The purpose of this paper is to provide an in-depth case study of Uber based on legal and ethical principles in relation to Uber’s internal and external affairs. Topics such as duty of loyalty, diversity, privacy, worker’s rights, global climate change, and risk management will be discussed. There will be a section of an opinionated conclusion at the end of the paper.
Duty of Loyalty
Employee at Will
Individuals employed at will can be terminated at any given time with or without “good reason”, and he or she would have limited legal rights to fight it. In most states, employers have adopted at will policies as part of their rights; Montana is the only exception. In Montana, after an initial “probationary period”, employees are protected from being fired without a reasonable cause (Guerin, n.d.).
At will employees cannot be fired for reasons illegal under the state or federal law. These include race, religion, or gender. Employees are protected from reporting illegal activity, discrimination, harassment, health and safety violations in the workplace, or taking family or vacation leave (Guerin, n.d.). these rules are put in place to protect employee’s rights, however, reformation was needed to better protect their rights.
Exceptions Under Statues
The earliest adjustments occurred in 1935 when the U.S Supreme Court announced that employees could not be terminated as punishment for attempting to organize into unions.Federal statutes included clauses that compensated whistleblowers punished for reporting misconduct to authorities (Halbert, 2015).
Because of the Enron and Worldcom scandals, Congress passed corporate fraud legislation that protected people who reported financial misconduct in publically traded companies. This law is known as the Sarbanes-Oxley Act and it strengthened and expanded employee protection in the wake of the housing crash and economic downturn that occurred from 2007 to 2009 (Halbert, 2015).
In 2012, the Whistleblower Protection Enhancement Act (WPEA) was passed to strengthen the Whistleblower Protection Act (WPA) of 1989. From 1994 to 2012, judges thought the Whistleblower Protect Act (WPA) meant that “federal employees would lose their cases if they disclosed to a supervisor, blew the whistle while carrying out their job duties, or revealed the consequences of a policy decision (Halbert, 2015)”. This narrow interpretation of this act required employees to present “undeniable, uncontestable or incontrovertible proof” of their claims to qualify for protection. The WEPA has improved the remedies available for federal employees who notify the authorities of employer misconduct (Halbert, 2015).
Uber’s Policy On Whistleblowers
According to Uber’s official website, part of the company’s “The Road Ahead” plan is to increase accountability:
“Accountability is not a one-time thing. We’re creating an Ethics and Culture committee to oversee the actions of our company, and our leaders. We had also instituted a 24/7 support line so that any employee can feel safe reporting unprofessional behavior (Uber, 2017).”
Uber’s Unethical Conduct
On February 19, 2017, Sam Levin wrote an article outlining sexual harassment claims made by Susan Fowler. A blog written by Susan Fowler, a former engineer at Uber, detailed her sexual harassment experience that was initiated by her manager. This detailed report prompted Uber’s CEO, Travis Kalanick, to announce an urgent investigation. Fowler claimed when she joined the engineering team, her manager immediately propositioned her for sex. On her first day of work, her manager sent her a series of messages saying that he was in an open relationship and trying to find new partners. Fowler told him that his behavior was clearly out of line. She took screenshots of the messages and sent them to Human Resources. Fowler expected a company of Uber’s size to handle the problem quickly, but she met resistance. According to Human Resources, this was the man’s first offense and since he was a top performer for the company, all they did was give him a “stern talking to.” (Levin, 2017)
After talking to more female engineers in the company, Fowler found out that some of the ladies had reported inappropriate interactions with the same manager before she worked at Uber. When these ladies reported their incidents, they were told that it was his “first offense. This man eventually left the company, but when she tried to transfer to a different team, Fowler was blocked although she met the qualifications. In fact, Fowler had a “perfect performance score.” She was later told that performance was not just about the score, it also factors in things outside work and personal things. When Fowler first joined, her organization was 25% female; by the time she tried to transfer to another team, the female demographic had dropped to 6%. When asked about the declining numbers, the director said the female engineers were not good enough (Levin, 2017).
After filing several more reports to Human Resources about discrimination, Fowler was told that she was on thin ice and that one more complaint would cause her termination. Although it was illegal to terminate an employee based on these complaints, Fowler quit Uber sooner after and joined Stripe (Levin, 2017).
Privacy and Technology
Uber’s privacy statement applies to drivers, agents, partner transportation companies, and individuals who use the Uber platform and lives in the United States. Individuals who use the application or Services for transportation or services are not included (e.g. Users). However, if an individual uses Uber as both a User and a Driver, the privacy statements apply (Uber, 2015).
Uber reserves the right to collect personal information about its users when they create an account or use their services. This includes location, which information can be stored, processed, and accessed by Uber. This information is retrieved by Uber’s service providers, for marketing, analytics, industry, market research, and by Uber for any legitimate business needs (Uber, 2015).
Uber may disclose information, including personal data, to third parties if:
“(a) there is a complaint, dispute or conflict, including an accident, relating to a Driver; (b) it is necessary to enforce the terms of the Driver Agreement; (c) it is required, in Uber’s sole discretion, be applicable law, regulation, ordinance, license, or operating agreement; (d) it is necessary, in Uber’s sole discretion, to protect the safety, rights, property, or security of Uber, the Uber Services, or any third party; to detect, prevent… security or technical issues… to prevent or stop activity in which Uber… considers to be, or pose a risk of being, illegal, unethical, or legally actionable (Uber, 2015).”
These terms and conditions are necessary to protect the company if a Driver or agent become liable, or if there is a disputed claim. When consenting to terms such as these, it is important to know and trust the company and respect the leaders and their practices. Perhaps the most dangerous consent is the Location-Based Services Consent. When signed, Uber is absolved from all liability, claims, or damages that occur while using Uber Services.
In October of 2015, Uber launched an update announcing this would make the Uber application easier to use. With this update came a request to collect location data up to five minutes after the rider’s trip ended and when the application is running in the background of a smartphone. Uber claimed this permission was needed to provide the “most precise transportation service.” Since “location is at the heart of the Uber experience,” they request riders to provide more information to increase estimated times of arrivals and identifying the best pick-up locations. These improvements are targeted at markets where reverse geocoding is inaccurate. This would also allow riders to share locations and estimated time of arrivals with friends and family. Despite these promises and improvements, customers were outraged that Uber forced them to share more location data than they wanted. To make matters worse, Apple helped them do it (Hawkins, 2015).
Apple offers its users three location-based settings: “Never”, “While Using the App”, and “Always.” Until now, Uber allowed the “While Using App” option, but Apple allows developers to disable this feature. Now, Uber users are forced to choose between “Never” and “Always”. If Apple users choose to “Never” share their location, they have to manually enter their pick-up address. While this is a mild inconvenience for Apple users, Android users are not even given this option. One rider told The Verge “It felt pretty icky having to tap ‘Always’ knowing what I was giving up without any recourse (Hawkins, 2015).” This source also noted that empowering users to choose what information they shared and when they shared it would instill trust and appreciation in this new service. Users have no reassurance that Uber would limit its location tracking to only five minutes after the trip ends (Hawkins, 2015).
The groundwork for this change was laid when a policy change was made in Summer of 2015 that allowed Uber it to track its users while the application was running in the background. As a result, a group called, Electronic Privacy Information Center, filed a complaint with the Federal Trade Commission saying that this was “unlawful and deceptive.” Uber argued that since this information was voluntarily given, they were operating within the law (Hawkins, 2015).
This was not the first time Uber faced privacy concerns. According to two former Uber employees, it is easy to track customers with a tool called “God View.” God View allows corporate employees to view the location of Uber vehicles and customers who requested a car. While this information is readily available to corporate employees, Drivers do not have access to God View. The use of God View was not monitored and since the application was authorized for “legitimate” business purposes, a strong foundation for misuse was established. According to Uber’s policy, violations result in disciplinary action, including termination and legal action (Bhuiyan, 2014).
This misuse is exemplified in 2011 when venture capitalist, Peter Sims, received text messages from a stranger telling him exactly where he was while he was traveling via Uber in Manhattan. He was later notified that the person who messaged him told him was at an Uber launch party in Chicago. Sim’s movements were being tracked on a large public screen. Another incident occurred in 2014 when Josh Mohrer, the general manager of Uber New York, emailed Johanna Bhuiyan’s, a BuzzFeed journalist, logs of some of her Uber trips; he had not asked her permission (Bhuiyan, 2014). With a history like this, no wonder customers are hesitant about trusting Uber to honor the “five-minute” agreement that comes with this new update.
According to the Merriam-Webster’s dictionary, a stereotype is derived from a French word that means “standardized mental picture that is held in common by members of a group and that represents an oversimplified opinion, prejudiced attitude, or uncritical judgment (Stereotype, 1828).” It is important to avoid stereotyping when forming a workforce because basing qualification of doing a good job on physical or societal partiality can hold the company liable for discrimination. It is important to diversify the workplace because individuals come from different walks of life and have special qualities that can enrich the company’s culture.
The Merriam-Webster dictionary defines inclusion as “a relation between two classes that exists when all members of the first are also members of the second (Inclusion, 1828).” Uber’s official diversity page encourages Black and Asian diversity, women’s inclusion, Hispanic and Latinos, veterans, support the LGBT community, and celebrates Jewish heritage and faith. Uber partnered with the Grace Hopper Celebration of Women in Computing to recruit more women in the tech field (Uber, 2017).
In March of 2017, Uber published its diversity numbers for the first time since its conception in 2009. Their numbers are comparable to the tech industry which is white male dominated. Of Uber’s 12,000 employees, less than 40 percent are women, and Black and Hispanics account for only 15 percent of the workforce. White and Asian employees comprise a whopping 80 percent. In the past year, Uber only hired 3 percent more Black employees and 2 percent more Hispanic employees. Although Uber advocates for more women in the tech field, their engineer department has only 15 percent women (Bhuiyan, 2017).
2016 was a rough for Uber, but there are positives. 41 percent of new hires were women and 15 percent of their workforce has visas and represent 71 different countries. Uber says they were mentioned in the top 100 Human Rights Campaign’s Corporate Equality Index. This index looks at domestic partners and transgender benefits, and diversity training (Bhuiyan, 2017).
Policies for Diversification
Uber also pledged $3 million for the next three years to organizations that create opportunities for under-represented groups to enter the tech industry. Some of these organizations include Historically Black Colleges and Universities and Hispanic Serving Institutions. The company wrote in a blog post they were conducting interview training to simplify the hiring process, include more women in tech, and educate employees on “why diversity and inclusion matters”, “how to be an ally”, and “building inclusive teams” (Bhuiyan, 2017).
Despite these remedies, Uber still have trouble broadening their diversity because of the multiple scandals facing the company. Besides the Fowler sexual harassment case, many top executives either resigned or quit in response to these scandals. Amit Slinghal was asked to resign because of undisclosed allegations of sexual harassment at his previous job, Google. Ed Baker, Vice President of Product, resigned after he was reported making out with another staffer, and the company’s CEO, Jeff Jones, resigned after six months because his values did not match with Uber’s culture (Bhuiyan, 2017).
Lyft, Uber’s strongest competitor, published their diversity numbers June 2017. An initial glance shows Lyft doing better than Uber and the industry norm in terms of gender. With 42 percent of its employees identifying as female, Lyft appears to fare better than Uber. However, a closer look at the technical staff shows only 18 percent of the engineering division identifying as female. Leadership in this department is dominated by Whites (59 percent) and Asians (34 percent). Latinas and Blacks do not hold leadership positions (Hawkins, 2017).
Overall, 63 percent of the staff is white, Asians make up 19 percent, with Latinas and Blacks trailing behind with 7 percent and 6 percent. While Lyft is doing better than Uber in terms of gender diversity, the difference is slight. These numbers do not include drivers who have been accused of mistreating female and black customers. Lyft may have an advantage over Uber because their workforce is only a fraction of Uber’s- 1,600 employees opposed to Uber 16,000 employees. Both companies have a lot of work to do (Hawkins, 2017).
While Uber has policies to diversify their workforce, the implementation process is vague and broad. Combining these vague policies with multiple sexual harassment complaints, upper management resignations, and breaches in data confidentiality, Uber needs to step up its game in if wants to beat out the competition and succeed in the long run.
Health and Safety in the Workplace
Uber’s motto: Be Your Own Boss has been effective in gaining more Drivers. In fact, in a survey commissioned by Uber, 87 percent of Drivers joined because of this. Uber Drivers are independent contractors and can set their own hours. This also means they do not receive benefits. While working as an independent contractor for Uber has its perks, there are downsides. Drivers can set their own hours, but according to David McKee, a Driver from Vista, California, in order to make enough money, you would have to work peak hours- morning rush hour or weekend nights (Shahani, 2017).
While this may seem like a fair trade off, changing pay rates keep Drivers on the road longer. In a poll taken by NPR, 79 Drivers said they have driven 14-hour shifts or longer, and three people showed documentation for driving 20 hours in one day. Since the number of hours a Driver can work are not limited, the possibility of accidents and injury is increased (Shahani, 2017).
Uber has a lax policy on how many hours a Driver can work, but it tightens the reigns on monitoring the Driver’s performance. Uber Drivers have sensors in their smartphones that allows Uber to monitor turns, lane changes, and rolling stops. This is to ensure the safety of the Driver and their riders. NPR notes that the respondents to their survey, over 10 percent said they were unaware of this, and half of the respondents said they want them to stop. This may violate the Driver’s privacy because they are tracked on their personal phones, but Uber counters that tracking keeps Drivers accountable for safety, and protect them against unfair complaints from riders. Drivers, like McKee, do not trust Uber’s intentions regarding regard to their private data (Shahani, 2017).
Anna Gallegos, a writer for The Lexblog Network, wrote an article titled The Four Biggest Legal Problems Facing Uber, Lyft and Other Ridesharing Services. While Uber has not technically broken any law, its actions are warranting reviews that will eventually serve as checks and balances for ridesharing companies (Gallegos, 2014).
In early June of 2014, three disabled individuals filed a complaint against Uber and Lyft because their cars were not wheelchair accessible. According to the Americans with Disabilities Act (ADA), taxi services must not discriminate against disabled individuals and their vehicles must be wheelchair accessible. Uber and Lyft allow their Drivers to deny service to the disabled, and they do not train Drivers how to meet the legal needs of disabled customers. This is the first law suit of this kind but employment lawyer, Kristina Launey, believes that this is the beginning of reform (Gallegos, 2014).
Another issue facing Uber is local regulations. While private taxi services must comply with licensing fees, commercial insurance laws, and uniform rates, Uber and other ride share companies do not have to comply with these regulations. Where taxi drivers have to have a commercial driver’s license and have regular car inspections, Uber and Lyft Drivers only have to meet an age requirement and have a fully functioning car. Several law suits were filed claiming that ride share companies were “deceptive and unsafe for customers” (Gallegos, 2014).
The third issue Gallegos discussed by was insurance. Both Uber and Lyft’s websites offer $1 million in liability insurance plans for their Drivers. But according to George Green, writer for Insurance Coverage Corner, insurance coverage depends on who is liable- the company or the Driver. In a traditional agent-principle relationship, if the agent (employee) causes harm or injury because of his negligence while performing his duty, the principle (employer) is liable. Uber and Lyft’s Drivers are not employees. They are independent contractors. Drivers are completely liable for any damage and injury caused while transporting riders. Ride share companies maintain they have no control over the Drivers or their cars and “merely control the application that facilitates the connection between passenger and Drivers, and thus are not liable for the negligence of the driver (Gallegos, 2014).”
To date, there are no official OSHA citations for noncompliance, but there is a serious issue that needs to be addressed. The headlines of the ride sharing industry are so consumed with consumer safety and price gouging that it overlooked that Uber Drivers forgo bathroom breaks in order to keep up with intense demand. Molly McHugh, editor for The Ringer, writes that “a BBC report found that Amazon delivery drivers urinate and defecate inside their delivery van to keep up with intense demand (McHugh, 2016). Cab and truck drivers are protected by unions and are required to take mandatory breaks. Since Uber Drivers are considered independent drivers, their breaks may come at the cost of losing a pick-up request at a peak time (McHugh, 2016).
In 2015, Uber published a magazine that advised Drivers to stay hydrated and make pit stops. While this is what they officially say, they reward Drivers for doing the opposite. “Power Drivers” are awarded $2,000 for logging 60 hours in a week. Drivers are also awarded for accepting 90 percent of requests and completing as many drives as possible. Drivers are free to take bathroom breaks when needed, but they have to clock out. There are several reported cases when Drivers opted out of relieving themselves during peak times to make more money (McHugh, 2016).
Global Climate Change
As a ride sharing company, Uber’s business relies heavily on their employee’s vehicles to transport riders to their destinations. Uber claims that by offering ride share opportunities, the total number of cars on the road and the necessity of owning a personal vehicle is reduced, especially in large cities. This claim prompted UC Berkeley to research the environmental impact of Uber and its competitor, Lyft.
While Uber says they are environmentally friendly when compared to other ride share companies, Uber does not have the complications that come with industries that produce waste and large amounts of emissions from a physical plant. So far, Uber has not regulated their Driver’s fuel efficiency, and since Uber is a substitute for taxis, it is arguable that Uber may cause the environment more harm from increased carbon emissions. Uber has skirted environmental regulations on the premise that their employees are independent contractors, but these regulations may be an opportunity in disguise (Fischer, 2016).
The public is more inclined to support companies that attempts to moderate climate change. By making itself part of the solution, Uber can capitalize on these priorities. In an effort to offer more environmentally friendly services, Uber introduced UberPool, an option that allows riders to share an Uber car with others who are going to a similar destination. This lowers the price of the ride for the customer and limits the number of trips Drivers have to make. To further capitalize on this opportunity, Uber has created a department for Public Policy Associate in Sustainability and Environment Impact (Fischer, 2016).
UberPool is Uber’s form of carpooling. Customers share their ride with strangers and split the cost. This is the cheapest Uber service offered. Individuals who use UberPool only submit their name and credit card information so users maintain their privacy. It is hard to determine how pricing works for UberPool because a complicated algorithm is used. The overall cost is cheaper than riding by oneself. The price per mile in Los Angeles is 5 cents cheaper. Uber policy states that if one were to sign up for UberPool but are not matched, one would still be charged the UberPool rate. While this makes customers happy, Drivers are not pleased because it cuts into their profits (Dough, 2016).
A marketing strategy is a tool used to meet the needs and requirements of customers with clear and specific objectives. There are several techniques and tools that can develop a marketing plan tailored to the company. Since this can be approached in many ways, the possibilities are endless. Regardless of the strategy, three stages must be observed in order for the strategy to be effective (Marketing Techniques, n.d.).
The first stage is marketing research which occurs before any marketing activity. During this period, the appropriate marketing mix must be determined. The three P’s of marketing should be answered: Product, Price, Place, and Promotion (Marketing Techniques, n.d.).
The second stage involves developing is the marketing mix. The correct product or service must be determined and presented in a manner that is aesthetically pleasing to look at and it must function well. It must be set at an attractive price that will encourage customers to purchase the offerings. The goods must be presented at the right place and at the right time. Otherwise, customers will not want or need it. Last, but certainly not least, the target market needs to be aware of your offerings and its availability. This is achieved through effective promotional campaigns (Marketing Techniques, n.d.).
The third stage is perhaps the most important one: evaluation. Evaluation measures the effectiveness and success of marketing activities. Measures need to be put in place that tracks customer awareness and satisfaction (Marketing Techniques, n.d.). It makes no sense to effectively execute an ineffective marketing plan.
Uber’s unconventional marketing approach, while unorthodox, was able to successfully establish its brand in India without the use of mass marketing. Since Uber’s biggest competitor, Ola, had home field advantage in India’s ride share market, Uber had to come up with a creative strategy to gain market share. Indian marketing blogger, Prateek Malpani, analyzes Uber’s five phases of successful and effective market entry (Ramsenthaler, 2016).
When attempting to break into the Indian ridesharing market, Uber first approached influential Indian officials. These officials were able to test drive Uber’s services before posting about it on their social media channels. Because these officials were prominent, well-respected individuals, Uber became a big deal in town before they officially launched (Ramsenthaler, 2016).
The second and third phases consisted of building awareness of their services via word-of-mouth. Uber could have spent their budget on TV, billboards, and media ads, but they chose to invest their budget on campaigns tailored to the Indian culture. Taxi and rickshaw transportation is essential for local professionals so Uber launched The Office Hero campaign that granted discounted and/or free rides to customers who referred a friend. In the third phase, Uber took advantage of India’s rich festival traditions by offering free and discounted rides for special holidays. Through paying attention to local and regional differences, Uber was able to create new services that better catered to the people (Ramsenthaler, 2016).
The fourth and fifth phase focused on the long-term success of their venture. Industry partnerships were formed to enhance Uber’s presence and grow its user base (Ramsenthaler, 2016). These partnerships included Capital One, Starwood Hotels, and Spotify (Fisher, 2016). The fifth phase concentrated on long-term success through cultural sensitivity. Since Uber paid attention to cultural nuances and strategically integrated itself into the culture, they were able to cater changing preferences and business environment from city to city. Uber’s campaign to make Uber trips as safe as possible and advocacy for women’s rights, portrays an image of a “reliable and progressive company (Ramsenthaler, 2016).
Ola is still the leading transportation network in India partially due to their substantial marketing budget, but according to Peter Ramenthaler, do not count Uber out. Uber’s entrance into this market was impressive
Uber’s target market is vast and broad. Their services are for anyone who does not own their own vehicle, are unable to drive, or who needs a designated driver. Uber caters everyone from millennials to the elderly and in between. Contrary to the average belief, millennials are interested in owning or leasing their own vehicles. Because Uber is more trendy than cabs and public transportation, millennials and business professionals especially enjoy Uber’s services. Uber’s services intrigue millennial, business professionals, children, and the elderly (Brown, 2017).
Since its official launch in 2009, Uber has faced a barrage of lawsuits from governments, Drivers, passengers, and competitors. There is no doubt Uber provides a convenient alternative to public transportation, however, the safety of its users has repeatedly been called into question. One of the biggest battles Uber has fought since its conception is the classification of its employees. Uber classifies its full-time and part-time employees as independent contractors, not employees. As a result, Uber is protected from their Driver’s indiscretions. Once such indiscretion occurred when an Uber Driver locked a service animal of a blind customer in the trunk. While this was remedied by requiring Drivers to accept service animals, there are other safety concerns (Kelly, 2016).
There have been several complaints about car accidents, assault, and rape. While Uber attempted to fight these claims because their Drivers are independent contractors, many of these complaints can be linked to Uber’s background check policies. Unlike taxi services, Uber does not require finger print checks but uses their names and social security numbers. Even though critics claim that this could result in hiring known criminals, Uber believes that their method is thorough. Uber’s reasoning for not requiring finger print checks is that it would exclude Drivers who were charged but not convicted of crimes, and it would slow the process for new Drivers (Kelly 2016).
According to Heather Kelly, a writer for CNN, in May a judge ruled that Uber could be held responsible for their Drivers behavior even though there are independent contractors. This may be due to a lawsuit brought against Uber in July that claimed that Uber was negligent to a woman’s rape in 2014 (Kelly, 2016).
A California woman sued Uber Technologies in July for negligence that led to her being raped. The 27-year-old claimed that after a night out, she took an Uber to her boyfriend’s house but she never made it. Instead, she woke up the next morning in her bed with a condom wrapper on her nightstand. According to the victim, the last thing she remembered was drinking a complementary bottle of water provided by the Driver. The plaintiff had no memory of how she got back to her room (Lein, 2016).
The UCLA Rape Treatment Center was able to link Walter Alberto Ponce to the assault. As a result, Ponce was charged with a rape of an unconscious person and assault with intent to commit rape. In addition to this, Ponce served six months in jail and was required to register as a sex offender. One could argue that background checks limit the possibility of something like this happening, but Uber’s policy is lacking (Lein, 2016).
The plaintiff’s attorney, Castillo III, said,
“Right now, their background check largely consists of an online application with no fingerprinting and no in-person interview. Were there more rigorous background checks, or an in-person interview, even if someone had a clean background, it would act as a deterrent against certain behaviors (Lein, 2016).”
Uber made no comment. A possible explanation is that Uber believed that since they had deactivated Drivers who were charged with criminal acts and assisted police investigations, they absolved these grievances. This incident could be considered an irregular occurrence, but this was not the first case of this nature. There was another case in March that accused a Driver of attacking a female passenger who was picked up from a bar (Lein, 2016).
How Customers Are Protected
Uber’s official website assures riders that they are committed to their safety. Ride requests are randomly matched with the closest Driver so there is no discrimination based on gender, race, or destination. To ensure rider’s safety, Driver’s name, license plate number, photo, and rating is provided so customers know who is picking them up ahead of time. When the ride is over, Uber has a 24/7 support team ready to respond to questions about the ride and to help retrieve lost items (Trip Safety, 2017).
Trademarks and Copyrights
“Trademark” is another way to refer to a brand. Purchasing decisions and brand reputation are influenced by trademarks. In her article, 7 Reasons Why Trademarks Are Important to Your Business, Abigail Rubinstein explains why trademarks are an important asset that can grow your business (Rubinstein, 2014).
Trademarks communicate “intellectual and emotional attributes about… your company, and your company’s reputation, products, and services. Even though the design does not have to contain words, it should be recognizable regardless of the customer’s native language. Trademarks make the company stand out from their competitors and increase awareness. Trademarks also appreciate over time, making it a valuable asset as the business’s reputation grows. This can lead to expansion into other industries or new acquisitions. Since trademarks are like real estate, it can be bought, sold, licensed, or used to secure a loan. Trademarks will not expire as long as they are used in United States Commerce (Rubenstein, 2014).
It is important not to confuse copyrights with trademarks. Copyrights protect “original works of authorship” which includes literature, drama, music, etc… Rather than protect the actual product or service, copyrights protect the “form of expression”:
“Copyrights can be used to protect your company’s original creative works, such as your sales brochures, advertising and promotional pieces, books, videos, songs, photographs, and website content, from being used by others without your permission. As a copyright owner, you can control how your work is reproduced, distributed, and presented publicly. Importantly, you can stop others including competitors from using your copyrighted works or works that are substantially similar to yours (Kroninger, 2015).”
Registration is not required to own a copyright, but it is highly recommended. Registering copyrights provides greater protection and potential value in the future.
How Uber Protects Its Rights
Uber’s strategy is to use utility patents to protect its intellectual property. According to the U.S Patent and Trademark Office (USPTO), a utility patent is:
“Issued for the invention of a new and useful process, machine, manufacture, or composition of matter, or a new and useful improvement thereof, it generally permits its owner to exclude others from making, using, or selling the invention for a period of up to twenty years from the date of patent application filing, subject to the payment of maintenance fees (Types of Patents, n.d).”
Uber’s utility patents are for their business methods, but since these methods are called into question and being scrutinized, there is a strong possibility that they will lose its protection if faced with a law suit. Uber has also secured protection for its logo, application icons, and designs. They did this by first trademarking their basic icon design, then by adding various features as they expanded their offerings. In doing this, Uber maximized their intellectual property protection and increased brand awareness. This does seem to be working now, but Ogurchak suggests filing for protection for a “more substantive invention” because these patents are less likely to be invalidated or “maintain its intellectual property as a trade secret (Ogurchak, 2016).”
Uber has a design patent to protect its user interfaces. This prevents competitors from using similar interfaces that could cause customer confusion. Unfortunately, trade design patents last for 15 years. Uber could combat this concern by appealing for common law trade dress protection. Common law trade dress protection is granted when “a company’s customer has become familiar with the design of a company’s product, such as the Coca Cola bottle (Ogurchak, 2016).”
While this is a plausible course of action, evidence that suggests otherwise. Uber is continuously filing utility patents; if this trend continues, it is very likely that by the time the common law trade dress protection has expired, Uber would have changed the design of the user interfaces (Ogurchak, 2016).
Uber has a strong foothold in the ride sharing market and is well protected from competitor infringement, however, a barrage of criminal charges brought against Uber Drivers may cause damage to Uber’s brands and tarnish its reputation. In light of this, Uber has patented a method that imposes surge prices during peak time. This has caused customers turn to alternatives such as Lyft and SideCar (Ogurchak, 2016).
While it is advantageous to protect intellectual property, it is equally important to make sure that what is patented will be useful and beneficial to the company, and that there is a contingency plan for when the patent expires. Uber seems to have grasped the latter, it is having difficulty with the former.
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