3
Ethics and the New Business and Labor Organizations

The objective of this chapter, parts of which can also be found in [MAS 17b], is to study how ethics can be applied in new business organizations in the domain of marketing, distribution, transportation and logistics and through the “sharing economy”. Indeed, online businesses (such as Uber, Airbnb and BlaBlaCar) and businesses based on the sharing of goods and services and new types of barter represent a paradigm change: they lead us to re-think and consolidate new ways of working and then to re-design business models, as well as jobs and work organizations. However, since new processes always have a low reliability, mainly during the initial learning period, ethics will appeal against future deviances. It is a question of sustainability.

3.1. Preamble

In [MAS 06], we studied the behavior of cellular automata and the concepts of complexity were highlighted: these depend on the network’s K-connectivity as a function of the network node granularity. This peer-to-peer system can be used to integrate more or less hierarchical relations between several production units. Thus it is possible to obtain and compare the behaviors of various chaotic, nonlinear dynamic systems (NLDS) with feedback loops.

Since the beginning of the 1990s, the objective of IBM management has been to explore the possibility of developing advanced production management systems (CAD/CAM) on the basis of a network of laptops, to evaluate the load and availability benefits of computer resources [MAS 91] and to set up an extended information system for suppliers and subcontractors. The three criteria already raised for networking (in addition to security issues) were the availability, reactivity and granularity. This preparation was essential to anticipate changes in Web culture as well as adapt to disruptive phenomena such as that of Uberization. Indeed, with the evolution of future manufacturing facilities, and the worldwide context, each person or entity will be requested to be more flexible and adaptive. Thus, the value of a manufacturing or production center is now focused on the collaboration characteristics of a network, the self-reconfiguration of the whole and the continuous vocational re-training of workers as well as the creation, albeit unsteady, of jobs [VAL 07].

The evolution of concepts is quite simple [MOK 16]: in our modern civilization, we first bought food on demand, as a service. Then, we acquired products on the shelf – like equipment, or more sophisticated products like a car. Now we can buy electrical energy on demand, just to plug in a socket. This is the same for our water supply, too. In information systems, we download software and pay according to usage. This becomes valid for any service: cleaning a house, cooking in a kitchen, hairdressing, general accounting, car transportation, entertainment and so on.

We are living a more in-depth paradigm change from:

standard products → customized products → personalized products → embodied (personification) products.

At present, thanks to the Web and 3D printing, we can directly buy goods and services without going to a big departmental store. Within this framework, we will address two new types of labor organization which are the consequences of the emergence of new marketing systems:

  • – Web-to-Store (WTS) is a concept in which many department stores are involved in order to match the competition coming from the “online store” (featuring some actors such as Amazon or eBay that are well known for selling goods). The Web-to-Store concept is now approved by more than 63% of consumers.
  • – Web-to-Store is now extended to the concept of Web-to-Virtual Store (WTVS) by means of actors such as Uber and Airbnb, whose activity consists in providing services or sharing goods between customers.

Ethics will not be able to affect the move, especially when society is ready to accept any advances for reasons of greed and individualism, but ethics can favor the global interests of customers and workers.

3.2. The context: new BDIs of the population, new opportunities

Clearly, the world of today is interconnected. Everyone can interact with everything. The entire world can share information, objects, goods or services. All stakeholders have become dependent on social networks. Users, producers, suppliers, logistics and financial systems have become dependent on information systems in order to develop life, wellness, comfort and ways of living.

Paradigm changes often come about at the lowest cost, through the use of open-source solutions and collective intelligence that has become the means of creating or shaping spaces for unexpected social and commercial interactions. This new complexity is linked to the theory of networks and leads to states (attractors) which we do not (yet) know either the nature or the size and horizon of such complexity. We only know that it is a new economy based on new organizations, different aims and different business models, which appeal to different notions of value addition, different needs and different outcomes.

In the future, everything depends on our ability to respond and adapt to new situations. Everything depends on the nature and the importance of cooperative and collaborative platforms. All the initiatives that will emerge from collective actions, decentralized sets of Web applications and the possibilities and opportunities of blockchain technology will create ethical problems because we are immersed in new and uncertain environments.

The Web-to-Store concept and its sub-field are now two new marketing modes that drastically change the work organization and jobs of the technical dealer support or the salesman, service provider, self-employees and so on.

To better implement WTS and WTVS, it is advisable to use the blockchain system, as it is considered to be a distributed and consistent database that maintains a continuously growing list of transactions and records called blocks secured from tampering and revision. Any compatible client is able to connect to the network, send new transactions to it, verify transactions and take part in the competition to create new blocks and obtain competitive advantages. It enables decentralized applications under both principles of openness and the constraints of security.

Despite this, there arises the problem of security, individual responsibility, the distribution of goods and well-being, happiness and property and so on.

3.3. Major changes in the shared and collaborative economy

In [MAS 15a], it was suggested that there is a gradual tendency, across all operational sectors, to favor usage over possession. This is equally as true for transport and/or accommodation as it is for decoration, catering, even clothing and so on. Many examples of major agencies that share or rent goods can be cited, such as Uber, BlaBlaCar and Airbnb.

This movement is part of what is called the shared or collaborative economy, according to the relevant context. This approach tends to prolong the current trend of hyper-consumption. Given the trend favoring usage over possession, this approach requires less investment and cost sharing. This makes it more likely to be used by an increasing number of consumers.

The market sphere of the networked or collaborative economy no longer concerns only the sale or availability of goods or services at the level of the consumer; thanks to Big Data, it also relies on more intimate and subtle spheres of mankind: our sensibilities, lives, identities, tastes and also values. Therefore, we are embedded in a pervasive and data-intensive computing, characterized by the volatility and heterogeneity of data and the dynamic management of available resources. This is also a big concern in terms of ethics.

It is for this reason that the collaborative economy is no longer centered on an individual in a globality (as it was before) but on the physical, emotional and psychic components of mankind, that is to say on the physical and cognitive data. This has led to a paradigm shift in favor of a new set of objectives.

A second change of paradigm for the rules of competitiveness:

  • – In the past, in order to win industrial contracts or within large organizations, competition took place between B2B companies, which had factories, offices and employees in structured sets whose units had a strong granularity.
  • – At present, with the use of networks and virtual service centers, P2P is developing. The “competition game” now takes place among entrepreneurs, employees and foreign workforces. All are more reactive, free and available, though less defined and less protected, systems: as soon as a philosophy is oriented toward the “on-demand service”, the granularity of the system is quite low and the vulnerability of each node or agent is high.

In this chapter, we will try to address some business ethics problems associated with these new modes of activity. We will also discuss concepts related to organizational complexity, the theory of change and the behavioral complexity associated with the allocation and distribution of resources.

3.4. Concepts: some definitions and recollections

3.4.1. The WTS is a modern market organization

The goal of the Web-to-Store concept is to provide services to the user looking for the fulfilment of a need on the Internet. At that time, several possibilities are open to them:

  • – invitation to the retail store to see and discover the products;
  • – ordering online and going to the store for a direct pick-up (drive system);
  • – ordering a product or a good online and receiving it at home.

The ranking of these offers is essential. Firstly, Web-to-Store consists in doing everything possible to convince the customer to enter the shop. Nevertheless, the customer is also provided with the ability to shop through conventional e-commerce, to avoid losing a sale, if the consumer cannot move.

Finally, the third option is “online shopping”: it has completely redefined the way people make their buying decisions. The Internet provides access to a lot of information about a particular product, which can be looked at, evaluated and price-compared at any given time. Online shopping allows the buyer to save time and money. According to technology and research firm Forrester, mobile purchases or m-commerce will account for 49% of e-commerce, or $252 billion in sales, by 2020.

Behind the notion of ethics, business is based on the “click & collect” concept executed either in the store (with the help of a marketing consultant) or directly from the Internet to the “drive-in” of the departmental store. In that case, the skill required for the warehouseman is to “pick and pack” but this has to be done very quickly.

WTS is a recent behavior and an alternative to online shopping. Many consumers are supporting the WTS marketing system. It plays a complementary role to the “online” and “offline” and represents a multichannel marketing system: it can be modulated according to the habits of the consumer, the product sought, the urgency of their purchase and so on.

As consumers evolve, they like the experience of buying goods in a departmental store. The retailers have not yet integrated these behavioral changes and underestimate the contribution of digital services. The Internet is now an essential contributor to their business: the Mappy company (a GPS company headed by Bruno Dachary) continues to educate retailers, every day, to this new WTS digital opportunity and will continue to improve its devices according to the evolution of customer needs.

3.4.2. Web-to-Virtual Store

The term “uberization” was popularized by Maurice Levy in December 2014 during an interview with the Financial Times, via the Tribune, in France. The CEO of Publicis said he was afraid of being “uberized” by the competition [CUN 14]. In fact, uberization is equivalent to the well-known gig economy.

This expression is wholly inspired by the application of Uber for renting passage in cars with a driver by positioning itself as an “alternative” niche that is complementary to that of taxis.

The concept of Uber is quite simple: Uber directly connects taxi drivers and consumers, without using a taxi company, via Web browser or smartphone app. Customers can order a taxi (or a common car driver) using automated software and see how other users have rated the driver.

It is the same strategy with the sharing economy: we are renting or subleasing various services, goods, objects and so on belonging to individuals or semi-professionals at a lower cost.

image

Figure 3.1. Stakeholders of an “Uber” system

The smartphone represents the activity of the Web server (call/services management). It is an evolution of the conventional economic model based on direct relationships between customers and service providers. In some similar situations, Airbnb for instance (renting private housing and accommodations), “dynamic pricing” is widely used.

On the left side of Figure 3.1, service providers (taxis) are represented as a virtual storage of goods/services. We call this marketing mode WTVS.

WTVS is often considered by the customers as an improvement in terms of reactivity, efficiency and effectiveness.

Uber has been introduced in more than 50 countries and has led to some commotion. The firm has been criticized worldwide for what some have described as aggressive alternative business practices. In many cities, local cab firms and drivers have staged protests against the service.

In regards to ethics, many people consider Uber, and Airbnb, an unfair competition for similar “private taxi agency” services trying to compete with existing licensed taxi companies: are the passengers well protected? Are Uber’s drivers licensed taxi drivers? [KEL 14] In what follows we discuss some characteristics relevant to uberization.

3.4.2.1. Digitalization of the economy

Digitization of the economy (sharing economy, cognitive robotics, uberization, 3D printing, etc.) is still in its infancy (left side of the graph in Figure 3.2) and fosters massive development of large companies offering a service via an application or website (such as Uber, Airbnb, BlaBlaCar, Amazon and Alibaba). Digitization is not simply the automation of process equipment. When associated with Big Data, it allows for a change of paradigm. It changes our ways of thinking, which in turn affects the economy or the way in which business is done.

image

Figure 3.2. Economy, status and trends

(source: http://digiacademy.org/readings/Ch3_Trends_set.html)

3.4.2.2. Collaborative consumption

Rachel Bostman [BOS 10] describes collaborative consumption (CC) as the sharing of goods and services as well as the implementation of this type of sharing. CC allows anyone to enjoy a property without being the owner. For example, renting a room via Airbnb and carpooling fall within this framework. The rental of works of art and the loan of evening outfits, resources or furniture are also involved. “It primarily changes the way you consume; we see the impact from the uptake of smartphones and the Internet in our everyday lives” says Frédéric Mazzella, founding president of BlaBlaCar. Today, nearly 60% of French people are using these services.

3.4.2.3. The sharing economy

An economy of sharing generally includes all the intermediaries born of collaborative consumption, keeping the examples of Airbnb and BlaBlaCar in mind. These actors have merely institutionalized practices that have been common for years: for example, BlaBlaCar simply modernized hitchhiking, just as Leboncoin replaced newspaper advertisements. These platforms intend to secure exchanges, thanks to a system of user notices and internal controls.

More specifically, our economy of sharing is called: the ‘sharing economy’. In this economic model, people are able to borrow or rent assets owned by someone else, or to do barter. The sharing economy model is most likely to be used when the price of a particular investment or asset is high and when its utilization rate is low.

3.4.2.4. Development Economics

The sharing economy is partly linked with the so-called ‘development economics’ recently highlighted. It is also a kind of subset of economics that focuses on improving the economies of poor and developing countries. It considers how to promote economic growth by improving factors such as health, education, working conditions, domestic and international policies, sharing assets or investments and market development.

Compared to macroeconomics and microeconomics, we could say that the sharing economy addresses factors related to meso- and microeconomics, while development economics covers principles more linked to micro- and nanoeconomics (for instance microcredit, an extension of very small loans).

In regards to development economics, the theories, policies and methods that can be implemented and used will not be developed in this handbook related to ethics.

3.4.2.5. Participatory financing

If this expression does not mean anything to you, its equivalent will certainly be more meaningful: crowdfunding is a method of financing open to all via an online platform. It allows people to commit themselves financially to a project that attracts their attention. Participatory financing can be done on the basis of donation; either the investment takes place without any return or a material counterpart is offered to the donor.

3.4.3. Characteristics of the new ways of working

In comparison with conventional systems, uberization is not the only alternative approach; it is a destabilizing and disruptive economy. The next figure shows the conventional transportation paradigm for comparison with Uber.

Recent conflicts between regular taxi companies and UberPop have highlighted the difficult adaptation of certain sectors to the economy of sharing. Structurally and culturally speaking, a very different architecture has emerged, as seen comparably in the figure below. The conventional process used a functional, well-structured, sequential and low-reactive architecture.

image

Figure 3.3. Stakeholders of a non-uberized (conventional) system

This new concept is not a revolution or insurgency against the conventional system. These are simply new usages to which older systems must adapt in order to continue living. In this sense, it is an opportunity; nonetheless, it is necessary to re-design the conventional processes, even if we consider this a phase of transition. The following are the problems to be considered:

  • – Consumption is essentially increasing, as a new category of clients with new needs is appearing.
  • – Consumption is different because the psychological and social needs of the new economy have a direct influence on the business. Also, commercial solicitations are different (e-marketing is adapted to the new society).
  • – The pressure on consumers is permanent and diverse. It is estimated that subliminal suggestions (advertising) are 300 times more frequent across the Internet than in conventional marketing. E-marketing is much more elaborate, suggestive and sneaky today than it used to be (when it was more direct). Today we know how to convey materialistic, individualistic, psychic and hedonistic values that influence intra- and interpersonal relationships.
  • – The collaborative economy is driven from the bottom-up. Initially, it was developed around an alternative discourse. It was issued from urban social circles which requested an ethics of reciprocity, a valorization of the social bond and even a demonetization of economic relationships. However, like with any new concept, it is first and foremost a “good idea” which then becomes an ideology. Hence, it becomes a source of business opportunity and thus comes under capitalism.

3.5. Key factors of the new economic models

In social networks, as for uberized systems, any consumer or Internet user has authority. The consumer always emerges a winner as he has at his disposal a wide range of products able to meet his needs. By contrast, the supplier is faced with a strong, well-organized and powerful competition. Therefore, they must reduce their margins, can no longer invest, cannot fight and become highly vulnerable.

As a result, we are more and more departing from a so-called win–win system that is replaced by a predator–prey system. As described in Chapter 4, it is the worst system we could have.

The collaborative economy, through its prospects linked to the sharing of goods, participates in the end of programmed obsolescence. With uberization, we move toward the economy of use, centered on functionality and not quantities. In terms of ethics, it is sometimes more sustainable but not imprinted with justice.

Similarly, in the spheres of energy or computers, people are billed for usage (energy consumption or computer resources implemented in the processing of information). The mode of advertising used by car manufacturers emphasizes the same: it is the promotion to use cars in leasing mode, which allows a customer to access products that he/she cannot or does not wish to possess. The scope of the collaborative economy exceeds what it is at the outset. It marks the beginning of profound economic changes. The notion of money, capital, immobilization or investment in the client disappears in favor of time: the user benefits from a good or a service for a given duration and at a lower cost.

The Uber economy is an on-demand economy. It is a normal evolution based on the ubiquitous use of computing (e.g. smartphone platforms) to provide work and accessible services to a large number of people, in a large number of new areas.

The use of a platform such as Uber radically changes the ways of thinking and working: for all these types of activities, there is no need for offices or full-time employees. The size of a team and the skills of workers are easily adaptable to different tasks, regardless of their duration and location. Indeed, we can complete the skill organization, in cases of overload, with additional self-employed workers. There are probably more exciting work opportunities but they are more risky as there is no more stable employment.

3.5.1. Networking and the uberization of operations

In [MAS 15a], we highlighted the fact that complex networks have a remarkable property called self-organization. This self-organization is the site of new, spontaneous, fast, diversified, self-sustained and unexpected emergences of the NLDS type. These emergences are the facts of mutual influences, brainstorming-like actions, aggregations, clustering and pattern generation, as seen with uberizaton. What is important to note is that these emergences – unpredictable – are of the type BDIN (Belief, Desire, Intent, Need) [MAS 06] and arise from the activity of networks (social networking, the Internet, etc.).

More precisely, the objective of Uber is to provide an efficient way to satisfy an emerging societal demand, namely providing a means of transportation to a specific location (home, workplace, etc.) as fast as possible, at optimal cost, associated with specific features/services and a positive experience for the consumer. But what about the supplier or service provider?

Due to feedback effects, such a phenomenon can only accelerate as it fulfills new societal opportunities. However, with Uber, leboncoin, and so on, it is no longer necessary to possess a good or resource. They are associated with less investments but also new models of consumption and new usages of resources and services, and this is a fundamental change in our business models and habits.

Due to new benefit/cost ratios, there could be an over-consumption insofar as these emergences are more numerous, faster and more ephemeral. They must adapt to the capacities for acquisition (purchasing power, cognitive potential, cultural context, etc.). The goal is to be able to satisfy the maximum number of desires as quickly as possible: eating, using a vehicle and so on. These phenomena are observed through the number of transactions carried out by the websites dedicated to these types of activities: this involves either renting between individuals, carpooling, online shopping, crowdfunding, wedding gifts or organization and everything else.

In terms of ethics, how can we control the business model transition? How do we share benefits and results? How can we define duties and taxes? Indeed, four major points arise:

  • – the growth of consumption and expenses also contributes to quantitative over-consumption in a society (pollution, sustainability).
  • – Sharing economies (same as for collective systems) lead to reductions in production and service costs (thus, better consumer resilience).
  • – The goal is not to generate under-consumption but to produce a different distribution of investments, expenses, revenues and so on. The happiness of some makes the misfortune of others.
  • – What are the new links between justice, equality and predator–prey systems?

Once desire is created, it must necessarily be able to satisfy need before it dissipates, as well as be able to detect weak signals, integrate them quickly and develop promotional marketing and flash sales to force consumers to make a decision very quickly. This is not that some call “anticipation”, which is a non-temporal concept.

In regards to ethics, we also have to consider an Uber transaction as a “flash sale” or an auction: it is either low net-margins or dynamic pricing that apply. How can we evaluate the global or sustainable benefit or loss for the whole?

For many people, faster and faster consuming practices seem to top off “happiness economics”. However, in [MAS 17a], we showed that the economy of pleasure (as opposed to happiness) does not make us any happier.

3.5.2. Positive and negative impacts of uberization?

Uber and social networking can generate new profitable activities which challenge traditional business models, reconfigure ways of working and change the distribution of results in terms of profit earnings, “on-demand” services and needs, financial charges and constraints. Everything is displaced or relocated.

The networking of individual service users (in a P2P mode) makes it possible to fulfill new needs in a much more competitive way, to implement them differently and to reward in an innovative way the added value of an action or service provision (in general, the payments are partly decreased due to the lack of organization among service providers, while the competition among unorganized suppliers is increased). For instance, for Uber driver the level of risk is higher and earnings are lower; by contrast, they have a job and they can rebound or upwardly mobilize in their social life.

Similarly, the practices for the mutualization of goods have had a positive impact on the environment, as they lead to lower production and optimization of the existing usage. Therefore, alternative economic approaches are available that are complementary to those already in existence: the challenge that arises is their transition, integration, adaptation and/or convergence. Here, business ethics has to be introduced.

At the implementation level, the consumer benefits from a better and cheaper service. The difficulty arises from the fact that the Uber company/manager is faced with more economic, legal and strategic concerns while the employees, beyond the existing constraints, face legal, cultural, financial and moral difficulties. In terms of ethics, how does one establish a profitable link between all the stakeholders?

image

Figure 3.4. The gap issued from scientific advances

(source: http://thefuturesagency.com/wp-content/uploads/2015/08/man-world-machine-1433643323643.cached.jpg)

3.5.3. The problem of consumer–producer and producer–consumer

Here again, we observe the notions of ambivalence to oneself with regards to self-organization and the phenomena of stabilization in nature. Indeed, in networks including feedback, one of the parameters will play an amplifying role while the other will have a reducing effect. For example:

  • – When the price of a product is reduced, it becomes more accessible to consumers. This results in hyper-consumption and therefore better revenues.
  • – Conversely, when the price of a product increases, it allows the producer to realize a larger financial margin, thereby ensuring resilience. By contrast, this will not generally promote over-selling or hyper-consumption of a product.

The combination of these two properties will make it possible to reach “Nash’s equilibrium” [MAS 08]. This phenomenon is widespread among people: a person working in industry produces assembled manufactured goods of a certain type, sometimes exported, but consumes others that are imported. Similarly, a winegrower produces and exports wine, while consuming other imported foods and beverages.

In all fields, each of us is both a producer and a consumer: categorization is ambivalent. In order to ensure a balanced budget, there is a tendency to increase the selling price of the products developed, meanwhile seeking (even if importing) to purchase products to be consumed at the minimal price.

In the world of social relations we find the same situation with the phenomenon of personal branding, whereby we expose overselves or seek the notion of “image” (through an online e-reputation); the number of “Likes” accumulated or the sharing of scenes that are sometimes intimate can become an important criterion for certain consumers in search of such marks of recognition or likewise suffering from a deficit of image.

This approach also presents the challenges to security, protection, human care and welfare:

  • – the protection of individuals and their personal life (linked to the control of information streaming and the theft of personal data);
  • – the protection of populations and assets security (related to terrorism, spying, etc.);
  • – violations of individual freedoms, obstacles to commonly accepted rules and modes of governance;
  • – confidential industrial data, break-ins or thefts linked to economic data, manufacturing processes and so on.

3.5.4. Underlying mechanisms: differences with the present economic systems

With the widespread use of networks and Web applications, the big change is that work is defined, shared and organized from operational platforms that require very little capital, few human resources, low transaction costs and minimal communication. With these interaction-based systems, we are situated in what might be termed a “minimal” capitalist system.

In other words, new technologies allow for the labor force, itself reliant on the capitalist system, to be exploited by capitalists without any capital of their own, thereby creating a labor force made up of employees who are paid below the value they create. This does not conform to the true value of ethics.

By contrast, after the big Haiti earthquake in 2011, an interactive society was immediately set up thanks to the wide use of MIDs. Clusters of population emerged; in each of them, requests for help, means, skills and tasks were self-organized. This enabled the population to recover as best as they could part of the situation. Of course, there were deviances and excesses but overall it allowed survival and organization in order to overcome the atrocities of this tragic event. This conforms to the true values of ethics.

3.5.4.1. Consequences

In this context, the approaches to governance and institutional and social protection institutionalized after the Second World War have to be reconsidered.

With the P2P concept, individuals are increasingly isolated and alone. This was already the case in large urban centers but now, with the introduction of new technologies, the situation has worsened. The communication tools are not only computers (where face-to-face communication is very poor); they are mainly applications like MMS, tweets, Snapchats and so on; that is, short emotional messages without in-depth emotion, reasoning and feeling. It is just superficial and artificial communication. Thus, outside of the Internet, the individual is isolated! This is the new evil of the century.

In regards to Uber, this is the reason why we find among operators of chauffeur driven cars or among the self-employed the emergence of the need for mutual assistance through worker cooperatives and collaborative insurance companies.

When we observe the differences in situations between the self-employed, craftsmen and the wealthy (working in structured, stable and remunerative organizations), some argue for “egalitarian” (but not necessarily “fair”) compensation according to the principle: “since we are moving towards a world of independents, we need a basic income for everyone and more flexibility elsewhere” [MOA 16]. This argument is probably not very coherent but deserves to be raised in light of the advancements in robotics, which will solidify this fundamental problem of human labor substitution.

3.5.5. A social hypocrisy?

Collective organizations based on social networks developed the concept of P2P that has resulted in the concept of the “low-cost” economy.

This inevitably results in the impoverishment of producers, service providers and enterprises and the enrichment of market makers and consumers. As a reminder:

  • – Moving from a centralized to a decentralized world, the remuneration of the worker can only diminish as it is in constant competition with foreign workers from less developed and even less socially structured regions.
  • – In order to remain competitive, well-established companies will rely on outsourced rather than local staff who cannot fully contribute to the “lean” objectives of e-commerce and reactive services.
  • – In Europe for example, the labor market is changing faster than the change of thought patterns. There are no social rules to standardize practices. Nor is it necessary to ensure equity and protection between permanent and independent employees, between Western and Eastern companies, which are themselves “disrupted” or in competition with other regions, such as Ukraine.

For a government, the points raised above are usually considered independent (in terms of non-complexity and in the name of reductionism) and minor because they can nevertheless increase the satisfaction of the citizens (electors). Below are three such reasons, which all relate to governance:

  1. 1) These points are too complex to solve (interconnected systems are looped and nonlinear) and international-type interactions are notoriously difficult to master. System analysis is not the strong point of politicians.
  2. 2) The result of elections is influenced by consumers. It is important, in the distribution of resources, to give greater priority to the consumers (who vote) and to preserve their purchasing power and overall satisfaction at the expense of the producers who only represent a few percent of the population, even if this leads to the latter being brought below the poverty line.
  3. 3) The economic battle is taking place at the level of the supply chain. For example, China has implemented strategies to secure its supplies of heavy metals and rare materials. Similarly, Russia has ensured and developed its energy sources and many nations in Africa have raw material deposits. Some countries (e.g. France) possess strategic raw materials in the form of food products but neglect them by allowing distribution systems to plunder farmers and producers of agri-food products. However, neighboring countries with better global governance in place promote better interaction between upstream and downstream processes linked to collaboration and the sharing of responsibilities, all based on forms of cooperation rather than competition [MAS 17b].

The general problem lies in the fact that by betting and focusing only on local and dynamic situations, the global situation gradually deteriorates. A simple example of this is in economics, when a country is 3 months behind in the payment of its debt or in implementing innovative processes because of lax behavior and policies, it is thus necessary to give strong efforts and to overwork for longer periods in order to catch up with the delay.

Also, at the urbanistic level, when a mayor decides to limit car traffic by reducing lanes, obstructing road traffic and saving some money to make environmentalists happy, it is a hell he is preparing for future generations 50 years later when the density of city populations has doubled and it will be impossible to move.

It is not ethical at all.

3.6. The P2P management rules

The uberization of the economy presents the challenge of “liberalism or freedom”: in a context where each individual demand is dealt with directly by a single provider, there is no corporate grouping, small batches, negotiation of prices and so on.

In the case of the shared economy, the system is no longer centralized; it is decentralized. It comprises a call center (e-service) that collects and manages demands directly with service suppliers. In a free competition, this could lead to conflict where everyone is against everyone, to domination by the strong over the weak, to social confrontation (and thus disorder) and to false senses of freedom, inequality and sometimes increased poverty just as dangerous as that generated by capitalism if left unchecked. The mode of operation required in an uberized process is the computer system: we are thus witnessing the realization of a computerized server model for automatic service with the integration of ethical rules of conduct (to avoid an anarchy).

3.6.1. Ethics, liberalism and autonomy

The specific liberalism we are referring to when talking about uberization is superimposed on to the rigidity of the conventional (and administrative) information system. Indeed, in any conventional IS (in politics or in production fields), there are legal and social rules that have to be followed by the users in order to enforce and standardize all the possible situations encountered by people in the system. These rules are based on the respect of the individual, his/her sensitivities, his/her own property and so on. Behind an information system there is always a kind of materialized system of production, without any sensitivity, associated with a disembodied organization and so on.

With Uber, the approach is different. The worker who answers a demand and fulfills it is a human being. We cannot express empathy toward a nonliving production system. However, we may despise a person. Similarly, even if the situation becomes stressful, we shouldn’t offend a person who, on behalf of the call center where he/she is working, contacts and requests you. The first rule is to respect the individual who works to get his crust.

In all these cases, the jungle effect is avoided on behalf of ethics. When a business opportunity occurs one must ask: how can we simply organize a new system to optimize the management of an assignment problem, to the best of available resources or skills? How to share the advantages and disadvantages? How to manage shortages and risks?

Any system operating according to the law of the strongest through coercion, physical or moral constraints and so on is not resilient, in the same way that the fox who kills or devours all the hens in a henhouse with full impunity is neither liberal nor ethical.

In order to ensure respect for the rights of everyone, in every sector of activity, the liberal system operates according to law, legal rules and operational procedures associated with tribunals to ensure this right. When a conventional system is not effective or unable to manage a critical situation, ethics is the only possible alternative.

3.7. Assignments of means and resources

All the management concepts defined in this chapter rely heavily on common planning functions such as distribution, allocation scheduling and sequencing of resources. This can be achieved by using well-known rules based on operation research, the theory of choice and preference or auction and/or game theory.

We will note here that the problem of allocating resources, products or services to clients, or even needs, is a complex general problem. With the development of collaborative platforms and the extension of the P2P concept, new approaches have been developed, notably in commerce and industry. Currently, there is no sale or assignment that is not subject to price negotiation, configuration adjustments and adaptations, so that each product or service provided to a customer becomes a “single product”. Here, the notion of a single or unique product is far stronger than that of the personalized product spoken about a short time ago. We can say that we have entered into the era of “personification” [MAS 17a].

In this context and in view of the fact that in nature and around us, every evolution is based on notions of ambivalence [MAS 15b], we see two types of technology and mechanism emerging:

  • Auction theory. This is the analysis of the mechanisms of auctions and their allocative properties using the tools known to science and social and economic theory, in a context of cooperation and competition [REA 03].
  • Game theory. This examines the strategies of different economic agents (the seller, the bidders, the auctioneer himself) in the face of different types of auctions and socio-economic contexts (collaboration, cooperation, coalition, mediation, etc.) [LA 12].

Within this framework, on the basis of ambivalences and antagonisms, we will quote the Cournot equilibrium, also called the Cournot–Nash equilibrium. This is the Nash equilibrium in a duopoly, including, for example, two players, two customers or two suppliers in competition or in cooperation. Thus, a couple of “strategies” can result in a Cournot–Nash equilibrium if, given the choice of the other player, no player wants to modify themselves. The strategy chosen by each is in effect optimal when taking into account the strategy chosen by the other.

Dynamic pricing techniques are based on such decision-making processes: it is the least unequal approach possible and the most ethical one. Today, the executive boards of large companies, the strategic committees of major telecom or energy operators, regulatory authorities and so on employ such theories as the above to simulate strategic behaviors in cases of market openings or partnerships between players, in oligopolistic sectors.

3.8. Uber: a resources allocation problem

In the management of complex systems, it is important for us to define the underlying approaches and mechanisms related to auctions and game theory in order to see how a strange attractor can be reached, then to compare these converging processes and thus to define how uberization is positioned in relation to classical CAM approaches. Indeed, self-organized approaches are often related to the dynamic re-configuration of production systems, to the influence of interactions, to the anticipation of an event and then to the responsiveness of an answer. This is a main characteristic of the paradigm change required by game theory and auctions.

This questioning can be shown as follows:

As can be seen, these techniques, based on uberized systems, are similar to those used for local control in production management, especially in self-organized systems, where resource allocation is the result of an emergence and an aggregation of available resources around a given agent or task.

image

Figure 3.5. Comparison of several assignment tactics in production systems (© Pierre Massotte)

3.8.1. Ethics

In terms of ethics, to the left-hand side of the figure there are very orderly, pre-programed and planned actions that give little freedom for employees. In this case, the deprivation of freedom of action may prove to be restrictive, even degrading or authoritarian. On the right-hand side of the figure, only sequencing at the level of instruments is automated and a greater autonomy is assigned to the production system, which makes it possible to value the role of human beings, who remain in back-up system management and can intervene to adjust the operational management of the production workshop. The second option is therefore preferable from the human side, knowing that the risks are limited (in both cases, meta-rules avoid any unexpected deviation); the distribution of profits and losses for each stakeholder category has to be re-balanced.

Such new ways of working are very convenient for millennials (those born after the 1980s). They benefit from this opportunity which fits better with their aspirations, such as faster decision-making processes, integration into communities that interchange their needs, knowledge, resources, data and feelings, and who help each other regardless of the level their skills as soon as they can share them through a community. It is also a return to basics in nature, where the stronger imposes itself to the detriment of the weaker. It is therefore the responsibility of ethics to behave in an inclusive manner by avoiding systems in which some are left behind (the people “excluded” from society). It is a problem of justice and not of equality.

3.8.2. Simplexification

When complex systems with many agents associated with many interactions are available, the search for a solution quickly becomes unmanageable (the path of convergence is too long). The first reaction should be to “simplexify” the graph of the model. Indeed, what is important is to limit the number of interactions (the k-connectivity), as specified in Chapter 11 of Volume 1 [MAS 17c].

In game theory, and particularly with respect to non-cooperative systems, the approach is the same. In the field of complexity control, we can mention the introduction of the “medium physical field in game theory” by P.L. Lions and L.M. Lasry [LAS 07, GUE 11] in a new approach called “mean field games” (MFG). It allows one, when near the limit conditions, to highlight and check the uniqueness of asymptotic Nash equilibrium and thereby to detect disruptive events and to anticipate them in order to preserve inclusivity in a society.

3.8.3. Complexification: influence of the cognitive approaches

In addition, as we recall here a few concepts regarding the learning of cognitive system systems, we will specify that in game theory (and by extension, in the domain of process Uberization), as described in the sustainable systems [MAS 15b], the evolution of cognitive systems must be viewed holistically.

Below, we will limit ourselves to specifying that in any decision support system, mathematical rationality alone is not sufficient. Indeed, we always make decisions by activating three parts of our brains [MAS 17a]: the frontal neocortex, the limbic brain and the enteric brain. These are highly interconnected and aptly show how every decision we take is a complex and dynamic process; the interactions between each part of the brain are altered by the thousands every day.

Thus, our knowledge, experience and know-how constantly evolve and quickly make any decision support system stagnant. This explains why a perfect system will never be obtained, which corroborates the conclusions of Chapter 2 in [MAS 17b], devoted to the chaotic behavior of production systems: the important thing is not to get the optimal response to a given problem (not forgetting that NLDS systems are unpredictable) but rather to obtain a good and quick response to a problem.

3.8.3.1. Consequences: impacts on decision-making processes

It must, however, be conceded that these “perfect information” assumptions are rarely transposable to reality; this implies that the choice of an optimal bidding procedure is far from a “false problem”. To highlight this difficulty, it is sufficient to list the following examples:

  • Aversion to risk. In second-price and ascending auctions, the optimal strategy of the players remains unchanged (the actual private valuation of the property). With regard to the first-price auction, the player who is averse to taking risks is more aggressive. It is therefore beneficial for a neutral seller to proceed with a first-price auction when they are faced with risk-averse players. This means that first-price auctions lead to higher prices when players (buyers) are at risk.
  • Correlation. It is an ubiquitous habit to consider agents as being independent and non-communicating. However, cases where the private information of the players is not independent of the information obtained by the other players, the ascending bids [MYE 81] generate higher anticipated prices than those of the closed auctions using the second-price system. The latter, in turn, generate higher anticipated prices than closed auctions using the first-price system. Similarly, if the seller has information, the best option would be to reveal it to the other players in order to raise the anticipated price (by linking the value of the information to the anticipated price).
  • The curse of the winner. When the available information is incomplete (in value), the player knows that he is the winner when he has the highest signal. The winner is likely to pay more than the worth of the item in question. In other words, if it is estimated that the average of players’ estimates reflects the true value of the object, then the winner has surely overestimated because they have paid more. In general, the curse of the winner gets worse as the number of players increases. To avoid this situation, bidders review their estimates downward. The best-known examples are those related to the allocation of offshore drilling rights, where it is difficult to estimate the volume of fossil-fuel reserves in a given oil field.
  • Asymmetries. The values of the goods and services attributed to players are not necessarily derived from a normal distribution: there is often asymmetrical information between players or abnormal distances, which distort risk and uncertainty. We can quote two passages from Paul Klemperer [KLE 99]:

    “Collusion, a practice that modifies the interactions between actors: this is a phenomenon that distorts the estimated optimal price; in this case, a few players agree on a price that is not to be exceeded, thereby avoiding overbidding so as to obtain the object, resource or good at a lower price than normal”.

    “The estimated price or utility value of a resource, the bid price of the auction and the number of players also affect the auction, and therefore the final purchase price of the item acquired”.

3.9. Business ethics: a resources allocation problem

The uberization of society (toward a gig economy) is mainly based on the trivialization of P2P approaches and the equitable allocation of resources. The question thus becomes very simple: can we allocate and/or distribute goods and resources in an optimal and consistent way, for a system comprising several beneficiaries or clients, under normal conditions? Can we model and automate the notion of Ethics?

We will just remind ourselves that interaction in social networks complexifies the distribution, allocation and assignment of resources: the bias induced at different levels of the operational management provides several uncertainties. This means that the approaches implemented in the new economy, even if they generate new opportunities to the benefit of the consumers, are far from being perfect and still cause ethical problems.

Under normal conditions, most complex systems have limited capacities in terms of resources or stocks (to make it clear: many of the rules usually implemented apply to systems with no capacity limits). They are submitted to strong constraints (depending on various strategies, objectives and methodologies). The second point to remember concerns the diversity of constraints, factors and actors involved in decision-making systems.

3.9.1. Business ethics and goods assignment

Thus, there is much tuning to be made at the level of the parameters to reduce the bias of the results [MAT 09]. Here, the objective is to remain ethical, as best as we can, when faced with the diverging interests of the people involved. Some examples can include:

  • – IBM-France faced the challenge of how to allocate end-of-year bonuses according to the context, the type of employee populations and, of course, according to individual merits. For example, in a marketing unit, minimax approaches are applied (to optimize profit earnings), while manufacturing is subject to maximin rules, in order to minimize manufacturing costs or losses.
  • – When two different customers wished to acquire two different models of a large computer, assembled with components from the Montpellier, Corbeil Essonnes plants in France or even Poughkeepsie in the USA, knowing that the number of optional and available features was limited, the challenge was how to best allocate the shortage in order to satisfy two customers? This is in itself a very complex problem relevant to “inverse” reassignment: for this, we used an approach based on the implosion technique [SCA 94].
  • – How to allocate a certain number of resources or equipment orders between two suppliers or organize customer orders between two end-users so as to fulfill a certain number of objectives and constraints? For instance, in a computer-integrated manufacturing plant, we know that if we have N agents and a number M of resources (or products), the number of possible allocations is Nm. We understand that the order of complexity is of an exponential type, where, for example, N=20 and M=100, and requires a computing power the size of our galaxy! Therefore, simplexification is a prerequisite for reducing the size of the problem and the number of possible interactions between agents and resources.
  • – The complexity of the problem remains the same if auctions are to be carried out not on the basis of a single criterion (e.g. the acquisition price of a resource) as is usually done, but within the framework of multidimensional models of the Black–Scholes type or multivariate preferences typical with Condorcet. At our IBM assembly plants, we used the latter approaches associated with notions of usefulness to define procurement plans and supply strategies.
  • – Finally, as in any economy, the system of purchasing resources through auctions can be replaced by trading based on the barter system. In a barter system, products or services are exchanged with a counterpart that can be a product, a service or money.

3.9.2. Modeling ethics with utility theory

To model ethics and find the best compromise in terms of global benefits, we can use approaches based on the allocation of resources, which we will study here. The main criterion will be based on the notion of utility. To explain some of these mechanisms, we will choose a simple example from [MAT 09], as described by Professors Delahaye and Mathieu [DEL 09].

In terms of utility, we see once again that the notion of “value” to which it is associated has several aspects: these can be financial, emotional, sentimental, psychic (pleasure of owning, etc.) or related to health, well-being, safety, social or promotional (through social networks) value.

Here, the notion of “good” or “right” is very general: it may be in the context of products, services, wealth, time, energy, duties or taxes, technical means and so on. It is therefore possible to imagine several scenarios concerning the sharing, allocation or even distribution of these goods to which we assign a greater or lesser value.

For simplicity, we will highlight only some principles of “utility” theory, as done with game theory in [MAS 17b].

  • – We can imagine that we are looking to maximize the total number of customers satisfied from a pre-defined number of goods (utilitarian viewpoint) in order to maximize the general interest (max-sum criteria).
  • – In a more altruistic manner, we can aim to assuage customers by seeking the allowance which gives the highest satisfaction value to the least well-served agent (maximin). This strategy allows us to preserve social peace and avoid inequities (workers in a production system, a cost center).
  • – We can try to give advantage to the most deserving or the most important element of an organization, for example a “champion”, and ensure that they get the greatest possible satisfaction. This is from an elitist viewpoint, fitting the minimax criteria. Is it an ethical or non-ethical tactic?
  • – Finally, we can try to favor a whole corporation or a group of people (e.g. the sales department of a company) to the detriment of others by giving them preference and therefore the greatest satisfaction (maximax approach). It is a “selfish” point of view that ignores interactions between the favored agent and the whole system. At the computational level the two approaches, minimax or maximax, are similar. This is a kind of “Uber approach” that can, according to the initialization of the control parameters, become exclusive or inclusive again (at which point we have returned to ethics).

In general, if we keep in mind the ethical notions of auction or bartering, or even better, those of game theory, we can implement a method based on the Nash equilibrium which will try to maximize the profits and minimize the losses of ALL the stakeholders, or agents, involved in the resource allocation process. It is, therefore, a kind of shared economy of an individualized type, seeking to share the pleasure or the pain of each one.

The best allocation is that which maximizes the satisfaction level of each agent [DEL 09]. It is thus a maxi-pro type approach which can be described as ethical in the sense that it involves “strong” equity criteria. For example:

  • – It is impossible that some agents, or clients, are stripped or excluded from sharing because if some do not receive anything then the global product of satisfactions is zero.
  • – When we consider two numbers N1 and N2 whose sum S is constant, the product of these two numbers is maximum if N1 = N2 = S/2.

In the case of bartering, it is possible that one of the resource allocations is not suitable for certain agents. For instance, in a manufacturing plant we are trying to reduce, for each product roadmap and each task, the access time of a given product to its assigned resources or equipment. Rationally, we have to proceed to specific allocations through permutations of resources between parts taken 2 by 2. Here, we can use methods based on statistic physics, such as simulated annealing (Kirkpatrick modeling, as performed in IBM, alongside the Boltzmann algorithm). In terms of combinatorics, this process is long and complex and does not necessarily converge at the level of the individual and global optimal satisfaction desired. It is this approach that has been used for the optimization of the plant layout (allocation of spaces and workshops in a factory) through the PLOOT application [BEZ 90].

3.10. Ethics in the business: more perspectives

The search for a good solution can be accelerated (as done in nature, thousands of times per second, on our Earth) through genetic algorithms [POL 08]: a population of candidate solutions (called individuals, creatures or phenotypes) for an optimization problem always evolves toward better solutions. Each candidate solution has a set of properties (its vector of chromosomes or genotype), which can be mutated and altered through a crossover process. Traditionally, solutions are represented in the binary system as ordinal strings of 0s and 1s, but other higher ordinal encodings are also possible. Genetic algorithms, simulated annealing or Tabu search and so on are meta-heuristic methods (within stochastic optimization methods) and part of so-called evolutionary computing [SOU 92]. Here, genetic algorithms are very convenient for solving global optimization problems such as scheduling [MAS 96], finance and swarm intelligence (as discussed in this chapter).

As a conclusion, ethics, regardless of its complexity, is a concept we can model to develop DSS. It is just a question of model adaptation and variable transposal. This is a very helpful way to support management decisions in terms of complex system understanding, highlighting evolution and trends and so on. Considering, however, the structure and the nature of problems to be solved, it is still advisable to look into deep learning algorithms (because of the adaptive approach used in ethics) in order to refine the ethics-oriented problems encountered in the business and decision sciences.

3.11. Ethics in Web-to-Virtual Store applications

3.11.1. Introduction

The recent development of the so-called Web-to-Virtual Store is the result of new developments in economy. It includes the following new marketing or economic opportunities:

  • – The gig economy is part of a shifting cultural and business environment. It is an environment in which temporary situations are common: it is based on a contract between a customer (via the Internet) and independent workers for short-term engagements.
  • – The sharing economy, known as collaborative consumption, is a trending business concept that highlights the ability (and perhaps the preference) of individuals to rent or borrow goods rather than buy and own them.
  • – The gift economy is that in which services or goods are given without an agreement as to a suitable payment or trade to be made in return. Rather than monetary gain, gift economies often rely on intangible rewards like a sense of contribution, community, honor or prestige. Here, people give according to their abilities and receive according to their needs.
  • – The barter economy is a cashless economic system in which services and goods are traded at negotiated and equilibrated rates. It is based on reciprocity and has existed for a very long time. It is the earliest economic system, predating the monetary system and even recorded history. People often participate in barter or other reciprocal exchanges (e.g. goods versus services) without thinking about their impact.

Ethically and sustainably speaking, we do not pay sufficient attention to where our manufactured products, our services and goods, originate: are they made in sweatshops? Did they involve child labor? What about the carbon footprint of the manufacturing plants or shops? What’s the best way to sell or dispatch products or services without financially and morally exploiting either the customers or workers?

Also, in the gig economy, when we call for a cab with Uber or BlaBlaCar, it may seem to be a question of convenience and cost for us but, in terms of choice, is it an ethical and good choice once we consider the customer health, the quality of the ride and the happiness of the driver?

In the following, we will provide some details related to this type of ethics applied to new business modes.

3.11.2. Ethics in the new transportation and moving opportunities

New facilities govern the transportation of goods or human beings. Through Web requests, several advantages and drawbacks appear. The impacts are as follows:

  1. 1) At the economic level:
    • – The taxi industry can be considered as a cartel, and switching or adapting existing organizations toward new businesses has to be handled carefully.
    • – Keeping people safe, ensuring that workers, consumers and service providers are treated fairly and keeping the city or an economy growing and competitive are quite complex tasks.
    • – According to David King in [FIE 15b], Uber is providing a great innovative service. E-hails are very useful and represent an alternative, complementary and competitive way compared to the conventional transportation systems. Here, we should mention that ethics requires us to respect all the users of the various transportation systems. The public space must not only be reserved for the ‘happy few’. When a new transportation is developed it must not be at the expense of another means of transportation.
  2. 2) At the drivers’ level:

    In most business industries, such as Uber or BlaBlaCar, drivers are considered as independent contractors rather than employees entitled to overtime pay, workers’ compensation insurance and so on.

    “Drivers carry most of the costs of their job. For example, they pay for gas; daily or weekly leases; vehicle maintenance and repair; car registration and inspection; fines, fees and royalties; and for ownerdrivers, the cost of the car.” Quite often, within that marketing mode (conventional cab economy, Uber, etc.), it is said that drivers prefer the flexibility that comes from being contractors who can work on their own schedules and for multiple companies.

    According to [FIE 15a], in the “gig economy”, workers found insufficient pay and flexibility as two of the leading causes for leaving such jobs. These are very strong constraints that could be interpreted by some as harassment (physical, financial, psychological).

    It is difficult to define a fixed transportation amount either for Uber or cab drivers: as described in [FIE 15a], even if a driver takes home more money today than he or she might from working a yellow cab, there’s no guarantee that it will continue. Uber has already shown its willingness to increase the commission it takes in certain markets: this is the reason why there are strikes and protests. Many do not understand that the main advantage of such new business is based on “dynamic pricing” [MAS 08], flexibility and reactivity. The financial amount of a provided service is not of key importance.

  3. 3) At the passengers’ level:

    When debating whether to hail a cab or an Uber (or simply take public transportation), the average consumer is likely not giving much thought to whether taxi cab drivers feel overworked or if Uber is hoarding user data, as stated in [FIN 15b]:

    “Uber, at least anecdotally, tends to be in a stronger position in New York in terms of customer experience – thanks to its rating system that enforces better behavior from drivers as well as its fleet of new black cars recently leased and entirely maintained by individual drivers.

    Uber often trumps in convenience as well, by virtue of letting users quickly hail a car through an application without having to flail around on a street corner. There are also now more Uber-affiliated cars in the city (more than 20,000) than yellow cabs (about 13,500), according to data from the city’s Taxi and Limousine Commission (TLC), bolstering Uber’s convenience.

    Price, not surprisingly, is the most debatable concept. Uber initially marketed itself as more of a luxury service. It is therefore assumed to be at least as expensive as a comparable yellow cab ride, with the exception of limited-time promotions, where it tried to undercut cab prices or the prices of competitors like Lyft.

    One survey released in 2017 from the University of Cambridge analyzed rides from 2013 and found that Uber is usually more expensive than yellow cabs for shorter rides under $35, but becomes a better deal for longer trips.

    That may have changed more recently: Uber provides a carpooling service in New York. The key variable is “surge pricing”, which occurs in less than 10% of New York rides according to the company, and can double or triple the displacement cost”.

3.11.3. Four other ways Uber is ethically challenged

In any new business, because morale and behavioral rules are not fully established, it is usual to see new start-ups violating some principles and standards of business ethics.

Here, in car-sharing and gig economies, the provided services have raised several ethical issues: multitasking while driving, passenger safety, privacy and leadership. In the following we will reproduce these four ethical issues as described by Bruce Weinstein [WEI 14] and apply them to our context:

  1. 1) Multi-tasking while driving. To get a ride, Uber will contact and notify, through its digitized platform, nearby drivers. But there is a safety drawback because the driver will be checking his mobile device in the car and will answer directly to you.

    “Despite hands-free devices, all of the activities that go along with receiving a message and responding to it are distracting, and may cause an accident, even if they take only a few seconds” says Weinstein. This is the reason why, in industry, in very sensitive processes, the operating worker is always constrained in his gestures and actions by special devices or by the presence of a person who is there for preventing any distraction.

    This issue was not initially addressed by Uber because a solution would be difficult to implement with regard to the private ownership of a vehicle.

    In terms of ethics, the service provider should be aware of such a danger and it cannot be responsible for causing a safety hazard. We should keep in mind that, in any organization, the manager (or CEO) must be more uncompromising against themselves and their employee than others.

  2. 2) Passenger safety. Safety and security are the first objective to be achieved in any field of activity. This is the case with e-hailing or the uberization of a process.

    It has been reported in [WEI 14] that several Uber drivers were accused of sexually assaulting passengers. To solve such problems, the solution (as implemented in many public areas in Europe) is to control riots or public events through movies cameras. Indeed, each time such an event may occur, it is necessary to bring some proof and background. Thus, it is probably a question of business ethics to implement such devices, when necessary in cabs, as soon they are open and used by the public.

    This is why, whatever the existing competition, a service provider has to establish a safety protocol and procedure to be followed by the drivers, and plan internal regulation as soon as a situation is risky (even if no deviance is reported).

  3. 3) Privacy. Here, in this area, Bruce Weinstein related that the US Democrat Senator Al Franken had cited Uber’s “…troubling disregard for customer privacy. Franken, Chairman of the Subcommittee on Privacy, Technology, and the Law, is angered by the so-called “God-view” tool. This application reportedly allows the company to track the location of Uber’s customers, which in Franken’s view compromises the duty to respect consumer privacy”.

    Privacy usually applies to any information, gesture or location related to customer and driver. Tracking systems can only be used by a company, police or official officers for “legitimate business purposes” and not for spying on riders or collecting information for business purposes.

    Everything which compromises the duty to respect consumer privacy is forbidden and this is why, through the cloud and big data processing, we are now involved in the whistleblowing phenomenon.

    Ethics consists in being very careful about the purposes of the use of such apps: with regard to security, they have to protect the public from harm, but, for users of other car sharing companies, a tracking device is merely a way to advance their business interests.

    The problem is to find the good balance between the global interest and advantages provided by such a business and the privacy or contempt against the individual.

  4. 4) Leadership – “Straighten and Fly Right”. In any emerging business, and when we introduce new technologies in IBM EMEA for competitiveness purposes, we denoted that “mistakes were made”. It is of utmost importance to react each time a deviance occurs. However, this is not a sufficient reason to stop technological and economical advances.

Uber has a leadership. Everybody requesting for a ride is impressed by how quickly a car appeared and how easy the service is to use, even with no money exchange between hands.

Without being disappointed or rejecting the aforementioned concerns, we have to keep in mind that to maintain a leadership, a large company has always to go forward and develop new advances: in the case of Uber, the challenge related to the “autonomous car” will be a paradigm change and will bring several diversified advantages we cannot ignore.

3.12. GIG economy: are the workers at Uber and Lyft happy?

The new service providers like Uber and Airbnb are part of the so-called “Web-to-Virtual Store” economy. Today, this is considered by many as an alternative way to conduct business. In fact, as practiced now, this new economy will be disillusioning for several reasons:

  1. 1) Usually one considers that uberization only involves a user and a professional. This is wrong because we have a minimum of three stakeholders: the user, the professional and the society.
  2. 2) Society and political unions consider that the uberized economy is opposed to conventional capitalism. Some think that uberization is more fitted to entrepreneurship (with or without employees) while capitalism addresses large companies with a lot of employees. Uber is just an ethical, or non-ethical, evolution of our Business model.
  3. 3) The Uber economy is based on the wide use of advanced technologies: it is just a digital platform to interconnect users with a service provider (vocational, transport, tourism, etc.). The responsiveness is maximized thanks to the direct interconnection between the customer and the service provider.
  4. 4) Quite often, company headquarters are located in different countries where taxes are low. So, revenues and financial returns in a given country are low and cannot be used for social or economic development. Legal problems and CSR will not be managed easily.
  5. 5) The promise for users and customers is convenience, cost, and reactivity but they will have to pay additional taxes for the social disturbances and other purposes.
  6. 6) The promise for employees however, is different. It is an opportunity enabling many entrepreneurs to find a job. Even if the wage is lower, the benefit is more powerful: it is called freedom. But for many workers in this new industry, this can become a false promise.

Different surveys1 were conducted on why uberized employees chose this position. Two of the most common points listed by employees were finding enough work and “optimizing” their schedules to make more money.

As a consequence, there is no specific winner: there are advantages and limits for anybody and any organization. Our economy is just living a transition.

The following figure (Figure 3.6) illustrates the above mentioned surveys.

image

Figure 3.6. Image: requests for startups

The graph in Figure 3.6 is very helpful for adjusting our sense of ethics in business. Indeed, according to this survey the situation seems to be very sad for the self-employee: it could be considered a regression in terms of wage and personal development.

Within this framework, the following points, issued from [FIE 15a], are given for education and training purpose:

  • – As stated in [MAS 17c], the economy is mostly greed driven: even governments are pulling these new opportunities of business for profitability reasons. Startups in this industry have quickly grown into multi-billion dollar entities; some have applied increasing salaries and scheduling pressure on workers to knock down competition and boost their own bottom lines. By contrast, conventional industry in France is dying. Here, we have to find an equilibrium between greed and social goals.
  • – On May 18th 2015, Uber upped the commission it takes from drivers to 30% in certain markets as part of a test. The result is clear: the more rides drivers offer in a week, the lower that commission gets. There is no positive relationship between employees and no vision to foster our interconnected society. It is an ethics of governance problem.

Uber drivers need to be considered as employees, with the potential to gain benefits like earning Social Security and having maintenance costs covered. It is a major ethical problem. It is also a transition problem in the evolution of a society: governments have to pay sufficient attention to the reorganization of society.

Moreover we can assert the fact that, considering the insufficiency of existing legislation and public governance, it is not surprising, in any western country, to observe that about 8% of ride-hailing drivers and 16% of delivery service drivers operate without car insurance. Why? This highlights the need for learning how to address the real and fundamental causes of a problem. Are all those responsible for such deviances invested in ethical culture?

3.13. The real price of innovation

Regardless of the controversies, yuppies or stressed business professionals do not care about the principles of conscious capitalism as they strive for growth and innovation. Uber? Cab Company? They do not give a damn about pulling out a phone and requesting an Uber; others will step into the street and call a taxi. It is just a question of convenience and cost. Conversely, the driver will be hyper-stressed because even if he takes home more money compared to working a yellow cab, there is no guarantee that it will continue. Moreover, he will be required to pay more fees now that Uber has shown a willingness to increase the commission it takes in certain markets.

However, the long list of offenses by Uber represents more than just bad behavior – it represents bad business. In fact, the company has disrupted the transportation industry but it seems this “disruption” has come without a sense of organizational ethics. This is why it is advisable to spend a large amount of time thinking about how we can integrate training on ethics, purpose, culture, authenticity and transparency into the work we do with our portfolio companies.

3.13.1. Digitization

The trend toward a gig economy has begun. Digitization and new technologies directly lead to a decrease in manufacturing jobs which are replaced by software activities and then types of service work: it is consistently an opportunity for new jobs that take much less time and rely more on gambling and financial resources.

Here, in terms of ethics, we have to note the influence of financial pressures on businesses leading to further staff reductions and the entrance of the millennial generation into the workforce. The trends are as follows:

  • – Millennials are associating real life with Internet life.
  • – They often consider that the decision-making process is too long.
  • – The current reality is that people tend to change jobs several times throughout their working lives; they bring a strong sense to the concept of freelance activity and tend to select jobs they are interested in, even if they are based on mobility, short-term positions and movement around the world, despite their families’ well-being and stability.
  • – They are open to WTVS and more specifically to sharing and gig economies.
  • – They are addicted to jobs that can inspire vocational attitudes, challenges and give them wings.

Millennials are like yuppies: they like the gig economy because businesses enable one to save resources in terms of benefits, office space challenges and training. In terms of money and ambition, they may have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff.

In terms of ethics, we have to be careful with the way of thinking specific to millennials: it is both more spiritual as well as more individualistic and greed.

3.14. Conclusion

In summary, any vocational sector can be subjected to the “online/Web” economy, where everything and everyone can be shared, sold, virtualized and so on.

We are no longer in the BAU environment of the 20th Century:

  • – The gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.
  • – The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy. Regardless of their detailed concepts, these alternative systems are not mutually exclusive and can operate within a predominantly capitalistic system. However, according to their characteristics, they contribute to the development of an exclusive society with a tendency to increase the gaps between population clusters.

While ethics is now based on our own conscience, an inclusive philosophy and the respect of the general interests perceived by the various stakeholders, there is a large scope to re-consider the way new technologies are implemented and used. This requires us to enhance the oversight of social safeguarding issues or to adapt ethics to the new expectations of society. But are the values of ethics challengeable? Are they the ultimate guarantor of our society’s drift?

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