Highlights from

Lawrence 16e, Business and Society: Stakeholders, Ethics,

Public Policy

Discussion Case: Insuring Uber’s App-On Gap 4/7/22

iscussion Case: Insuring Uber’s App-On Gap
Discussion Case: Insuring Uber’s App-On Gap 4/7/22
Discussion Case: Insuring Uber’s App-On Gap
At around 8 p.m. on a New Year’s Eve, a mother and her two young children were walking home
in San Francisco. At a busy intersection, the family waited for the “walk” signal and then started
across the street. Just then, an SUV made a right turn, striking all three members of the family in
the crosswalk. The mother and her 5-year-old son were seriously injured. Her 6-year-old
daughter was killed. The man behind the wheel of the SUV identified himself as a driver for the
ride-hailing service Uber.
Uber immediately distanced itself from the tragedy, saying that the driver was “not providing
services on the Uber system at the time of the accident.” The family’s attorney contested this,
saying that the driver was logged onto the Uber application, appeared on the system as available
to accept a rider, and was interacting with his device when he struck the mother and children.
In other words, the tragic incident had apparently occurred during the app-on gap —the driver
was on the road with his Uber application activated, but had not yet connected with or picked up
a rider. So, who was responsible, the driver or the ride-hailing service?
Uber was, in the words of a New York Times columnist , “the hottest, most valuable technology
startup on the planet.” The company was founded in 2009 as “everyone’s private driver,”
providing a premium town car service that could be summoned online. In 2012, it rolled out
UberX, a service that enabled nonprofessional drivers to use their own vehicles to transport
riders. Customers could use the Uber app to hail a car, connect with a willing driver, watch the
vehicle approach on a map, pay their fare, and receive a receipt, all on their smartphone. U...

...sonal auto policies should not be expected to cover ride-hailing drivers once they signaled
availability. “This is not someone commuting to work or going to the grocery store or stopping to
pick their children up from school,” a spokesperson said. The family of the girl killed on New
Year’s Eve also supported Bonilla’s bill, as did consumer attorneys and the California App-Based
Drivers Association.
But others lined up in opposition. Uber and other ride-hailing companies strenuously objected to
the bill, as did trade associations representing high-technology and Internet-based firms,
apparently concerned about increases in their costs of doing business. The bill, said a n Uber
spokesperson, was “an example of what happens when special interest groups distract
lawmakers from the best interests of consumers and small businesses.”
Sources: “Deadly Pedestrian Accident Driver Claimed He Drove for Uber,” January 1, 2014,
www.abclocal.go.com ; “Uber and a Child’s Death,” The New York Times, January 27, 2014; “An
Uber Impact: 20,000 Jobs Created on the Uber Platform Every Month,” Uber press release, May
27, 2014; “With Uber, Less Reason to Own a Car,” The New York Times, June 11, 2014; “Uber and
Airbnb’s Incredible Growth in 4 Charts,” VB News, June 19, 2014, online at

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www.venturebeat.com ; “In Uber vs. Taxi Companies, Local Governments Play Referee,” Christian
Science Monitor, July 7, 2014; “The Company Cities Love to Hate,” Bloomberg Businessweek,
July 7, 2014; “Uber, Lyft, Sidecar Fight to Block New California Regulations,” San Jose Mercury
News, August 13, 2014; “The Question of Coverage for Ride Service Drivers,” The New York
Times, September 5, 2014; and private correspondence with the office of Assemblywoman
Susan Bonilla
Discussion Questions 4/7/22
Discussion Questions
Who are Uber’s relevant market and nonmarket stakeholders in this situation?
What are the various stakeholders’ interests? Please indicate if each stakeholder would likely
support, or oppose, a requirement that Uber extend its insurance to cover the app-on gap.
What sources of power do the relevant stakeholders have?
Based on the information you have, draw a stakeholder map of this case showing each
stakeholder’s position on the issue, its degree of power, and likely coalitions. What conclusions
can you draw from the stakeholder map?
Which of the stakeholders mentioned do you think has the most salience, and why?
Based on your stakeholder analysis and map, what do you think Uber should do in response to
the bill introduced by Susan Bonilla, and why?
Chapter 2: Managing Public Issues and Stakeholder Relationships 4/13/22
discriminated against
gays and lesbians.
Chapter 2: Managing Public Issues and Stakeholder Relationships 4/13/22
freeze its plans to add jobs in North Carolina
Chapter 2: Managing Public Issues and Stakeholder Relationships 4/13/22
discriminatory state laws
Chapter 2: Managing Public Issues and Stakeholder Relationships 4/13/22
social issues focused on individual rights
Public Issues 4/13/22
issue that is of mutual concern to an organization and one or more of its stakeholders.
Public Issues 4/13/22
social issues
Public Issues 4/13/22
sociopolitical issues
Public Issues 4/13/22
public policy or legislative implications.
Public Issues 4/13/22
legislative implications
Public Issues 4/13/22
missing a major business opportunity

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Public Issues 4/13/22
Understanding and responding to changing stakeholder expectations is a business necessity
Public Issues 4/13/22
the larger the gap, the greater the risk of stakeholder backlash
Public Issues 4/13/22
businesses take on important public issues and become more involved in addressing them
Environmental Analysis 4/13/22
method managers use to gather information about external issues and tren
Environmental Analysis 4/13/22
firm needs a framework for seeking out and evaluating environmental information
Environmental Analysis 4/13/22
gender, age, marital status
Environmental Analysis 4/13/22
strength of the organization’s competitors, whether they are potential or actual allies, patterns of
aggressive growth versus static maintenance of market share, and the potential for customers
to become competitors
Discussion Case: Businesses Respond to the Movement for School Safety 4/13/22
19-year-old former student
Discussion Case: Businesses Respond to the Movement for School Safety 4/13/22
he had shot and killed 17 people,
Discussion Case: Businesses Respond to the Movement for School Safety 4/13/22
mental health system that had allowed someone with a troubled history to purchase an assault
rifle
Discussion Case: Businesses Respond to the Movement for School Safety 4/13/22
The quiet community of Parkland, Florida, was rocked in 2018 when a 19-year-old former
student entered Marjory Stoneman Douglas High School with a duffel bag containing an AR-15-
style rifle, a vest with additional magazines for the weapon, and a semi-automatic version of the
M16 rifle used by the U.S. military. Within minutes, he had shot and killed 17 people, and the
nation mourned another tragic school shooting.
In response, Parkland students launched the #NeverAgain movement and protested continuing
gun violence, especially in schools; the lack of gun control measures; and a mental health
system that had allowed someone with a troubled history to purchase an assault rifle . A month
later hundreds of thousands of people—children, parents, politicians, and celebrities—gathered
for “The March For Our Lives” in Washington, DC, jamming onto Pennsylvania Avenue from the
White House to the U.S. Capitol in what may have been the biggest rally for tighter gun control in
American history. Other similar marches and protests were held that day in nearly every major
U.S. city. Many called on Congress to take action and pass strict gun control legislation, as had
also occurred after prior mass shooting incidents in Las Vegas, Newtown, Orlando, and other
cities and towns.
Some protesters simply called for a ban on assault rifles and more thorough background checks

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for gun purchasers. Others specifically targeted the National Rifle Association (NRA), an
advocacy organization that had vigorously opposed any restrictions on gun ownership. In
response to the Parkland students, NRA’s CEO Wayne LaPierre told an audience at the
Conservative Political Action Conference that “as usual the opportunists wasted not one second
to exploit tragedy...

...oycott the NRA became a top trend on Twitter. Both airline companies ended discount
programs for NRA members through their group travel programs, including United’s program to
offer discounts to NRA members traveling to the NRA’s annual meeting. “Bank and other
companies are sensitive to being on the wrong side of a social media campaign, which can
spread pretty quickly these days,” said University of Michigan marketing professor Erik Gordon.
“They don’t want to risk having people march or boycott.”
The NRA was quick to fire back. In an official statement, the organization said, “Some
corporations have decided to punish NRA membership in a shameful display of political and
civic cowardice. In time, these brands will be replaced.”
Some businesses experienced a backlash to their actions. Senator Michael Crapo, the head of
the Senate banking committee, sent blistering letters to top executives at some major banks
accusing them of using their market power to manage social policy. He warned them against
developing ways to monitor gun transactions through their payments systems. The Georgia
state legislature removed a provision in a tax bill which would have given Delta Airlines a $40
million airline fuel tax exemption. Analysts calculated that only 13 NRA members actually had
used Delta’s group travel discount, resulting in a cost to Delta of more than $3 million per NRA
passenger served. Delta’s CEO responded, “The decision [to cancel the NRA discount] was not
made for economic gain and our values are not for sale.” Others argued that the so-called liberal
reaction by businesses to join the gun protesters galvanized conservative groups, deepening
their support of the NRA and their resolve to protect their right to bear arms.
Discussion Questions 4/13/22
Discussion Questions
What was the public issue facing the companies in this case?
Describe the “performance–expectations gap” found in the case. What were the
stakeholders’ (community and school students) expectations, and how did they differ from
businesses’ performance?
If you applied the strategic radar screens model to this case, which of the eight environments
would be most significant, and why?
Apply the issue management life cycle process model to this case. Which stages of the
process can you identify?
In your opinion, did businesses respond appropriately to this issue? Why or why not?
If you had been a manager of one of the airlines or banks discussed in the case, what would you
have decided to do (or not do) in the face of emerging public concern about gun violence in
schools?

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