Why Uber’s Executive Troubles Will NOT Hurt Them
An Editorial From Colin Finkle of Brand Marketing Blog
I’ve deleted Uber from my phone. The same culture of aggressiveness and rule-breaking that has thrust them into markets they had no place in has created a workplace of misogyny and disrespect. While I cannot support what they have been revealed as, I believe they will not be hurt by this in the long run; their brand will remain untarnished to those who matter.
Uber has gone through a rash of negative news stories centering around the toxic culture in their head office. An ex-employee documented cases of sexual advances from a manager that she reported to human resources. These reports were then ignored because this manager was considered a high performer (NY Times article). She also outlined a situation where the company purchased embroidered leather jackets male staff but not the female staff because the high ratio of male employees gave them a bulk discount on men’s jackets but not women’s jackets (ReCode article). Uber set up a special, independent investigation team led by former U.S. Attorney General Eric Holder to root out the people responsible for the misogynistic acts (Forbes article).
After this, a video of CEO, Travis Kalanick surfaced showing him arguing with a driver over fares (Bloomberg article), which seemed to confirm that Uber had very hostile relationship towards their drivers. And finally, Kalanick said that he was going to search for a Chief Operating Officer who could level him out and right the ship. This was news to the president, Jeff Jones of Target fame, when then left Uber following many of the senior staff who have left in the midst of the bad publicity (NY Times article).
The importance of the Uber brand.
Uber has the lead in market share of a new category, ride sharing. This dominant position has built them a beloved brand one ride at a time, saving people from rainy days and getting them home safe after a night out.
Their brand is important because the concept of ride sharing makes people uneasy; taking rides from strangers was something our parents told us not to do. If people do not feel safe taking an Uber, they will not take ride sharing at all. They have nothing if the Uber brand does not mean safety and reliability.
An incredibly resilient asset.
In Brand Marketing Blog’s recent interview with Ramez Toubassy, we asked if such controversy devalues a brand. He would know; his employer, Gordon Brothers, evaluates and invests in brands.
“Brands are incredibly resilient assets,” Ramez replied. “Samsung still dominates the cell phone market after its phones blew up in people’s pockets. Polaroid still dominates the instant photography market after decades of decline. Indian Motorcycle is making a run at Harley despite being out of the market from 1953 to 1999.
“With an asset that resilient, I would almost always bet on the brand’s ability to weather the storm as opposed to the alternative.”
People will remember how you make them feel.
One of my favorite quotes is from Maya Angelou: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”
The palace intrigue fits under the ‘what you said / what you did’ category for Uber, and the average rider will forget it all (if they even heard about it in the first place) and keep using Uber.
Contrast Uber’s problems with Samsung’s problems. We outlined how Samsung’s most valued customers were being made to feel unsafe particularly when traveling with their phone. That damage will be far more long lasting, but their market cap remains as valuable as ever in spite of their brand being tarnished. Wall Street does not believe it will affect their ability to do future business.
A speed bump, not a cliff.
Every day Uber spends rebuilding their management and employee base into one that can sustain their market dominance quietly (and hopefully, ethically) is one where competitors like Lyft can move advance in the marketing place.
But they will sort that out in a matter of months. Long term damage would only happen if their brand were damaged, and it isn’t.
Facebook ran into similar problems when transitioning from a ‘growth at all costs’ culture to a culture more suited market dominance. The influence of Sheryl Samberg has matured Facebook, and in particular, Mark Zuckerberg.
Uber can make a similar transition and may make them a more empathetic company better suited to keeping all their stakeholders happy and maintain their market advantage.