only shows the use value to stakeholders that directly use this service. A larger picture of all the impacted stakeholders will be explained as a part of the Stakeholder Analysis section of this report.

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APPENDIX 7- VALUE MAP OF STAKEHOLDERS
Purpose and scope
Value map shows the exchange value that is taking place amongst all the stake holders.
Methodology and sources of information
The main sources of information were the articles about Uber found on the internet.
Highlights of findings and implications for value creation.

The below chart discusses the opportunity presented as a shared value for each of the stake holders with the improvement in security.

OPPORTUNITY

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APPENDIX – 8– ANALYZING THE RISKS FOR UBER
Purpose and scope
We did a mapping of all risks we could analyze for Uber’s business model – across financial, social & operational. Methodology and sources of information

The methodology followed is the standard Risk Analysis method taught in Project Management.
We estimated the probability of occurrence and also the impact due to the risk on a 10 point scale.
Then, we multiplied these probability & impact scores to get a Risk Value with a base of 100. This risk value enables us to compare all the risks at par and figure out the one with highest overall impact. This is the one we need to focus on.
Highlights of findings and implications for value creation.

Based on these calculations, we think that ‘Customer Safety’ is the highest impact risk that has a high probability of occurring as well as can cause impact to the company’s reputation and customer retention. This is also an area where the company can take a lot of risk mitigation actions.
RISK
Safety issue to Passengers from drivers
Safety issue to Drivers from Passengers
Cars have accidents and cause Insurance problems
Regulations in city prevent Uber from operating
Out of work Taxi Drivers create disruptions in service
Competition will book & cancel fares just to cause losses
Investigators will find something that creates a case against
Uber
Banks will stop supporting / partnering with Uber
Investors lose trust in Uber & Uber runs out of money
Both customers & drivers migrate from Uber to competition

PROBABILIT
Y
8
7
8
5
6
9

IMPACT
10
7
7.5
9
5
5

RISK
VALUE
80
49
60
45
30
45

6
4
5
3

10
8
10
9

60
32
50
27

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UBER - RISK VALUE CONTROL CHART

Safety issue to 80
Passengers from drivers Both cuestomers & drivers migrate from Uber to competition Safety issue to Drivers from
Passengers
49

Investors lose trust in Uber &
Uber runs out of money

27
60

50

32

45

Banks will stop supporting / partnering with Uber

Cars have accidents and cause
Insurance problems

Regulations in city prevent Uber from operating

30

Investigators will find something 60 that creates a case against Uber

45

Out of work Taxi Drivers create disruptions in service

Competition will book & cancel fares just to cause losses

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REFERENCES

http://www.forbes.com/sites/aswathdamodaran/2014/06/10/a-disruptive-cab-ride-to-riches-the-uberpayoff/ http://www.theglobeandmail.com/news/toronto/uber-poses-real-and-urgent-safety-problems-warnstoronto-investigation/article21807900/ http://techcrunch.com/2013/03/17/uber-lyft-sidecar-and-the-so-called-safety-problem/ http://www.thedailybeast.com/articles/2014/03/28/uber-s-biggest-problem-isn-t-surge-pricing-what-ifit-ssexual-harassment-by-drivers.html http://www.theglobeandmail.com/news/toronto/uber-claims-increased-security-checks-higher-safetystandards-than-city-of-toronto/article22599640/ http://www.washingtonpost.com/news/morning-mix/wp/2015/04/03/college-student-reports-uberdriver-demanded-money-or-a-sex-act/?tid=sm_fb http://www.washingtonpost.com/news/morning-mix/wp/2015/04/01/uber-driver-arrested-afterbreaking-into-a-passengers-home-police-say/

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APPENDIX – 9– STAKEHOLDER ANALYSIS
Purpose and scope
After identification of the problem around the value creation and capture model for Uber, the next logical step is to understand the stakeholders, their ‘stakes’, ‘relative power position’ and
‘attributes’ and the opportunities and challenges in managing each of the stakeholders. The purpose of stakeholder analysis is to get a 360° perspective on the stakes or competing claims in the situation and develop a holistic strategy to manage the stakeholders and propose an effective solution to the problem identified.
Methodology and sources of information
Following tools were used to do the Stakeholder Analysis:
a. Identification of the Stakeholders
b. Stakes of the Stakeholders
c. Typology Model tool
d. Diagnostic Typology tool
Sources
a.
b.
c.
d.

e.
f.

g.

Prof Chris Irwin; Class Presentation : Week Four Slides
Kevin Rector, Fight over fate of Uber in Maryland heating up; http://www.baltimoresun.com/business/bs-bz-uber-future-20150228-story.html#page=1 Social Capital: The Secret behind Airbnb and Uber ; http://bradycap.com/social-capitalthe-secret-behind-airbnb-and-uber/
Mark Boeckel, Brent Sprunger, Kevin Smith, and Emily Work; Uber: How a technology
Company is changing the traditional transportation Model, Kellog School of Management; https://www.google.ca/?gfe_rd=cr&ei=SmMiVb-mNYBpgXssIDwBg&gws_rd=ssl#q=stakeholders+of+uber Arjun Kharpal ; Sidney to Paris, Uber’s 5 Biggest issues right now; http://www.cnbc.com/id/102268278 The Canadian Press (April 05, 2015); Uber Keeps driving on in Canada, despite opposition from Cities; http://www.cbc.ca/news/canada/toronto/uber-keeps-driving-on-in-canadadespite-opposition-from-cities-1.3021764
Inside
Toronto
Cabbies
battle to beat
Uber
(dec
15,
2014); http://metronews.ca/news/toronto/1238329/inside-toronto-cabbies-battle-to-beatuber/ Page 17

MGMT 5260 – Final Project
h.

The Huffington Post, Canada (March 11, 2015); Beck Taxi, Toronto Cab Company, Aims To
Be Like Uber ‘But More Legal', http://www.huffingtonpost.ca/2015/03/11/beck-taxi-appuber-toronto_n_6847552.html

Highlights of findings and implications for value creation
 The Primary stakeholders of Uber are: Government, Riders, Uber Drivers and Traditional taxi Service industry. Within the Government, a myriad of agencies have direct interest in the operations of Uber. The details of subcategories are in the appendix attached


The secondary stakeholders of Uber are: Employees, Investors, other ride sharing companies 

‘Government’ is the most powerful, legitimate and urgent stakeholders in the situation due to its multiple function of promoting economy and competition in the market and also of ensuring safety, health and privacy of the citizens.



‘Riders’ and ‘Partner Drivers’ are co-creating value, along with Uber and have immediate and direct interest in the situation. These two stake holders have legitimacy, urgency but lack the coercive power to dictate terms to Uber.



Traditional Taxi Service industry is getting badly affected due to the operations of uber and has used every possible tactic available to ensure that Uber does not operate or is forced to adopt the same model as theirs and kill its competitive advantage. From filing litigation and obtaining injunction from the Courts to lobbying with the Government, Taxi
Unions have done enough to sabotage Ubers’s operations. Taxi service industry is antagonistic and unsupportive of Uber and no change in this attitude is likely in the near future. 

Stakeholders Management Strategy: The attitude of different wings within the government is sort of mixed from being supportive to being wary of Uber’s processes and inner workings. However, by and large, Governments are striving to strike a balance between Uber’s and Consumer’s interest on one hand and the Taxi industry’s concerns on the other hand. There is an enormous opportunity for Uber to collaborate with the government in working out a win-win situation by holding discussions rather than taking a hostile stand as it has been doing in the past. Riders and drivers are supportive of Uber operations but have legitimate concerns about safety and privacy, which can be
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MGMT 5260 – Final Project addressed by involving the two stakeholders while making improvements in the existing systems. Uber should collaborate with other ride sharing companies and Governments to facilitate enactment of clear legal frameworks for ride sharing companies encompassing issues such as licenses and permits, insurance and taxation. At the moment, with uncertainty around the regulatory frameworks for the ridesharing company, there is not much room for negotiation between the Uber and Taxi companies and the best strategy at the moment for Uber is to defend its position with respect to this stakeholder.

Stakeholders Identification

Revenue
Authority

Taxi Unions

Taxi
Commission

Small Taxi owners Cab
Aggregators

City Transport
Commission

Legislators

Government

Conventional
Taxi Industry

Investors

Employees

Uber
Competitors
(Lyft, sidecar)
Riders
Partner Drivers

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The Stakeholders most proximate to Uber are the main stakeholders and those farther away (in mauve) are Subcategories of the main stakeholders. ‘Government’, ‘Riders’ and ‘Uber Partner Drivers’ are the primary stakeholders in this situation. ‘Conventional Taxi Industry’, ‘Investors’, ‘Competitors’,
‘employees’ are the secondary stakeholders. The segregation into primary and second stakeholders is based on the immediacy and influence of the stakeholders on the current issues confronting Uber.

Interests and Concerns of the Stakeholders
Stakeholder
Government

Conventional Taxi
Industry

Concerns and Interests
 Health, Safety and Privacy of the citizens
 Levy tax on the commercial transaction
 Keep control on the Prices of the public transportation-In context of surge pricing followed by ride sharing companies
 Maintaining a level playing field in an industry while promoting innovation and interests of the consumers
 Ensure that the public transportation meets the needs of the commuters 




Riders





Uber Partner Drivers




Financial loss due to Uber’s operations
Stop the operation on the ridesharing companies
Push for the same standards for the ride sharing companies as it is subject to
Modify its operational model to compete with that of Uber



Access to reliable, fast and affordable transportation
Personal safety, health and privacy
Predictable pricing- Dynamic pricing followed by Uber has been questioned by many riders across different cities
Income Generation
Protection against legal prosecution on account of uncertain requirements of driving license and permits required for operation
Health and personal Safety-The 15 sec window of the Uber App to accept the passenger poses safety risks for the drivers
High Commission charged by Uber-20%

Investors



Get good returns on the investment

Employees



The Operation of Uber should continue and also expand so that they have employment and also gain from its growth



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MGMT 5260 – Final Project



Competitors (other ride sharing companies) 

To get a larger share of the ride sharing market
To keep a tab on the how the government are reacting to the Uber’s issues and modify their strategy
To collobrate with Uber to push through a favourable regulatory regime for the ride sharing companies

Stakeholder Attributes
Power
Legitimacy
Urgency
Proximity

Government
Government, Riders, Driver Partners, investors, employees
Government, Riders, Driver
Taxi Service Industry, competitors

Typology of Stakeholders

Powers

Legitimacy

Dormant
Investors

Dangerous

Dominant

Definitive
Government
Dependent
Riders, Drivers

Demanding

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Diagnostic Typology of the Stakeholders

High

Low

Mixed Blessing
Government, Competitors (Ride
Sharing Companies)
(Collaborate)

Riders, Driver Partners
(Involve)

Non Supportive

High

Supportive

Marginal
(None)
(Monitor)

Stakeholders
Potential for
Cooperation
with Uber

Low
Taxi Service Industry
(Defend)

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APPENDIX 10: THE 5 WHY ANALYSIS
PURPOSE:
The purpose of this appendix is to find out the real reason why Uber service is perceived as unsafe, both by the government and the customers. By understanding this, we hope to find out the right problem before attempting to find the solutions.
SOURCE & METHODOLOGY:
Sources:
MGMT5150 – Skills for Leadership: Analytic Thinking
Cardenas, P (December 17, 2014). Our commitment to safety, Uber blog. Retrieved from http://blog.uber.com/safety Keller, J (January 09, 2015), Uber seeks to have lawsuit filed by Vancouver taxi companies thrown out,
Yahoo News Canada, Retrieved from https://ca.news.yahoo.com/uber-seeks-lawsuit-filed-vancouvertaxi-companies-thrown-231123959.html
Hui, A. (2014, November 27). Inside Toronto's Uber investigation. Retrieved February 26, 2014, from http://www.theglobeandmail.com/news/toronto/uber-poses-real-and-urgent-safety-problems-warnstoronto-investigation/article21807900/ Methodology:
Keep asking “Why” until the core problem appears.
HIGHLIGHTS & IMPLICATIONS:
The “5 Why” technique highlights that the main reason that Uber is perceived as unsafe, compared with traditional taxi services is that Uber does not comply with the current safety standards and regulations of the taxi industry.
However, from Uber’s perspective, the standards used by taxi industry are already out of date. Uber’s reason for not complying with regulations is not to gain an unfair competitive advantage over traditional taxis, but because Uber does not consider those regulations adding value to its business.

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From these two conflicting points of view, we challenge the assumptions that “Compared to the traditional taxi services, Uber is unsafe” and “failure to comply with safety standards and regulations of the taxi industry made Uber unsafe for customers”.
Our finding highlights that Uber has many features that actually make it safer than the traditional taxi services. Therefore, there is a misperception about the safety issues of Uber.
Our recommendations are aimed at changing the Tactics (the T part in the PARTS model) to improve public confidence of using Uber services.
Why is Uber services perceived as unsafe, compared with traditional taxi services?

Answer: Because there Is negative media coverage about “real and urgent” safety problems with Uber. The company also faces protests from local governments and regulators.
Example: “Inside Toronto's Uber investigation” - The Globe and Mail 27/11/2014
“Uber’s biggest problem isn’t surge pricing. What if it is sexual harassment by drivers?” – The Daily Beast
28/03/2014
Question: Why are there so many criticisms about Uber services? What are the rationales behind the arguments? But hold on, the penalties are severe. Why are they willing to accept the risk?
Answer: The argument is that Uber is gaining an unfair competitive advantage by ignoring the taxi regulations to save money. Uber has not sought taxi licenses for its drivers. The company is competing on costs by noncompliance with safety standards of the taxi industry (Keller 2015). Therefore, compared with the traditional taxi service, Uber is unsafe. This is further demonstrated by customers’ complains about sexual harassment by Uber drivers. Investigations by the government also pointed out a lot of problems about insurance coverage and vehicle inspection (Hui 2014).
Question: Why doesn’t Uber comply with the taxi regulations?

Answer: Because Uber is a technology company, not a taxi service. Therefore, it should not be forced to comply with the regulations of the taxi industry (Uber representative, cited in Keller 2015).
Question: But if failure to comply with regulations did result in accidents that damage the company’s reputations, as well as oppositions that may force the company to stop operation, why does the company still choose to do so? Page 24

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Answer: Because Uber believes that the current taxi regulations are “outdated and hurt consumers” (Uber representative, cited in Keller 2015).

Started from Uber’s statement that “The current taxi regulations are outdated and hurt consumers”, we challenge the assumption that “Compared to the traditional taxi services, Uber is unsafe” and reframe the question to “Is it true that Uber is unsafe because it does not comply with the current regulations? Is failure to comply with regulations the main reason that led to accidents such as the rape scandal in New
Delhi, India?”
To begin with, Uber’s practice has many advantages that actually protect customers and drivers better than the traditional taxi industry.
Uber
Driver’s profile is made available to customers. Before going into an Uber taxi, customers know in advance who their driver is. Driver’s name, license plate number, photo, and rating are given to customers once their request is confirmed.

Traditional taxis
No information about the taxi driver until customer actually gets into the taxi.

Record

There is a record of every trip that customers take with Uber

Transactions

All transactions with Uber are cashless.
Fees are automatically charged to the customers’ credit card.
There is no random pick up. Rides must be requested through the Uber apps.

There is no record available for customers, make it difficult for customers in case they want to make complaints or to find something they left on the taxi.
Transactions are cash-based, exposed drivers to the risk of being robed.
Random pick-ups expose drivers to the risk of picking up a criminal.

Driver profile

Pick up locations

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Secondly, accidents happen in every industry. There is no guarantee that a customer using traditional taxi services will never experience sexual harassment. Moreover, no matter how rigorous the background process is, it cannot predict future behaviors and no matter how high the safety standards are, they cannot create a risk free environment (Cardenas 2015). Therefore, although it is undeniable that accidents happened for Uber, it is unreasonable to conclude that compared with the traditional taxi services, Uber is unsafe. We believe that there is a perception problem regarding the safety issues with
Uber.
In response to the public concern about safety, Uber’s safety team has implemented a comprehensive safety program to improve the safety of their drivers and passengers (Cardenas 2015).
Recommendations
Besides what the company has been doing, our recommendations are:







To create transparency, the company may consider using third party background check. This will increase public confidence on the reliability of Uber drivers.
Conduct a campaign, using social media to demonstrate that Uber is safer than what is currently described by the media.
Give female passengers the option to select female drivers. This will increase female passengers’ confidence when they call an Uber taxi at night.
Provide training for drivers to ensure that they have the skill sets to handle emergency situations and they are well aware of their own rights and responsibilities when acting as Uber drivers. For example, Uber drivers should have the responsibility to make sure that their riders get from point A to point B safely. Practices such as Uber drivers will wait until the riders get into their front door before driving away can make a big impact on improving customer safety. The training should include testing and evaluation.
Set up a response team to deal with problems reported by customers 24/7

All of the above recommendations are aimed at changing the Tactics (the T part in the PARTS model).
Uber will eliminate uncertainty and hence changing public perception about its safety.

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APPENDIX 11: LEVEL 3 LEADERSHIP

PURPOSE:
The purpose of this appendix is to determine the influence of the current rating system on Uber drivers.
By understanding the motivators behind their actions, we hope to change the drivers’ actions to improve safety for customers.
SOURCE & METHODOLOGY:
Sources:
MGMT5150 – Skills for Leadership: Power and leadership
Uber blog, Uber’s new BHAG: UBERPOOL, February 02, 2015. Retrieved from http://blog.uber.com/uberPOOL-2015 Methodology:
1. Identified the underlying reasons why drivers comply to safety standards set by Uber.
2. Identified the level of leadership influence which those reasons fit into.
HIGHLIGHTS & IMPLICATIONS:
The examination highlights that the current way through which the Uber is managing its drivers i.e. through the rating system, influences drivers’ behaviors through a negative incentive. When drivers see the rating system as a threat to their job security, they find ways to avoid bad rating. The result is that they are not committed to deliver excellent customer services and improve customer safety.
In order to generate real commitment, second and third levels of leadership are needed. Therefore, we recommend an incentive program for drivers with good rating and other activities such as annual seminar and year end party to create a sense of belonging to the drivers.
Level 1 – Behaviours: Compliance & short-term
- Influencing what people do

Uber requires all their drivers to maintain a 4.7/5 minimum rating to stay with Uber. Drivers with rating lower than 4.7 will be fired.

- People treated as black box
 Using threat to influence behaviors
To avoid being fired, Uber drivers try to deliver good customer services to receive good rating.
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Level 2 – Thoughts: Cognitive/normative commitment
- Influencing what people think

Offering drivers with good rating company stocks

- Conscious processing of information
 Uber drivers see rating not as a threat, but as an opportunity to create personal wealth. Moreover, owning stocks at Uber will help drivers to develop personal connection with the company, which in turn create commitment.
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Level 3 – Values, beliefs, assumptions: Affective commitment & long-term, cultural change
- Influencing how and why people think, how they feel, what they believe
- Holistic and respectful view of human beings
Uber’s mission statement is “Transportation as reliable as running water, everywhere for everyone” (Uber blog 2015). Uber is working to deliver more value to consumers through lower prices.

 Uber drivers voluntarily comply with safety standards set by Uber because they believe in the value of becoming an Uber driver. They are proud of being part of a company that delivers transportation to everyone. After conducting the Level 3 Leadership analysis, we recommend that Uber will create an incentive program for drivers by offering drivers with good rating company stocks. This positive reinforcement would align the driver’s personal interest with the company’s goal, motivating the drivers to improve their customer service.
Moreover, the company should conduct annual company seminars to communicate company’s values to its drivers. A year-end party to say “Thank you” to Uber’s loyal and hardworking drivers will create a personal connection between drivers and the company, which in turn create a sense of belonging to the drivers. APPENDIX 12: The PARTS model
Purpose
The purpose of this appendix is to improve the safety features both in regard to


Emergency situations like assault or any form of violence or hurt
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

Maintaining the anonymity of the customers

Methodology



Identified the problems areas with the current application with regard to the purpose mentioned above. Identified Uber’s context of influence or 15% solution with regard to the purpose mentioned above. Key findings



Mask the identity of the customers so that drivers who are unsatisfied with customer’s rating cannot trace the customers’ contact information to make personal insults.

http://www.thedailybeast.com/articles/2014/03/28/uber-s-biggest-problem-isn-t-surge-pricingwhat-if-it-s-sexual-harassment-by-drivers.html
Add additional safety features to enable passengers to contact the local police or the response team immediately in emergency situations.
 Changing the Added Values (what each player brings to the game, can be raised and lowered)
 Mask the identity of the customers so that drivers who are unsatisfied with customer’s rating cannot trace the customers’ contact information to make personal insults.
There had been instances where the customers (especially females) has been tracked by the drivers specially the ones who chose to give bad ratings to the drivers. As with every feedback, Uber should make an effort to maintain the anonymity of the customer.
This may not be possible with the current model because as soon as a driver leaves a passenger can get to know about the rating the customer has given him, based on the change in his ratings
(whether it has improved or gone down). This may be improved by putting in place a system whereby drivers will be informed of their cumulative grading on weekly basis. This will make it difficult for the drivers to know who that out of all the customers they served in the previous week gave them the bad rating.


Uber should start an emergency help line
Uber doesn’t have any central number or helpline that passenger can call when in problem. I think a help line should be in place which should be easily accessible and should be incorporated in the
Uber application. This not provides credibility to Uber in terms of safety but can also get them a real time feedback which is even more important if it goes by weekly grading model as mentioned above. Page 29

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 “One touch” provision in Uber application to start the emergency signal
A “one touch safety” button on the Uber application should be incorporated into the application.
This feature will enable the customer to send distress signals to the nearby police station and other uber drivers in loop in the nearby area with a just a single touch button on the application
This feature should be displayed more prominently on the application and should be on the screen area as mental faculties are not fully functional in emergency situations.

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