Consumer Protection Laws: A Case Study of Uber
Consumer Protection Laws
Conducting business internationally involves more than the difference in currency, time, and language. Since different societies are governed by varying rules and regulations, they have different expectations on how things are done within their borders. Variation in legal and political systems determines the competitive pressure within the market as most organizations prefer societies that uphold integrity. Notably, as a result of the diversity of people, their interests vary, and hence some are focused on making more profits to an extent of breaking the ethical code of conduct. Therefore, consumer laws are derived in the various countries to ensure that they regulate the relationship between individual consumers and the goods and services sellers (Cseres, 2005). Consumer protection covers a wide assortment of areas ranging from product liability, privacy rights, frauds, and other consumers/corporate interactions. Breaking these laws harms the organization since most people tend to boycott their goods and services like in the case of Uber where most people were advocating for “Delete Uber” (Cseres, 2005). Therefore, the general global protection law is meant to enforce the codes of conduct ensuring that every organization is responsible for all the practices throughout their supply chain assuring the consumers’ safety and satisfaction.
Over the past few years, Uber has enjoyed dominance in the United States market accounting for almost 705 market shares for ride-sharing. Additionally, most people have entrusted them with making food deliveries dominating more than 22% of the market (Cseres, 2005). Additionally, since it is less expensive than most cabs, it has been adopted by most people allowing its expansions in all states in the USA. Notably, United States has various laws that ensure consumer protection as they are composed and implemented at both the federal and state levels. Federal consumer protection laws are enforced by various institutions such as the Federal Trade Commission, Consumer Financial Protection Bureau, and the Department of Justice (Budnitz, 2007). These bodies have ensured that the quality of services offered by Uber is high and reliable.
One of the major importance of ensuring the implementation of consumer protection laws is that the regulations ensure every business is held accountable. This ensures that every organization keep a track of every employee’s undertaking, therefore, reducing the chances of consumer exploitation. California has the strongest consumer protection laws due to rigorous advocacy and lobbying by external groups ensuring that the regulations are strictly followed. This has significantly reduced the chances of organizations and employees practicing unethical activities. Notably, the strict implementation has ensured that there are fewer cases of CSR-related issues within the U.S and the few cases are easily identified thereby improving organizational-consumer relation.
Additionally, consumer protection ensures that organizations provide the necessary information ensuring that all interested consumers can obtain accurate, unbiased information about the products and services they offer. This ensures that the consumers can make the right decision concerning the product and services they need to purchase. The regulation within the borders of the United States has ensured that Uber provides all the information on their app to ensure that their consumers are aware of what they are to expect making it easy to decide whether to purchase the service or not (Budnitz, 2007). Additionally, this lowers the chances of consumer exploitation as the application provides the expected transportation cost allowing the customers to weigh which means of transportation to use as per their budget. Notably, utilization of these regulations has helped Uber on dominating the American market as it has created trust between the organization and its consumers as everything, they need to know is provided on the app which is readily available on their mobile phones.
Notably, despite having common consumer protection laws that are manned by the national government, each state has its laws. This has led to economic growth and competitiveness as each state tries to derive the most dynamic and effective regulations that do not only protect the consumers but also encourages the growth of businesses. The security guaranteed by the laws has attracted more investors encouraging competition and innovation as businesses thrive to meet consumers’ demands. Consumers’ demands have been met in several states since due to competition good quality services have been achieved at a fair price. According to the results from research conducted on the American market about the preference of transportation mean, it was evident that Uber is cheaper than most of its competitors while most clients highly rated their services and this has led to their dominance (Cseres, 2005).
Laws allow relations among various countries and states leading to regional integration. With the emergence of laws that protect consumers, Uber was able to develop cross-border and digital trade since despite one’s location, they are assured of their safety. Even though these laws vary from country to country, it helps in building confidence among the consumer leading to most people relying on digital trade as it is easier and efficient. Unlike the olden days when one had to walk to find a taxi, all a person requires is a mobile phone and the cab comes to your location. Implementation of consumer protection laws has ensured that the personal data accessed by these apps as they find one’s location is secure ensuring that the right to privacy is respected.
According to the current trend in business, most people are shifting to online trading since it is cheaper and it exposes the organization to a larger multitude of potential buyers. This one of the major factors that has led to the growth of Uber since they ventured into technology than most other organizations (Budnitz, 2007). Additionally, online trading is easily manageable since it eliminates the middlemen thereby reducing the cost incurred while running the business. Due to the diversity of the market, it allows the consumer to have a wide variety of options to choose from hence encouraging inventions and growth due to competition. On the other hand, online trading has several negative impacts which result from its dependence on technology. First, if not properly managed, it might lead to the loss of the right to privacy since much of the personal data is required while trading. Additionally, since it eliminates the middlemen, it requires every seller to have a detailed understanding and knowledge about the market to make any decision.
Many changes have been made to the consumer protection laws across all states in the U.S. This has been done since the outbreak of COVID-19 to ensure the satisfaction of all consumers while assuring them safety (Lee, 2016). One of the major laws that highly govern any online trading business includes a data protection policy whereby the organization is not allowed to share the information collected with anyone. This one of the challenges that Uber was facing as some clients felt that their right to privacy was not fully exercised by the organization. Secondly, the laws require every organization to ensure that the services or goods they offer meet safety standards. The higher the quality an organization offers, the more likely it is to attract more consumers (Lee, 2016). A complaint was written to Uber to conduct a check on its drivers since there was an increase in the number of people complaining about the quality of services, they received due to unprofessional drivers. Additionally, to reduce the chances of accidents due to overworking, federal governments in the various cities have set a limit on the maximum continuous working hours. Uber requires its drivers to observe this law as a fresh mind assures customers their safety while traveling. Due to COVID-19, the state government has set laws to ensure the safety of all their citizens and visitors (Budnitz, 2007). Therefore, despite the reduction of the number that any cab is required to carry, the government has ensured to set a new fare chart to avoid the exploitation of consumers who require transportation. This law has been developed under MGL 93A which prohibits overpricing as well as the use of the “bait and switch” technique. Notably, at a state level, most of the cities have adopted the Uniform Deceptive Trade Practice Act which prohibits misleading advertising and unfair business practices. These measures have played a major role in ensuring that the right commodity and information is received by the consumers since failure to abide results in punishment as the organization is expected to compensate the buyer for damages (Siagian, 2020). Additionally, other cities such as California have developed a department of consumer affairs that is devoted to regulating certain industries to ensure the protection of consumers who use services and goods from these organizations. This helps in ensuring that there is a closer look at specific aspects of consumer protection.
To remain as the ride preferred by many across the United States and the world, Uber needs to instill changes in how they operate to ensure they fully abide by all the set consumer protection laws. This will play a part in ensuring they solve all the recent CSR-related issues that the organization has been facing across major cities in the U.S. The first step in resolving this include the development of a committee that analyses the various market in which they operate to determine their charges per mile (Lee, 2016). This would ensure that all the customers are aware of the fare charts hence reduce the chances of anyone getting overcharged. Also, since all information is readily available on the app, the chances of any employees using the bait and switch technique on customers would significantly reduce. Additionally, this would aid in ensuring that the company stays aimed at achieving its general vision rather than making profits. Secondly, there is a need to ensure the adoption of the latest technologies in the market that ensure data protection of all consumers. Most people share their information with only the organizations they believe can protect their privacy and hence there is a need for Uber to ensure that the trust of those who entrust them is not broken due to data loss or leakage. This can be done by ensuring that movement tracks of the customers are not stored as the systems may be hacked if one is in need of tracking an individual’s movement. Notably, any changes in the organizational functioning and charges should be made available to all the customers to ensure that all potential buyers have the right and latest information. This would reduce the chances of disagreements as all consumers are fully updated. Additionally, this would save the organization from incurring unnecessary costs that result from lawsuits and damage compensations due to wrong information.
Notably, there is a need for the organization to update their channels of hiring to ensure they only fetch the best from the market. This would help them abide by the laws requiring customers’ assurance of safety as there have been constituent complain by some who were harassed by the drivers (Lee, 2016). Such occurrences may lead to the loss of trust by the clients making them opt for more secure taxis. To achieve this, the organization requires to set a standard that every driver is required to meet before getting hired. Additionally, there is a need to ensure capturing of personal information of all their employees as this would ensure that in case there is a complaint they can easily identify and take legal actions against the driver involved (Siagian, 2020). Notably, they should also develop a performance tracking app to identify top performers and reward them as this would motivate others to work better and improve their services.
Uber offers higher customer satisfaction services as compared to traditional cab companies and hence their success is highly dependent on performance and accountability. Notably, its operation is highly dependent on technological advancement, and therefore there is a need to ensure they stay at par with the latest developments. One of the major challenges that Uber is expected to face especially in most developed countries’ cities is the introduction of self-driving cars by Tesla. There is therefore the need for the company to develop a strategy that will ensure that all their customers are loyal and hence would not opt for driverless vehicles. This can be done by ensuring they instill measures that improve the relationship between the clients and the drivers (Siagian, 2020). There is still an enormous opportunity for growth if Uber advances with the current trends in technology to ensure more customer satisfaction due to effectiveness and efficiency.
References
Cseres, K.J., 2005. Competition law and consumer protection (Vol. 49). Kluwer Law International BV.
Budnitz, M.E., 2007. The Federalization and Privatization of Public Consumer Protection Law in the United States: Their Effect on Litigation and Enforcement. Ga. St. UL Rev., 24, p.663.
Lee, P., 2016. Understanding information asymmetry among investors in online trading environment. Journal of the Korea Society of computer and information, 21(1), pp.139-146.
Siagian, V., 2020. Customer Expectation and Customer Satisfaction: Reviewing Service Quality of UBER. JKBM (Jurnal Konsep Bisnis Dan Manajemen), 6(2), pp.209-217.