Evaluating a company's impact (the case of Uber)

This week’s read time: 4 minutes

You are reading Green Digest Impact, a weekly newsletter that provides in-depth analyses of companies’ environmental and social impact.

OUR APPROACH

Central to our narrative is the principle of double-materiality, which recognizes that a company's impact is twofold: it affects both the environment and society at large, and in turn, these external factors influence the company's financial and operational performance.

While traditional ESG assessments focus on the latter, we aim to examine companies' direct impacts on these factors. In pursuit of this, we introduce a unique scoring system that quantifies a company's impact.

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THIS WEEK’S COMPANY

Uber

This week we dive deep into Uber’s environmental and social impact.

Uber is a global mobility and delivery platform that connects consumers with various transportation modalities, food delivery, and freight services.

Some interesting facts:

• Uber’s history started in 2008 when the founders Travis Kalanick and Garrett Camp found themselves stuck in Paris on a snowy evening, unable to find a taxi. 

• Uber coordinates an average of 28 million trips per day across its global platform.

COMPANY’S IMPACT

Uber’s overall impact score

Uber has a general impact score of -0.94 (on a scale from -5 to +5). Its impact is spread across 8 UN Sustainable Development Goals (SDGs) and 9 topics, split between positive and negative analyses.

In the socio-economic sphere,

the company enhances accessibility by providing on-demand transportation and creating flexible earning opportunities, thus improving urban mobility and supporting people’s economic independence and livelihoods. Uber’s platform has achieved remarkable scale, with 150 million monthly active platform consumers, 6.8 million drivers and couriers, and over 1 million merchants. It holds a substantial share of the global ride-hailing market, including 25% globally and 74% in the US. Over 170,000 companies, including more than half of the Fortune 500, work with Uber for Business. The company provides services in over 10,000 cities across approximately 70 countries and employs over 30,400 people.

However, Uber has faced widespread legal scrutiny for unfair competition and monopolistic behavior. Accusations include predatory pricing, such as lowering rates to undercut taxis, and leveraging non-contractual driver agreements to reduce costs unfairly. The company has also been fined for collusion, including a $4.86 million penalty in Singapore in 2018 for reducing competition with Grab. A 2022 Guardian investigation exposed 124,000 leaked documents detailing secret lobbying efforts and law violations to dominate markets. Uber has also faced fines in the Philippines and Colombia for anti-competitive practices and was ordered to pay more than €180,000 in damages to over 900 taxi drivers and their union in France for creating “unfair competition” between 2014 and 2015.

The company’s handling of user data has also raised concerns. Uber shares customer data with advertising partners and has faced several data breaches, including a 2016 incident that exposed the personal information of 57 million customers and drivers. Regulatory fines, including a $4.6 million penalty in 2022 and a potential $324 million fine for violating European data protection standards, have further underscored these issues.

Environmentally,

Uber has an annual carbon footprint of over 31.6 million tonnes of CO₂ equivalent, comparable to the annual electricity usage of over 6.5 million homes. Further, it uses over 250,000 m³ of water annually, with 15% of its source located in high and extremely high water-stressed areas. The company is trying to reduce its environmental impact through Uber Green and Uber Comfort Electric, offering low- and zero-emission rides to millions of users worldwide. Uber's global network boasts over 143,000 monthly zero-emission vehicle drivers active on its Driver app. 

_{*The impact score is current as of January 2025 and may be subject to changes as it is continuously updated.
**You can find details about the scoring methodology here and the information sources here.}

ESG VS IMPACT SCORE

What is Uber’s ESG rating?

For comparison, Uber has an A rating in MSCI's ESG evaluation.

However, ESG Ratings from MSCI ESG Research are designed to measure a company’s resilience to financially material ESG risks and they provide a window into one facet of risk to financial performance. They measure how effectively companies manage ESG risks, not their impact on these factors.

SCORES BY SDG

Uber’s impact scores by SDG

Positively (and by weight), the company scores the highest in Industry, Innovation and Infrastructure SDG (+2.78), followed by Gender Equality (+0.22) and Decent work and Economic Growth (+1.47).

Negatively, the company scores the worst in Peace, Justice and Strong Institutions SDG (-3.09), followed by Reduced Inequalities (-1.97) and Climate Action (-2.86).

*the analysis takes into account the weight of the SDGs

Uber's impact on SDG 10 - Reduced Inequalities - is dual. Positively, Uber promotes diversity, with approximately 60% of its US workforce and 54% of its leadership roles composed of minority groups. However, Uber also faces allegations of discrimination against minorities, particularly regarding ride booking and wait times, which undermines its progress in reducing inequalities.

CONCLUSION

Materiality Map & Final Words

So, Uber’s key social and environmental impact lies in …

it its pivotal role as a global mobility and delivery platform, serving millions of users and businesses worldwide. Its services enhance urban mobility by providing accessible and convenient transportation and enable the delivery of goods and services. Moreover, Uber contributes to economic stability by creating opportunities for millions of drivers and couriers across the globe.

However, Uber faces criticism over ethical concerns, including anti-competitive practices and monopolistic behavior, leading to regulatory scrutiny and fines. Data privacy issues, compounded by multiple breaches and fines, have further tarnished its reputation. On the environmental front, despite initiatives like Uber Green, the company’s substantial carbon footprint and water usage highlight pressing sustainability concerns.

Uber’s overall impact score of -0.94 reflects the tension between its positive contributions to mobility and economic opportunities and the negative repercussions of its ethical, privacy, and environmental shortcomings.

If you’d like to delve deeper into Uber’s impact, you can explore it here.

If you'd like to learn more about the scoring methodology, you can do so here.

Do you have a specific company you'd like us to cover? Send your suggestions to [email protected]

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