Question

In the mini-case from Chapter 1, Insuring Uber's App-On Gap, Uber stood in stark opposition to the bill introduced by Susan Bonilla. The legislation would require them to increase their coverage of their drivers at a financial cost to the company. You are tasked to answer the following questions: . What stakeholder interest's did Uber's position serve? How? . What actions could Uber take to be more inclusive of the concerns of other stakeholders? Should Uber have taken a different position on the issue? o If yes, what would it have been? o If no, why not? Consider the competing interests and responsibilities in play with this scenario and seek to strike the appropriate balance.

Answer 1

1) Uber's stakeholders can be divided into market and non-market.

Market stakeholder	Non market stakeholder
employees of uber	Insurance association
customers of uber	taxi companies
	public in general
	Competitors
	government
	Driver association of cab based drivers
	consumer attorneys

Now, let us study the impact of of Uber's opposing stance on its shareholders:

employees of uber: It failed to reduce driver's risk. personal liability of the driver increased. so, NEGATIVE impact

For uber customers, driver's association, insurance association and consumer attorneys, the impact was also NEGATIVE. As, it failed to reduce risk of insurance non-payment from a firm over an individual.

Increased liability for uber decreases their comparative advantage over traditional taxi companies as they already pay for insurance. Uber's stance resulted in the playing field not becoming equal and taxi services remain in a disadvantageous position in the market. So, NEGATIVE impact.

Competitors and tech firms BENEFITED as Uber accepting the law would result in them having to incur additional cost due to them having to take extra responsibility.

2) Uber should work with insurance agency and design a cost effective price to provide insurance.This won't increase their cost too much and  will result in less unsatisfied drivers and also would reduce cost because of less customer lawsuits. Agreeing to public opinion would improve its reputation and result in increase in customer base.

3) Yes. Uber should work with insurance agency and design a cost effective price to provide insurance.This won't increase their cost too much and  will result in less unsatisfied drivers and also would reduce cost because of less customer lawsuits. Agreeing to public opinion would improve its reputation and result in increase in customer base.