Uber, show us your CSR!

| February 23, 2016

The sharing economy might be great for consumers, but how socially responsible is it? Dr Leeora Black from ACCSR asks some hard questions.

I took an Uber for the first time recently. Prompt pick up, clean car, polite driver and automatic payment at a reasonable price. I gave the bloke five stars. A couple of days later I took a regular cab. Dirty interior… sticky even… surly driver… Suffice it to say, I am now an Uber convert.

However, as a CSR professional this also raises some hard questions for me. How socially responsible is Uber? Indeed, how socially responsible is the sharing economy?

The so-called ‘sharing economy’ presents disruptive business models that rely on advanced technology for their implementation. Although there are a few different models, what they seem to have in common is the promise of reducing environmental impacts through reliance on technology, and the big focus on reusing, recycling, and sharing.

The sharing economy as a concept is attractive from the perspective of corporate social responsibility and sustainability.

It holds strong potential for positive social impact. Success in the sharing economy relies on a high level of trust between participants and a high level of transparency that engenders that trust. There is the promise, broadly speaking, of increased social capital in communities and societies, as people learn to trust complete strangers through the level of transparency and the reliability of the technology platforms.

Risks of the sharing economy

On the other hand, sharing economy companies need to think very carefully, as any organisation would, about their social and environmental impacts. They are potentially vulnerable to some social and environmental risks, apart from the economic risks that accompany all new disruptive business models.

For example, Uber’s powerful ride-share platform is a threat to the taxi industry and the livelihoods of its employees. Uber has also been accused of tax avoidance. We would not tolerate avoidance of regulation and tax from a traditional company, so we should not tolerate it from these new sharing companies either.

From the social point of view, sharing economy companies may carry other risks, such as labour exploitation. People often participate as individual contractors and take all of the risk of employment on themselves, so they have the risks the same risks as a contractor would have in the traditional economy but perhaps even more so because there is no clear regulatory regime around the sharing economy.

Environmental risks include greenwashing – the risk of not living up to the promise of reducing negative environmental footprints.

Regulation a challenge

The NSW Government has released a framework for regulating the sharing economy in response to its growth. The position paper said the industry contributed $504 million to the state’s economy last year alone.

However, the sharing economy poses difficulties for regulation. Because it is so international, we don’t have the regulatory ability yet in this area the way we do in the traditional economy.

More exploration of the sharing economy is needed to ensure its potential is maximised, while negating the risks.

We need to think very carefully about how these disruptive new business models can make a genuine positive social impact and a genuine reduction in negative environmental impacts, and that they really contribute in a fulsome way to the betterment of society and economy.

Uber has not so far endeared itself to the CSR pundits, and is charged with exploitative practices by some.

As a consumer, I am loving Uber’s great service. But like consumers of any company’s products or services, I have broader expectations than that. Come on Uber, show us your CSR!