Monday, November 30, 2020

Carvana: Poor Reviews Ethics (2012-2020)

Carvana's Case Regarding their "Poor Reviews"


The car "Vending Machine"



In 2012, Earnest Garcia III co-founded and became the CEO of a future billion 

dollar car company, Carvana. Soon after the company became widespread and 

known by millions of people, customer complaints and poor reviews started flying 

in every month. Carvana is an online used-car buying service that cuts out having 

to go to dealerships and even delivers your newly bought car right to your home. 

With Carvana, car buying and selling is meant to be simple and carefree without the 

pressures of going to a dealership or having to search for places to sell your car. 

Customers can even finance their vehicle through Carvana and choose to either have 

their new car delivered to them or customers can pick their new car up at a car vending 

machine. This paper will analyze various ethical theories including individualism, 

utilitarianism, kantianism, and the virtue theory. When it comes to individualism, 

Carvana acted ethically when it came to maximizing profits but fell short when it came 

to acting within the letter of the law. Under utilitarianism, Carvanan acted unethically 

because of the amount of customers who were dissatisfied with their experience with 

the company. Then, looking at Kantianism, Carvana was once again acting unethically 

due to the company's continued emphasis on self-interest and not the overall duty of the 

business. Lastly, relating the virtue theory to Carvana, the company once again does not 

prove to act ethically as it does not uphold the values of honesty, courage, justice, and 


Company Case 

            Carvana is a used car retailer that works fully online. The company allows potential 

            buyers to browse and choose a car online and then the car is either delivered to the 

            buyers door or can be picked up at a Carvana Vending Machine. Car buyers have seven 

            days to try their chosen car and if they are not satisfied then the buyer can return their 

            car and get all of their money back. The company was founded in 2012 by Earnet Garcia 

            III in Tempe, Arizona. The company thrives on ease and convenience to the extent that 

            Consumers can use its web site to buy used cars, obtain financing and arrange for 

            vehicle delivery” (Vardi). Carvana is a multi-billion dollar company that separates itself 

            from its competitors by offering a wide selection of vehicles from used cars to used 

            trucks and ensuring that each individual vehicle has undergone a 150 point inspection. 

            Once someone arrives at the Carvana website, it is quite easy to search all vehicles in the 

            inventory and each car has a 360-view [that] even allows you to highlight hotspots, 

            which could be minor dings or imperfections in the exterior” (Kress). Also, a potential 

            buyer can view the interior and the car’s Vehicle Identification Number. Once a car has 

            been chosen, the buyer goes through the process of paying for the vehicle on the website 

            whether it be through cash, financing, or trading in. Carvana also has the option of selling 

            a car completely online with a pending offer as long as the vehicle passes the in-person 

            inspection (Kress). Overall, Carvana has become an easy to use car online shopping service 

            that has no pressure and no hassle. Every vehicle is guaranteed either 4,189 miles or 100 

            days but there is no way to test drive the car before buying it and prices tend to be slightly 

            higher than cars told privately. All of the cars sold on Carvana have no reported incidents 

            and no fire or flood damages guaranteed (Consumer Affairs). 

The Case 

            When Carvana first premiered in 2012 many people were extremely intrigued and 

            excited to take the hassle and time out of car buying. The overall satisfaction rating for 

            Carvana is currently two out of five stars with a majority of users giving the company 

            one star reviews. Eight years later and once the company had enough customers it quickly 

            became obvious that more buyers were dissatisfied with their experience than there were 

            pleased customers. Many customer complained about the lack of a thorough 150 point 

            inspection like the company promises. One customer wrote “Their 150 point inspection 

            is a joke. They put a cheap set of Walmart tires on it that wouldn't hold air. The truck 

            arrived with a dead battery with corroded terminals that the driver tried to explain away” 

            (Consumer Affairs). Along with the 150 point inspection issues, many other customers 

            were dissatisfied with the delivery process as many vehicles were delivered to buyers 

            days and even weeks after the estimated delivery time and even when buyers 

            received their vehicle many did not receive the title or registration to the vehicle for 

            weeks (Consumer Affairs). On one website alone there were over one-thousand 

            customer complaints varying from problems with the product or service to guarantee 

            or warranty issues (Better Business Bureau). 

Overview showing the poor review percentage


            The main stakeholders in Carvana include Morgan Stanley, Price T Rowe Associates 

            Inc., Tiger Global Management, Vanguard Group Inc., Baillie Gifford & Co., and many 

            other major organizations (Fintel). These stakeholders bear a large burden by Carvana’s 

            poor customer reviews and services. Although these are not the sole stakeholders in the

            company they do have some of the largest ownership percentages of everyone. Due to 

            the recent poor reviews of the services provided by Carvana including their poor 150 

            point inspection and delivery services these major corporations are losing money in the 

            millions of shares that they own. The yearly revenue for Carvana ending September 30th, 

            2020 $4.864 billion which is a 42.17% increase in revenue compared to 2019. Even 

            though there was a 42% increase, this is no match to the 101.48% increase in revenue 

            for Carvana between 2018 and 2019. Such a decrease in profit weighs heavily on the 

            stakeholders of Carvana and without a better approach to customer satisfaction, profits 

            will not increase by so much again (Macrotrends). 


            Milton Friedman believed that businesses must be concerned with maximizing their 

            profits as long as it’s done so within the law. Individualism encompasses a slightly 

            different ethical theory as “it is sometimes referred to as the economic model because it 

            is based on an economic view of the limits that ethics has in a business context and is 

            based on economic theories” (Salazar 18). Looking at Carvana in relation to individualism, 

            Carvana was extremely in line with the ideals and thoughts of individualism. This is 

            because Carvana’s main goal as a company is to make a profit and throughout the last 

            five years, Carvana has continued to make billions of dollars in profits. For example, 

            from 2016 to 2017 Carvana increased its sales by $0.859 billion which was a 135.21% 

            increase and then from 2017 to 2018 Carvana’s sales increased by $1.955 billion, a 

            127.68% increase (Macrotrends). The main issue that arises is whether Carvana was acting 

            within the law. It is clear after reading hundreds of customer complaints that Carvana 

            did not act ethically within the law. On the Carvana website, the company states “we put 

            each vehicle through a 150-point inspection so that you can be 100% confident in the 

            quality and safety of your vehicle. This inspection includes everything from tread depth 

            of tires to thickness of brake pads to exterior paint quality to Bluetooth compatibility” 

            (Peace of mind comes certified). Many of the customer reviews reveal the truth about the 

            150 point inspection that Carvana lies about and falsely promises its customers. From 

            mechanical issues to cosmetic damage, many new car buyers were surprised to find issues 

            with their new cars that were not laid out in the car descriptions. When customers called 

            the support center, Carvana did little to nothing to help them with their car issues and 

            often helped in no way (Consumer Affairs). Therefore, it is quit obvious that Carvana 

            has been trying to make the largest profits that they possibly can but in doing so they 

            have not been acting ethically within the rule of law.


Looking at this case from a utilitarian viewpoint, the case would be deemed unethical 

because of the surplus of unsatisfied customers which left a massive negative effect on 

the customers purchasing from Carvana. A “utilitarian philosophy would aim for the 

betterment of society as a whole. Utilitarianism would say that an action is right if it 

results in the happiness of the greatest number of people in a society or a group” 

(Investopedia). Based on the amount of negative reviews and reports from unhappy 

customers, it is clear that Carvana did not understand that the lack of promise and 

guarantee on their part would result in the negative experiences of thousands of customers. 

Before promising a 150 point inspection, specific delivery dates, and a stress free car 

buying experience, Carvana needed to understand the amount of work and time that each 

car buying process would take and need. Carvana is trying to move cars too quickly that 

they have time and time again not reached the promising ideologies that the company is 

supposed to uphold. A utilitarianist business’ actions “should aim to maximize the 

happiness in the long run for all conscious beings that are affected by the business action” 

(Salazar 19). Carvana should be focused on exceeding the expectations of their buyers by 

maximizing pleasure and reducing pain through a stakeholder approach. With Carvana 

being more concerned about making money and getting their vehicles sold in the 

shortest amount of time, they lost sight of the importance of the satisfaction of their 

valued customers.  


Kantianism was created by Immanuel Kant and it provides the belief that people should 

“always act in ways that respect and honor individuals and their choices. Don’t lie, 

cheat, manipulate or harm others to get your way. Rather, use informed and rational

consent from all parties” (Salazar 20). In shorter terms, the main focus of Kantianism is 

on rationality and Good Will. A business should make its choice based on the duty that 

the business has and not on its self-interests. Businesses should be honest with their 

customers and should also be loyal to their customers. Carvana has been acting in their 

own self-interest for years now, putting their own want for profits over the happiness and 

satisfaction of their customers. One customer explained that two of their hubcaps on the car 

fell off due to not being sacred tight enough after the 150 point inspection and Carvana 

told the customer “that since this was an accidental issue I am responsible for the hubcaps 

and Carvana won't be willing to help” (Carvana LLC: Complaints: Better Business 

Bureau). The Owner of Carvana, Earnet Garcia III should have acted when his customers 

first began complaining about improper customer service (Vardi). Negative reviews of 

Carvana have been steadily posted on various websites for years now and the issue is that 

the same comments from 2018 are still being expressed in reviews from November 2020. 

It is clear that the owner of Carvana has no intention of improving his companies services 

as nothing has been for years now. Instead, Earnest Garcia III continues to make profits 

off of unhappy customers and happily broadcasts the positive reviews from customers 

all over the front page of Carvanan’s website, as if there have been little to no issues with 

other customers (Carvana LLC: Complaints: Better Business Bureau). Carvana has been 

continuing unethical practices according to Kantianism and will continue to do so unless 

someone does something about it. 

Virtue Theory 

            “Virtue theory asks about a person’s character and assesses whether a person is virtuous 

            or not” (Salazar 22). This theory was originally created by the ancient greek philosopher, 

            Aristotle, and includes four main virtues which are honesty, justice, courage, and 

            temperance. The main aspect that separates this theory from the three other theories that 

            have been discussed is that the other theories examine individual actions while the virtue 

            theory examines the character of a person (Salazar 23). If people want to live a virtuous 

            life and function well they must be rational. Applying Carvana to the virtue theory, 

            Carvana has not been completely honest with their customers as to the high degree of 

            inspections that take place on every vehicle. Instead of upholding their values of checking 

            every car with their 150 point inspection, they oftentimes fell short of their promises. 

            One customer explained that “they put a cheap set of Walmart tires on it that wouldn't 

            hold air. The truck arrived with a dead battery with corroded terminals that the driver 

            tried to explain away. You had one job, 150 point inspection” (Consumer Affairs). Also, 

            Carvana's virtue of justice was not met because the company was not just to the unsatisfied 

            customers who bought their vehicles. In many cases where customers had negative 

            experiences, they were never refunded or given assistance for their misfortunes. Customers 

            were left alone to figure out how to handle issues with their new cars instead of getting 

            assistance from Carvana who guarantees a 150 point inspection (Consumer Affairs). 

Justified Ethics Evaluation  

            In my opinion, the actions done by Carvana have been consistently unethical and 

            unprofessional from a business standpoint. There have been hundreds upon hundreds of 

            one and two star reviews about the poor performance of Carvana as an online car buyer 

            and seller company. Carvana should have been taking these complaints more seriously 

            from the start of their business because without satisfied customers a company cannot thrive 

            and prosper. As more people read the negative reviews and comments about customer 

            experiences it caused less people to buy and sell cars with Carvana and does not comfort 

            other customers to purchase or sell a car from Carvana in the future. If Carvana had taken 

            the reviews of customers more seriously and reworked some of the mechanical issues with 

            their car inspections and delivery period, the company’s profits would have been higher in 

            the last year like they were from 2018 to 2019. Overall, the inability for Carvana to adapt 

            to the complaints by customers is very unprofessional and even worse is the fact that 

            Carvana continues to do little to nothing about the situation and helping customers with 

            their faulty cars. 

Action Plan 

            Carvana is currently experiencing many issues related to customer service. The company 

            has had a high number of one star reviews in which customers have experienced delayed 

            delivery times, high prices, and poorly inspected vehicles. Carvana needs to address their 

            lack of a quality 150 point inspection that they have promised on their website. In order to 

            do this the company must first hire a manager that will better overlook the mechanics of 

            the inspection to ensure that every vehicle is prepared to be sent off to customers. Also, 

            Carvana must improve the process and checks that are put in place for each area of the 

            inspection and this can be done by raising the standards of the overall inspection. Looking 

            at delivery times, Carvana needs to put in place a more accurate system to determine when 

            cars will arrive to customers so that they are more prepared, not waiting, and have a reliable 

            form of transportation until their new car comes in. If a customer was told that they have to 

            wait an extra 2 days, it is believed that customers would be happier with this option then 

            waiting around for days or weeks not knowing when their car will arrive. It is important 

            for good customer service that products arrive in a timely fashion and one way to improve 

            this would be to increase the number of Carvana Vending Machines around the country. 

            There are currently 24 locations where people can go to receive their cars instead of 

            having the car delivered to them. If more vending machines were available around the 

            country then more people would be willing to go get their cars themselves instead of 

            waiting for delivery. Therefore, Carvana should increase their vending machine locations 

            to have at least one location in every 50 states in the USA so that people will be more 

            inclined to drive to pick up their vehicle and customer complaints related to delivery times 

            will decrease. By allowing more people to go to nearby vending machines there will be 

            less of a demand for delivery resulting in faster delivery times for those that are too far 

            to pick up their vehicle. 


Carvana is rated "Average" with 3.6 / 5 on Trustpilot. (n.d.). Retrieved from

Carvana LLC: Complaints: Better Business Bureau. (n.d.). Retrieved from

Consumer Affairs. (n.d.). Carvana. Retrieved from


Fintel. (n.d.). CVNA / Carvana Co. - Institutional Ownership and Shareholders. Retrieved from


Kress, J. (2020, June 29). Carvana Review: 5 Things to Know Before You Buy or Sell. Retrieved 


Macrotrends. (n.d.). Carvana Revenue 2015-2020: CVNA. Retrieved November 27, 2020, from

Mathew. (2020, June 12). Carvana Reviews and Complaints: What You Need to Know Before

Buying Your Car Online. Retrieved from


Peace of mind comes certified. (n.d.). Retrieved November 29, 2020, from

Salazar, Heather. The Business Ethics Case Manual. n.d.

Vardi, N. (2017, December 18). How An Ex-Con Became A Billionaire From Used Cars. 

Retrieved from


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