Uber’s records have exposed the ugly side of the pioneering ride-sharing company’s global expansion.

Uber is no stranger to controversy. Even considering this, the files make reading disturbing because they expose non-compliance with the rules, lying about data and preventing police and regulators from accessing it, aggressive lobbying using influential policymakers to change rules accordingly, bribing academics and politicians, and exposing drivers to violence. He is a model that has already been used. The shock of the files is the justification of what was suspected and which went beyond what was expected.

This presentation asks the question of what is legal and ethical in the desire to expand business by all means. The gains from essentially establishing a monopoly through rapid expansion using an innovative business model were significant. Uber has changed the nature of the taxi industry around the world and has become a pioneer of the gig-economy model where workers are considered self-employed and therefore not eligible for benefits.

Is Uber the only transnational company to have done this? The Economist Constantine V. Vaitsos studied the functioning of such enterprises in his remarkable work “Distribution of income between countries and transnational companies,” (1974). He referred to these companies as transnational rather than multinational because ownership and control is concentrated in one country rather than distributed among countries. The main purpose of these companies, according to Vaitsos, is to benefit monopolistic either through R&D, managerial skills, size of advertising and marketing, or monopoly of resources… This advantage may be temporary before other competitors emerge the objective is therefore to maximize the profit that can be extracted and, as far as possible, to destroy competition. The distribution of gains between the company and the host country will depend on their relative bargaining power.

As Vaitsos wrote about the pharmaceutical, textile, and other industries in Latin America, the framework is helpful in understanding Uber’s business. Uber sought to undermine the bargaining power of host countries by influencing policy makers. This is not the only one. Facebook’s parent company Meta has elevated former UK deputy prime minister Nicholas Clegg as head of global affairs. Like its founder, Mark Zuckerberg says that Clegg is “a senior leader at the level of myself… who can lead and represent us in all of our political matters globally.” Access to ministers, civil servants and other political decision-makers is important, as shown not only by the UK cabinet ministers revolving doorand series of scandals in the United Kingdombut also claims of pressure in other countries.

As there will always be attempts by companies such as Uber (or for that matter the big tech companies) to tip the balance of the game to their advantage, there have also been repeated calls and tries to regulate them effectively. The two major Western players that can do this are the US and the EU. The The EU has taken steps in this direction. However, regulatory support in the United States has declined. There is also a tension in the EU because Ireland has fallen behind behind in the application of the regulations.

By leaving the EU via Brexit, the UK signaled its own regulatory regime. It appears that there are currently no effective regulations in place since recent regulatory changes only replicate the lost framework without any power to enforce them. Uber’s records are of particular concern in this context as they show its power to influence politics through ties to the Conservative and the Work party leaders. The continued lobbying scandals in the UK demonstrate the power of money to influence politics. The advisory file Reforming the framework for better regulation has generated controversy. The Uber records have shed light on the subversive power of big business and the need to carefully reconsider an effective framework for the future.

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