May 16, 2008

A Business Ethics Case Study: U-Haul Sucks

I was looking at the Wikipedia entry for U-Haul (which sucks, by the way; the last time I will ever use U-Haul, they did not have the truck I reserved, the only way I was able to get a truck was by waiting a full day, finding someone who was moving into my building with the truck I needed, and following them back to their drop-off point, and the truck which was overdue for an inspection threw a tire tread stranding me in Oklahoma for over five hours, with the emergency help line taking at least two hours to get me through to someone who could've helped). There is a section on safety issues, which notes that, for instance, about half of the U-Haul trucks tested in Ontario were not safe to drive on the road.

There then follows this paragraph, inserted by a defender of U-Haul if not an employee:

In U-Haul's defense, since there are over 15,000 dealers, their polices are difficult to enforce. It is common knowledge among independent U-Haul dealers that equipment that is marked as "unrentable" does not turn a profit for the dealer, and therefore minor safety issues are overlooked in the face of losing profit. In short, while U-Haul does their best to make sure their equipment is in the best condition possible, with the amount of trucks on the road and a lack of reporting of safety issues by independent dealers, the system is only as strong as the weakest link: the individual businesses that contract with U-Haul.

Do you notice anything about this? It's not a defense at all (except possibly legally). If equipment marked as "unrentable" doesn't turn a profit for a dealer, then of course dealers are going to rent unsafe equipment. If U-Haul doesn't do anything to alleviate this issue then they aren't doing their best to make sure their equipment is in the best condition possible. They are guaranteeing that their dealers will rent equipment in poor condition.

This is a basic business ethics issue; a company that really cares about some ethical issue (like safety) will arrange some incentives so that people are not hurt for taking actions that promote the issue. If central management makes it so that your dealers can't gain a profit without cutting corners on safety issues, then central management is morally responsible for the resulting safety issues.

And, in case I didn't mention it, U-Haul sucks. I haven't heard that Penske has similar safety issues (and they have always honored my reservations), so there's presumably a way to rent trucks safely. (I also haven't even found U-Haul to be any cheaper the last couple of times I moved.)

UPDATE: Wow, U-Haul is ridiculously unethical. I especially like this passage from the second link:

Further complicating matters is U-Haul's practice of booking reservations without knowing if it will have trucks and trailers when and where renters want them. The policy leads to long lines of overwrought customers, creating pressure to get equipment back on the road quickly.

And here's a little more about their reservation policy. One thing that's striking is how weak the available legal remedies seem to be.

Posted by Matt Weiner at May 16, 2008 09:46 AM

This is why there are strangling governmental regulations. And trial lawyers.

Posted by: Matt's mom at May 18, 2008 08:53 PM

Is U-Haul's motto still "adventure in moving"? After you move a couple of times, that has about as much appeal as "adventure in surgery."

Posted by: matt's mom at May 18, 2008 08:55 PM

I do not in any way condone strangling trial lawyers.

Seriously, without governmental regulations you get more trial lawyers; and the regulations really are better, because regulation-by-lawsuit is so scattershot and unsatisfactory.

Posted by: Matt Weiner at May 22, 2008 09:30 AM

After a little searching, U-Haul seems to have dropped that slogan (I also found this story), but I wouldn't be surprised if most of the trucks with that slogan are still out there.

Posted by: Matt Weiner at May 22, 2008 09:37 AM
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