Case Study: Autonomous Vehicles of Uber

Autonomous Ride-sharing Uber was founded in 2009 to make transportation as reliable as running water, everywhere, for everyone, using a smartphone app to connect customers with drivers. Rapid growth saw Uber in 100 cities internationally by April 2014. The on-demand ride-share service began several years before closest competitor Lyft, and was therefore able to amass a substantial market share within the industry.

In August 2014, UberEverywhere initiative was launched to expand Uber’s global network and revolutionise transportation systems to be more reliable, convenient and accessible. The campaign was met with extensive protests against Uber from European taxi drivers.

In May 2014, Google unveiled a new autonomous car prototype at Recode's Code Conference. Hours later, Uber’s then CEO, was outspoken in his desire to replace drivers with autonomous vehicles and outlined the potential benefits for Uber’s customers once this technology existed. At the time Uber’s active driver base was more than 160,000 internationally. In order to more rapidly progress their self-driving ambitions, Uber acquired technology startup Otto and partnered with car manufacturer Volvo in late 2016. Anthony Levandowski, a former Google engineer, took the helm of Uber’s self-driving transportation, delivery and trucking development and the company commenced vehicle testing.

Uber launched its first self-driving Ford Fusion test car from their Advanced Technologies Center at Carnegie Mellon University in Pittsburgh at the end of 2016. They claimed that autonomous driving technology would result in minimised traffic congestion and more affordable and accessible transportation, as well as a reduction of car accident deaths caused primarily by human error. Despite Pittsburgh’s initial excitement to partner with Uber, the relationship soon soured, with Uber accused of poaching university staff and not living up to their initial agreement.

The University of Arizona became the next place for Uber to base their self-driving test vehicles. San Francisco soon followed, yet the California Department of Motor Vehicles quickly revoked their license and Uber shut down the pilot program due to disagreements about permits. Further bad news was to follow for Uber, after losing a legal case in the UK, which required them to classify their drivers as employees and which could open the company to claims from its 40,000 UK drivers not then entitled to workers’ rights.

Not long after, Uber lost its license to operate in London due to "public safety and security implications”. 2017 continued to be a challenging time for Uber with a drop in US market share from 84 to 77 percent in response to #DeleteUber campaigns, a poor company culture and the removal of CEO Travis Kalanick. Uber were also sued for the theft of trade secrets, with Google claiming their circuit board was a near replica to their own, and that prior to departing Google, a former employee downloaded a large amount of proprietary data. Later in the year one of Uber's test cars was involved in a crash in Arizona and the program was temporarily put on hold until driver error of another car was found to be at fault. Uber further accelerated plans for an automated fleet in 2017 by committing to the purchase of 24,000 Volvo SUVs. In October, Uber halved the employees manning their self-driver test vehicles, despite safety concerns expressed by employees. By years end, Uber had completed 5 billion trips, expanded to 633 cities and its autonomous pilot program was completing an average of 80K miles/week.

In late 2017, technology investor Softbank valued Uber at $48 billion and a future IPO was predicted. In early 2018, Uber’s new CEO Dara Khosrowshahi expressed his belief that the company would be profitable within the next few years and that automated Uber cars would be available to the public outside of testing by 2020. Weeks later Google and Uber reached a legal settlement so that the race towards autonomous vehicles could continue. The company expressed a desire to put integrity at the centre of future decisions and put measures in place to ensure their self-driving technology is created using only Uber software. In March 2018, after being involved in the first fatal US crash involving a self-driving vehicle with the AI in control, Uber indefinitely suspended all self-driving. It was revealed that prior to the crash, the pilot program had numerous issues that required far more human intervention than competitors’ vehicles and that staff were under pressure to provide Uber’s CEO with a seamless autonomous ride at an upcoming visit to their test-centre.

According to company documents, Uber was planning to seek regulatory approval within 2018 to start a self-driving car service in Arizona.

Case Questions and Answer Guide

What motives would Uber have to develop autonomous vehicles?

With large reductions in cost likely for ride-share customers once drivers are removed from the pricing model, the implication is that self-driving vehicles will dramatically impact the industry. Market share is at stake for whichever company is first to market with an autonomous commercial fleet of vehicles. With competitor Lyft, amongst others, also currently developing self-driving vehicles, the pressure for Uber is high. Fears exist that competition of this nature could result in their business dissolving, with Uber’s Travis Kalanick previously describing developing self-driving vehicles as “basically existential for us.”. With a high valuation and impending IPO planned, if Uber were to lose a significant amount of market share, it’s unlikely they would be able to maintain their current revenue and expansion in order to provide the predicted return investors are expecting. Replacing drivers with driverless vehicles will allow Uber to increase revenue, whilst simultaneously reducing payments to drivers, resulting in an increase in profitability. Considering that Uber has raised billions of dollars since 2009 there is a great deal at stake for them financially.

Legally, Uber’s goal to replace their human drivers with self-driving technology may not be problematic, but is such a large scale redundancy ethical?

Questions surrounding who is responsible for the fallout caused through technology-driven unemployment or under-employment are incredibly complex and move beyond the borders of the business and economic, into sociological, political and philosophical realms. Whilst not a legal responsibility, it would stand Uber in good stead ethically to contribute to the complex research around technology-driven unemployment or under-employment in their industry. Despite ongoing legal proceedings across the world in relation to whether drivers in the gig-economy should be legally defined as contractors or employees, at this stage, they are largely considered by the law to be self-employed, and as such, have no employment rights surrounding future redundancy. Ethically it would be beneficial to Uber’s public image to provide a level of training and career coaching to their 3 million drivers, yet, as Uber previously addressed the prospect of self-drivers replacing humans by stating "We all have to find ways to change with the ways of the world,” any such undertaking seems unlikely. Whilst Uber have placed resources into the development of a research project in collaboration with economists and industry specialists, in order to gain an understanding of the potential economic implications of self-driving trucks, they have not thus far focussed on the future plight of their current drivers.

How is Uber ethically rationalising the decision to simultaneously create jobs and develop the technology required to render these jobs obsolete?

Uber is using a normative utilitarian theory of ethics to rationalise and guide their decision to make redundant the driving jobs they have helped to create, as well as numerous taxi, courier and truck driving positions. Their argument rests on the claim that the increases in large-scale safety, efficiency and accessibility self-driving vehicles will provide humanity are of a greater benefit to more people after the costs of redundancies are factored in, than if such technology was not developed. Traditionally, large-scale disruptions to industries have generally not come from within and so the ethical dilemma in this instance is somewhat unique to the disruptive company which has aimed to replace taxis since its conception. Decision making that utilises a utilitarian ethical theory is limited by the impossibility of accurately predicting and measuring the future consequences of such decisions and comparatively weighing beneficial and detrimental outcomes evenly.

What are the biggest impediments to Uber developing autonomous vehicles?

Since conception Uber has developed a brash and abrasive reputation that has seen the company face a series of run-ins with their peers, government regulators and their own customers and drivers. Their lack of desire to follow the rules has seen repeated backlash towards the company with venture capitalist Peter Thiel calling them “without question the most ethically challenged company in Silicon Valley.” This reputation has already resulted in difficulty in maintaining regulatory approval for their test vehicles and in light of their recent shut down in Arizona after a fatality involving one of their vehicles, Uber is likely to face an uphill battle compared to their competitors on regulatory grounds. Furthermore, development is likely to require ongoing funding for some time which, whilst not an issue for companies such as Google, may not be a reality for Uber with funding in recent times becoming less generous. Uber will also need to work hard to rebuild community trust after the recent fatality and series of bad publicity.

Reflection

The key learnings that I’ve attained through the creation of this case study relate to the limitations of the stakeholder approach to business ethics and the necessity to look at ethical conflicts from as broad a number of perspectives as possible. In theory, the utilitarian style stakeholder approach seems to be an efficient and egalitarian way in which to institute ethical-decision-making practices within a business, however practically, the reality of weighing each stakeholder’s interests equally is unrealistic. Essentially there can be no clear-cut solution to difficult ethical dilemmas when conflicting interests exist and where a variety of stakeholders retain different values. In this particular case, there are strong arguments for Uber to continue providing employment for its 3 million drivers, yet equally valid reasons to continue developing a technology that could create safer, cheaper and more efficient transport services for many. Neither is right or wrong and both options have intrinsic positive and negative characteristics that affect different stakeholders in a variety of ways. I’ve been able to identify my own bias when reflecting on the process of putting this case study together and assessing the vast complexity of the issues present.

The crux of this case and many others currently occurring in disparate industries is how to deal with mass redundancy once technological advancement in automation eliminates whole industries. It is an incredibly complex concern that can not be resolved by any business model and requires a great deal of ethical consideration from cooperative economic, sociological, political and philosophical minds.