The problem case study looks into Uber’s organizational behavior using theoretical background and presents recommendations to improve organizational functioning. Discover Uber’s work culture in 2021, theoretic aspects of the research, and workplace strategic decisions.
Organizational behavior is critical in determining the success and failure of a company. How the management treats its juniors, and how the company, in general, relates to its target clients are determinants of great performance. The essay will look into the organizational behavior of the company Uber, a transport company with an international presence. In particular, the essay will address some of the problems the said company faces and give solutions and recommendations to the same.
Challenges Faced by Uber
Uber is the world’s leading cab service application and records 40 million users all over the world monthly. The company has managed to become the largest market shareholder because it implements the low cost – high-value organizational model. Analyzing the strategic position of Uber, one can argue that many people transit from one place to another daily. For efficiency purposes, Uber has to ensure that there is always a car available to pick up passengers as their need arises.
For this to be possible, the company not only has to draw in many drivers to the platform, but also ensure that all drivers are satisfied by their interaction with the application, and remain loyal to the firm. In turn, Uber has the challenge of motivating drivers to encourage them to work through difficult shifts with minimal supervision. As mentioned, Uber encourages affordable rates compared to normal taxis. Therefore, drivers also have to be willing to pick up passengers and drop them off at low prices. Critics have argued that the arrangement is beneficial to Uber, and not to the drivers. Therefore, one of the biggest problems that Uber faces is the financial motivation of its drivers.
Money that is gained from the rides is shared between the company and the driver. Therefore, drivers have to work more hours to earn more money. Towards this end, Uber has to constantly come up with ways of motivating drivers to ensure that they do not go down their tools. Some incentives that they have been used by the firm to motivate the drivers can be likened to a dangling carrot as they allow drivers to work flexible hours, unlike the eight to five rule that corporates encourage.
To some drivers, such flexibility allows for the uptake of other jobs, therefore, perceived to be an advantage. It is, however, important to note that due to such perceptions, drivers have to struggle with health issues and fatigue. Therefore, a second problem the firm faces is the constant fatigue of its drivers. It is crucial to point out that the issue of fatigue can be explained in two ways. The first, as stated, is the fact that the drivers take up other jobs as well. The second way of explaining fatigue amongst Uber drivers is the fact that many overwork to make significant amounts of money.
The high driver turnover recorded by the company suggests that the current strategies of motivation used by the firm are not working. According to Sofe, job satisfaction is one of the leading causes of employee turnover in companies (34). If an employee is satisfied with their job, then they will automatically want to maintain their position. In the same breath, if an employee is not satisfied with their job, he or she will be compelled to leave due to low morale. Using different organizational behavior theories, this paper will explore the various problems identified to make positive contributions to Uber in a bid to help them reach a Pareto efficient position.
Concepts of Problem Identification
The problems that Uber is currently facing can be solved by first understanding the individual-to-organization relationship. Weiner defines the individual-to-organizational relationship as a psychological contract (19). The said contract comes with several expectations. First, employees have to be informed of the management’s expectations regarding their contribution to the organization regarding skills and loyalty. On the other hand, the organization is expected to provide some incentive, which is mainly in the form of psychological motivation and rewards.
In the evaluation of an employee, the possible contributions the said employee brings into the organization in the form of skills and knowledge, are perceived to be valuable. For Uber, the drivers’ contributions come in the form of customer service, time, and loyalty. Looking at the unique composition of Uber, it can be argued that the firm is yet to match the value of the driver with the motivation and rewards given. Over the years, in an attempt to lower turnover. Uber has researched to study driver psychology. Based on the findings recorded, the company has come up with incentives such as sending emails and text messages to drivers informing them of the high demand areas, and the possible cash goals that they can receive.
Having said so, the issue of job fit has to be considered when discussing the motivation and rewards system in Uber. Montgomery defines job fit as the level with which the personal contributions made by an individual match the inducements that a company offers the individual (78).
In an attempt to make more money, Uber drivers offer too much of their time to the company. The stated is very dangerous due to the sensitive nature of the job. Indeed, tired drivers can cause road accidents and end up injuring themselves and others. It can be argued that since Uber enjoys much of the market share, drivers have no option but to continue working with the transport company. Having said so, it is also critical to point out that even though the company is recording profits, the operational issues that the firm faces are critical and have to be resolved.
The theory of personal-to-organization is one of the course concepts that can be used to help understand the relationship between the company and the drivers. The said theory has five main components, namely, agreeableness, conscientiousness, neuroticism, extraversion, and openness.
This is a persons’ ability to get along with others. It is a trait that Uber drivers must have as the firm expects that they will meet different personalities. It is important to note that clients are usually prompted through the application to rate their drivers. It can be argued that clients use the concept of agreeableness to rate the drivers. The rating is then used to award the drivers with clients. More so, the rating is used to appraise the drivers every so often.
Conscientiousness determines the focus of the driver. Drivers have to set their goals and strive to achieve them. It can be argued that drivers without daily goals end up working overtime. The characteristic is important for Uber as it reconciles the job fit. Uber should be keen on whether the goals set by the drivers are realistic or not, to avoid demotivation when goals are not achieved.
This is the ability to civically deal with anger, moodiness, and anxiety while on the job. As mentioned, the drivers tend to meet different people and must be able to tolerate the different personalities they interact with daily. Interestingly, Uber acknowledges that some clients can be difficult. Therefore, the company also allows drivers to rate clients. The rating is used to help the company, and other drivers, keep off clients who are too aggressive. It can be stated that the rating of the client also helps keep the drivers motivated.
A driver needs to be comfortable in making and maintaining relationships. The most important of the stated relationship is the one with the employer. A good relationship with the employer will ensure that the employee’s needs are taken care of, and that job satisfaction levels are high.
An open driver can change and adapt to new ideologies to make their work more efficient. Still, on the issue of dealing with different personalities, the driver has to be open to the cultural and individual differences that the clients will have to serve them better.
The theory of attitudes can further be used to analyze the role that the organization plays in the driver’s life. This theory has two main components, work-related attributes, and mood.
Some of the key work-related attributes include job satisfaction and job commitment. As mentioned, one of the problems the company is facing is that its drivers are not motivated. Motivated goes hand in hand with job satisfaction and commitment. One of the factors that have led to the lack of satisfaction is the lack of intercultural training that the drivers need to relate with the different clients that use the application.
Another problem that Uber faces is the negativity that is associated with the job. The negativity comes from both the drivers and the clients. As stated, many drivers and critics argue that the company takes a hefty amount of money from the drivers as payment for the use of the platform. Such arguments have painted a negative image in the drivers as they believe they should be earning more. On the other hand, some clients also perceive Uber negatively due to the untrained drivers they get.
Using the attribution theory to explain how mood affects Uber, it can be argued that a pessimistic Uber driver will attribute his or her negative outlook to long working hours and little pay. However, the working hours are very flexible. Job satisfaction will, therefore, be low, and job fit will be affected. In turn, the pessimistic driver will opt to leave that position, contributing to the high turnover.
Workplace behavior can also be used to describe the problem Uber is facing. Workplace behavior can be defined as the actions of employees that have a direct impact on the effectiveness or output of the company. Using the given definition, it can be argued that Uber has efficient operations that encourage drivers to work long hours to meet the demand for the service/ application in an attempt to record positive feedback from the clients.
Pound et al., on the other hand, view a company’s operations through performance behaviors (11). Performance behaviors are sets of activities that a company expects all its employees to possess to meet its goals. Uber expects its drivers to always put safety first to ensure that their services are reliable. However, the fact that employees have to work longer hours to reach their daily targets creates a problem for both the company and the drivers (How Uber Uses Psychological Tricks 1). Many a time, the expectations of the organization are not met.
Workplace behavior and performance need to be at equilibrium for Pareto efficiency to occur. Uber has not been able to achieve this equilibrium since some of the firm’s goals overlap. To some extent, and in some countries, Uber drivers have the freedom to bend the company’s rules to reach the financial targets they have set for themselves. Consequently, Uber is experiencing dysfunctional behaviors from its drivers. At this juncture, it is important to ask oneself, is whose fault is it that there is dysfunctionality in the company? This question can be answered through an exploration of the concept of motivation.
Motivation can be defined as the measures or strategies that a company undertakes to ensure that its employees have desired performance behaviors (3). Heiner noted that motivation is very important as it is a function of performance and general output (3). Uber has managed to motivate its drivers through goal-directed behaviors. Their drivers are constantly made aware of the high-performance areas and given tips on how they can achieve their financial goals. It is the allure of achieving these goals that make drivers work excessively.
It can, therefore, be argued that Uber has taken a traditional approach to motivation. The approach assumes that employees are mainly motivated by money. To some extent, the given premise is true. The assumption has led to drivers becoming defiant and doing anything possible, including working overtime, to get money. However, it should be noted that the human resource approach is the best fit for Uber. This approach ensures that the company understands the contributions that are made by the employees and make the working environment conducive.
There are various theories that have been coined to explain motivation. The discussion will, however, only focus on the need-based theory of motivation. Uber drivers have certain needs that have not been addressed. Thus, despite the incentives that the company has given, drivers still bend the rules and work overtime. In turn, they endanger lives. In the hierarchy of needs, physiological needs are the biggest since they also encompass the security needs of an employee. For an Uber driver, the fact that there is no basic salary creates fear of failure to provide. This is both a security and a physiological need.
The need for achievement, which also falls under psychological needs, also has to be considered in the discussion. Many taxi drivers that joined Uber were previously working independently, or hired by a company. Therefore, they had set targets for achievement. However, the structure of Uber allows drivers to do other things. Thus, a majority of Uber drivers do not feel the need to seek achievement in their job.
The given situation can also be explained using the equity theory of motivation. According to the theory, employees can only be motivated if they feel like they are treated equitably with their counterparts in the same industry. In the absence of equitable treatment, then there is perceived inequity that lowers the self-esteem of an employee. Therefore, Uber drivers compare themselves with other taxi drivers and believe that they earn less than their counterparts. In turn, they become demoralized and leave their jobs.
Statistically, to compare equity, the outcomes of Uber drivers are divided by their input, and the result is compared with drivers in other companies. Previous research shows that indeed the Uber drivers get paid less, and are less motivated than the other drivers. The company, thus, continues to record high employee turnover. The same premise can be used to justify the need for drivers to work long hours. Arguably, Uber drivers have to work extra hours in an attempt to make as much money as their counterparts.
Motivational Properties of Task
To understand how to motivate employees, one has to understand the goals and objectives of the company. Additionally, motivation has different properties, which include task identity, skill variety, autonomy, task significance, and feedback. In the case of Uber, task significance is the most ignored motivational property. The company has had a difficult time finding an equilibrium between workplace behavior and performance to the extent that the drivers do not find their jobs significant.
Having said so, Uber needs to focus on creating better incentives for drivers in an attempt to make them realize the significance of their job. Training on customer service and financial stability can go a long way in ensuring the drivers are motivated. Financial advice can help the company solve problems related to fatigue brought on by working extra hours. Uber’s motivational skills should solely be focused on ensuring the drivers understand the significance of their tasks.
Helping the drivers find meaning in their jobs, albeit not having a direct ‘boss’ to report to, is also critical. It is important for the drivers to also understand the vision and mission of the company. It can be argued that the task significance issue discussed is largely brought on by the fact that the drivers do not feel a sense of ownership of the company or its successes. To resolve this, it is recommended that Uber engage the drivers in a more detailed way such that they feel part of the company. On the same note, by ensuring that the drivers feel part of the company, Uber will also be ensuring loyalty, therefore, also resolving the issue of high employee turnover.
Secondly, Uber needs to eliminate the feeling of inequality experienced by the drivers. It is the said feeling that encourages drivers to work more than 19 hours a day in an attempt to earn as much as their counterparts (Furfaro & Roberts 17). To resolve the said problem, it is recommended that Uber either reduce the percentage of fare that the company takes from the drivers, or increase the fare clients are required to pay. The said measure will ensure that the Uber drivers also have an equal opportunity to make a significant income and, in doing so, also lower their need to work overtime. It should be noted that Uber will require significant financial and payables advice to change percentages and still make a profit.
Thirdly, Uber needs to implement the Porter-Lawler model, where more focus is placed on the relationship between job satisfaction and performance. From the discussions in the previous section, one can argue that a majority of Uber drivers are not satisfied with their job. Indeed, it is for the said reason that a majority leave Uber and look for other companies to work for, or become independent taxi drivers. The high employee turnover has put Uber in a financially tight position. Due to the high turnover, the company is not able to meet the needs of its client. Also, the company has to keep hiring new drivers, which can be time consuming and expensive. To retain the conscientious employees, the company has to come up with better incentives and strategies of motivation.
The reward system drafted should encourage competition and the need for better performance. An example can be used to explain further. Full-time drivers need to have better goals and rewards systems than part-time drivers.
This means that if they meet their target for the day, then they are eligible for a reward. This will improve the operations of the company in three main ways. First, it will motivate part-time employees to become full-time employees to get rewards. In turn, and secondly, the company will be able to add more employees (drivers) on the platform. Finally, and most important, it will allow drivers to rest once they have achieved their goals for the day. It is also important to note that the set targets have to be logical. Unrealistic targets are the leading causes of drivers overworking.
Fourthly, Uber needs to come up with a system in which drivers have to choose a weekly schedule that is then approved by management. This will allow the company to know to monitor the driver more closely. Additionally, it will ensure that the drivers do not overwork themselves. Also, it will become easier for the drivers to adopt the five key traits that the company looks for in a driver. It is possible to find a desirable employee becoming demotivated due to constant interaction with people of different backgrounds. Indeed, it is arguable that human patience runs things when a person does the same thing over and over again.
The importance of rest should be discussed with every driver who works for the company. Indeed, at times, the company might have all the right policies, but the drivers still feel the need to work long hours. To prevent this from happening, Uber must sensitize its drivers on the importance of rest. It is crucial to point out that lack of rest has been linked to dysfunctionality in the behaviors of the drivers.
In the same breath, it is also recommended that Uber sets a maximum limit of working hours to achieve equilibrium between working behavior and performance. As mentioned, Uber can’t implement its ‘safety first’ policy as it is often overridden by the desire to make more money. More policies are needed within the organization that dedicates some working hours and the number of resting hours. It is expected that such a policy will interfere with the ability of the company to serve its client. However, the said challenge is short term and can be described as insignificant compared to the long-term advantages that will be experienced.
Additionally, Uber needs to have a call center where clients can call and report drivers that appear exhausted. The company can then trace the driver’s records to see how many hours he or she has worked. Currently, clients can give feedback on their ride after they reach their destination. The problem with the current system of feedback is the fact that it takes very long before management can analyze and address the complaints. An emergency or customer care number provided with the Uber application will work better and ensure that both the driver and the client are safe. Such action will also put the company in a positive light, ensuring that the negative perceptions of both drivers and clients have been diminished.
It is also recommended that Uber comes up with punishments for defiance. At the moment, when a driver gets a low rating from a customer, Uber simply ensures that they are no longer paired. Sofe stated that employees are usually very unwilling to indulge in dysfunctional behavior when faced with great punishment (33). Working past the stipulated time needs to be punished by immediate suspension pending review. Also, defiance should be punished through less pay until the driver involved changes his or her ways.
To get more insight into the problems the drivers face, it is recommended that Uber survey their employees through the application. The identified leading cause of accidents involving Uber cars is exhaustion due to overworking in a bid to make more money. The suggested research should aim at looking for other ways the company can motivate drivers and ensure that they drive safely. Indeed, the research can also be used to help the company understand the unique position that Uber drivers find themselves in, and in doing so, help the company create better solutions to identified problems.
Also, basic training is important to help the drivers deal with the everyday challenges they face and keep them motivated. Additionally, drivers need training that will result in task significance identification. As mentioned, the drivers do not feel the importance of their task. To some extent, they take their tasks for granted. It can be argued that such perceptions have been cultured through societal expectations where driving is not a coveted job.
To deal with this situation, Uber needs to ensure that all drivers are trained to the market accepted standards. The training can be done online for drivers that are already in the system, and face-to-face with any new driver that is added to the platform. Pound et al. explain that training is best done if the trainees are shown the consequences of dysfunctional behavior (23). Once the drivers have been trained, they will not only know the importance of their tasks, but they will also elate better with the clients they serve.
It is also recommended that Uber empower its employees. There are several ways the company can empower drivers. One such way is through training on different factors that affect their work performance. A second way is through the development of organizational and personal goals. In as much as the company can set goals for the drivers, they need to be allowed to set their goals and monthly targets. If it is within the range that the company considers logic, then they can be provided with some reward upon achieving the said goal.
Empowerment should also be about enabling employees to feel responsible for their actions. The issue of ownership can also be included in the process of empowerment. The company can make the derivers feel ownership of the company’s success and the company’s products. In so doing, the management will ensure that the drivers are empowered on the vision and mission of the firm, thereby, work towards realizing both the mission and vision. It is expected that the employee will also become more loyal to the company.
Uber has been successful because it has managed to create value for convenience and low costs. Thus, the company enjoys a large market share compared to its competitors. However, the firm has ignored its drivers, and this has led to high employee turnover and other management problems. One of the problems the firm is facing is low motivation amongst its drivers. Also, many of its drivers suffer from fatigue due to overworking. Such Uber drivers feel the need to work more than 19 hours to make more money. The lack of equilibrium between the workplace behaviors and the performance, too, has led to many of the drivers quitting their jobs. To survive in the market, Uber needs to resolve the said problems.
How Uber Uses Psychological Tricks to Make Its Drivers Work Longer Hours and Earn More Money For The Company. Daily Mail. 2017. Web.
Furfaro, Danielle and Georgette Roberts. Uber Drivers Working up to 19 Hours a Day Just to get by. The New York Post. 2016. Web.
Montgomery, Daniel. Statistical Quality Control: A Modern Introduction. Wiley, 2012.
Pound, Edward et al. Factory Physics for Managers. McGraw-Hill, 2014.
Sofe, Charles. Organizations in Theory and Practice. Basic Books, 2007.
Weiner, Beiner. A Theory of Organizational Readiness for Change. Implementation Science, vol. 4, 2009, pp. 67-75.