Definition of Platform-Based Peer Production System
Discuss about the Ethics and Governance for Peer Production System.
In this essay it is explained that whether the elements of this system are correct in claiming that the organizations that are based on platform based peer production system have affected the society positively or who believes that operations of such organizations are unethical inherently. The above-mentioned discussion will be done on the companies Deliveroo and Uber that have been chosen as these companies are based on platform based peer production system.
Common based peer production that is also known as platform based peer production is defined as a socio-economic activity. It has been argued by Paquette, Sommerfeldt and Kent (2015) usage of new internet services and technology is involved by the system of services and goods. In the field of technology, there was the growth and development of the platform based peer production system. The purpose of this system is to get together thousands of people to share the knowledge, cultural goods and information effectively. However, there are several organizations that was built on such platform based peer production system that does not have the rigid managerial hierarchy that are not subjected to market pricing that is very competitive. There are many factors that include unique technologies and innovative software that have been contributed to make the company develop that is based on Platform based peer production system.
The model of the platform based peer production, was firstly developed by Yochai Bnekler, a professor of Harvard Law School. There has been enormous expansion and growth in the business models of the organizations like Deliveroo and Uber but similarly these companies were facing some issues of labor. As per the reports of the Forbes, there were a lot of controversy in which the companies named Deliveroo and Uber were involved. The company must be in compliance with the standards of ethics otherwise the can face allegations. Uber has lower down its reputation by involving themselves into unethical, immoral activities but similarly it seems that it is not affecting the bottom line of the operation of uber. There has been accusations of sexual harassment of the customers and employees that was received by uber. It has also been suspected of obtaining illegally records of medical of the victims of rape so that they can put down their claims. There has been several allegations that have been faced by the HR department of the Uber of creating unsafe environment for the working women.
Yochai Benkler's Model of Platform-Based Peer Production
According to Lownsbrough (2018) the business model of Uber basically focusses on the expansion and development of the organization that reflects the ambition of the company. The economic business model of the organization do not have the possibility to allocate funds for the improvement and safety of the customers and to adopt the CSR policy. Amazon and uber has the same business policy. Both the organizations basically depend on the investments that are done by the investors to supply for the growth and development of the companies in the market. In the primary phase, Amazon achieved higher success in the retail market as they made huge investments. After achieving this success, Amazon started to make huge profits. However, amazon did not have to acquire establishment cost and shop maintenance as it is an online business unlike any other shops who conducts business and it had a competitive advantage. The retail market uses the economic scale to function in international and national markets.
The business of Uber has done an investment for $11.5 billion dollars that has helped Uber to emerge and grow in the new market but the investment amount has been raised by the investors and banks. Since the operation of this company, Uber has not been able to make profits substantively. There has been a huge loss of amount three billion dollars in 2016 because of the cases that were charged on Uber and because of this loss Uber had to pay all the amount as debts or equity. Therefore, it can be explained that the nonstop growing of debts is not helping them to achieve their goals that has been set by them and it is also not allowing them to meet the ethical standards.
There was an announcement held by Travis Kalanick, the CEO of Uber that there will be an investigation to find those people who are responsible for the allegation of sexual harassment that has been faced by the company. There were 20 people who were terminated after the investigation as there indulged in some sexual conduct and some of them were seniors but the identity of those people were not disclosed (Solon 2018). As per the management of Uber, it was said that if the PR of the company will be improved then it will help the company to build up its reputation. However, this decision did not help to come out of its controversies. Therefore, the department of transport of London had decided to withdraw Uber’ license that will help it to become non-operational in the London (The Conversation 2018).
Controversies Surrounding Uber
The business of taxi has remained localized but they operate in different techniques. The main costing price in this taxi industry are mainly the cost of drivers, fuels and the cars. However, for evolving in this new market, the business model of Uber do not identify these costs and only concentrates on the distribution of funds. The aim of the business of Uber to evolve in this market is to subsidize the wages of the drivers and in the reduction of the fees of the passengers.
The main aim and requirement of Uber is to provide passengers with employment protection to the drivers and safety to customers to function properly in a regular market. Therefore, if the organization continuously faces the competition to local competitors, the organization will not be able to achieve trust and they have a little hope that they can repay the amount back to the investors.
Another such company is Deliveroo that is also based on platform based peer production system and it has also been involved in controversies for not meeting the standards of ethics. The managers of Deliveroo have said that the courier suppliers must be treated independent suppliers they are engaged in the work of delivering takeaways. The managers of this company have suggested that these courier suppliers must be treated as contractors who are independent as they do not carry any employment rights. These suppliers must be differentiated from the employers and staff which make the team of the company. As suggested by Recruitment international.co.uk (2018), the way of treatment of suppliers and drivers from Deliveroo and Uber have allowed the organization from avoiding the obligations of paying the minimum wage to the drivers and the suppliers. The business models of the company named Uber and Deliveroo treat their food suppliers and drivers as contractors who are independent so as to save millions of dollars tin sick leaves and pays of holidays. This decision that has been made by the managers of these companies named Uber and Deliveroo will save the money being wasted.
The management team of Deliveroo was given a list of do’s and don’ts so that the workers who have been employed by the company in the role of economy had claimed that they might take legal action against the company. These courier suppliers that make takeaways and deliveries have said that they want an explanation or clarification regarding the differentiation between the independent contractors and the employees. These courier suppliers have demanded more of employment rights that includes the rights to receive minimum wage, paid sick leave and paid holiday leave. As per the reports of Leigh Day, a law firm, there are over two hundred workers of Deliveroo that have claimed that these workers need recognition as employees because they wear uniforms, carry out shift trials and work during the working hours. They also want their wages to increase as they are paid very less. It was said that the movement of suppliers are being constantly monitored by the employers and these suppliers are being subjected to reviews of their performance. However, the company does not consider them as their employees and they do not have anything to say on their term of employment.
Business Model of Uber
Such observations of businesses like Deliveroo and Uber are based on the peer production system, which can be analyzed by certain submissions of moral theories.
The theory of Utilitarianism states that an act can be said to be ethical and right if it aims to create the most possible benefit for maximum number of people (Piacquadio 2017). As said by Alon and Lehrer (2017), the maximization of good consequences need to be done over the bad consequences, by the companies and individual. As preached by Radek and Singer (2017), the value of any action is calculated according to the summation of the consequences which are undertaken by the individuals. For measuring whether or not the operations of the companies such as Deliveroo or Uber are connecting with the moral principles of Utilitarianism, as it is very important to identify the stakeholders involved it (Mulgan 2014). In these cases, customer and the driver are said to be the stakeholders of Uber. Meanwhile, the couriers who take the deliveries are said to be the stakeholder of Deliveroo. Though it is said that Uber has failed to make a good impact on the drivers or the customers. The acts related to sexual harassments defines that ethical values are not maintained by the company. Some major acts such as not recognizing the driver as an employee or not giving him the pay or benefits are also said non ethical as it creates no good for the drivers. So, the operations of Uber are declared to be unethical according to the principles of Utilitarianism (Mill 2016).
Such things are similar in the case of Deliveroo as well, this company also does not consider their couriers as employee so that they can avoid the payment or any other employment benefits. Therefore, this too is stated to be unethical as there is no profits provided to the stake holders.
As per Russell (2016) the theory which only emphasizes on the duties of individuals is said to be deontology theory, it judges an action on the ground of whether it is wrong or right. This theory also does not consider the consequences of actions unlike the theory of consequentialism (Bowie 2017). Rather than the consequences, the moral status of the act is determined by the intention of the agent who is performing (Paquette, Sommerfeldt, and Kent 2015). Therefore, after investigating the operations of Uber and Deliveroo by the principles of Deontology, these operations are declared fundamentally unethical. It is the basic responsibility to give employment protection to the drivers itself, which needs to be followed by Uber. But, these business models are unable to afford to assign the funds to fulfill the ethical values (Mallia 2015). In case of Deliveroo, the company needs to take the responsibility of providing the benefits of employment to the courier as they play a major role in the company’s success. Their task of delivering the food is said to be the most important one. Therefore, it is stated that labelling them as independent contractors just to avoid payments and employment benefits is unethical (Bowen and Prescott 2015).
Controversies Surrounding Deliveroo
Virtue ethics is a theory which is applied to measure whether or not the operations happening in the company are said to be ethical (Frede 2015). As preached by Chan (2016) this theory is a normative story which highlights on the moral and virtue of a particular choice as conflicting to the consequence and duties of the act. The vital aim of this theory is to support the moral value or virtue, which is similar to the consequensialists who are mainly focused by the consequences of the action Annas (2015). As preached by Jayawickreme et al (2014), virtue can also be a person’s inherent quality, which can be developed in a time period. Therefore, such operations done by the companies like Deliveroo and Uber are required to be investigated by the point of view of the Virtue Ethics, not identifying the couriers and drivers as employees just for the sake of avoiding the payments and benefits is a prima facie unethical (Elliot 2016). It is also not ethical to address the couriers as contractors because the need to wear uniform during working hours and their movement is tracked as well (Van 2014).
The theory of Utilitarianism states that an act can be said to be ethical and right if it aims to create the most possible benefit for maximum number of people. The maximization of good consequences need to be done over the bad consequences, by the companies and individual. The value of any action is calculated according to the summation of the consequences which are undertaken by the individuals. For measuring whether or not the operations of the companies such as Deliveroo or Uber are connecting with the moral principles of Utilitarianism, as it is very important to identify the stakeholders involved it. In these cases, customer and the driver are said to be the stakeholders of Uber. As per the given analyses above it is also clear that the actions of Uber in the light of Utilitarianism are unethical. Further the virtue ethics is a theory which highlights on the moral and virtue of a particular choice as conflicting to the consequence and duties of the act. The vital aim of this theory is to support the moral value or virtue, which is similar to the consequensialists who are mainly focused by the consequences of the action. As per this theory also the actions of Uber are not seen as being ethical. Therefore, in the conclusion it can be stated that the companies which are based on peer production system for example Uber and Deliveroo have a massive chance of growing and expanding in different markets. Though, business models of these companies require to have enough money to assign the funds in order to fulfill with ethical values. In such a case, these companies are getting tangled in many controversies. In the case of Uber, it has been facing a hug issues with its employee and customers regarding sexual harassment, many allegations of overpowering records of sexual harassments have also been faced. The controversies faced by Deliveroo on the other hand is basically about labelling their employees as independent contractors so that they could avoid the payments and also the benefits of the employment can be stopped. After studying all this data regarding such ethical theories, it is stated to be essentially unethical.
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