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What Uber Needs To Do To Fix Its Reputation

A few pieces of advice for the ride-sharing service or anyone who would lead like them.

What Uber Needs To Do To Fix Its Reputation
[Photo: Flickr user 5chw4r7z]

Uber has an outstanding business model, and it’s been the leader in successfully disrupting the declining taxicab industry–but all of that will mean nothing if the company continues to stumble into one controversy after another.

The name Uber is synonymous with bad PR, and for good reason. Multiple drivers in the U.S. have been accused of sexual assault, and in India, a female passenger accused a driver of rape, setting off calls for Uber to institute background checks and boost its safety measures.

Add to that a high-profile blunder by an Uber executive and concerns about how the company recruits drivers and treats customer data, and the ride-share startup faces a precarious situation.

Despite its problems, Uber is still considered safer than most taxi services, and it has created an efficient system for ride sharing that seems to be here to stay. The problem is that Uber is terrible at communicating these things, and it needs to do a better job of responding to issues as they arise.

Being the leader in a fledgling industry means Uber is a natural target for detractors, but the company needs to avoid giving its critics fuel to add to the fire. If Uber wants to restore its public image, it will need to make a concerted effort. Here are three steps to get started:

1. Focus On Goodwill Marketing

Uber has shown that it’s capable of reacting well in tricky situations. When its automated “surge pricing” kicked in during the Sydney hostage crisis and rates skyrocketed for rides out of the area, Uber responded quickly.

The company offered free rides to people trying to leave Sydney’s central business district, and it reimbursed people affected by the surge pricing. Uber’s actions were spot-on, and it needs to follow this script in the future.

Better yet, the next step is to make it a matter of policy that drivers will offer free rides during crisis situations to help get people out of harm’s way. A small gesture such as this could go a long way toward rehabilitating Uber’s image.

2. Value Drivers As Much As Riders

Uber has spent a lot of time—and used a lot of shady tactics—trying to undermine Lyft, its chief competitor, and poach Lyft drivers, but the company needs to realize that the best way to attract drivers and beat its competitors is to treat its drivers better. Specifically, Uber should focus on two areas:


  1. Employee Relations

    I recently rode with an Uber driver who told me that there were numerous times he couldn’t get technical support because there were no Uber offices in Los Angeles. Setting up small satellite offices in various cities would be a quick way for Uber to improve relations with its drivers. Uber could also help drivers secure lower insurance premiums or offer perks when they refuel or buy new cars. Little gestures like these can significantly improve employee satisfaction.


  2. Commissions

    Currently, Uber collects a commission ranging from 20% to 28%. Because Uber is in a high-growth market and the cost of adding a new driver is marginal, it could afford to lower its commission or offer a tiered system that spurs drivers to take on more rides per day. The company also needs to adjust its income claims. It says the median UberX income in New York City is $90,766 a year. In reality, that probably represents the top quartile. Drivers who expect to make that much will be sorely disappointed.

3. Let Riders Control Their Data

Uber came under fire last year after it was revealed that company executives could use an internal tool called “God View” to track customers and view their ride history.

Uber needs to make it clear that users have complete control over their own data and guarantee a certain level of privacy. The service needs to give users better visibility into what pieces of data the company retains and give them the ability to delete or withhold certain data in some cases.

Uber could expand on this privacy mantra by offering “private rides” in which information isn’t shared with Uber unless there’s an emergency.

What Business Leaders Can Learn From Uber

Uber isn’t the only company that will suffer from a public image crisis. For business leaders, there are several things to take away from Uber’s experience.

First of all, it’s critical that business leaders monitor customer sentiment scores–whether that’s through public polls or Net Promoter Scores–and provide easy feedback channels. If those scores start to drop, they need to determine why and fix the problems. Offer customers incentives to return, and explain how the issues have been resolved.

Secondly, business leaders should understand the importance of safeguarding customer information. Businesses should set strict limits on what customer data is available to employees and ensure it’s the minimum necessary to deliver a product or service. Customers appreciate and expect transparency, and they’ll reward you with loyalty if you respect their privacy and let them know how you treat their data.

Above all else, don’t be afraid to apologize. Consumers want companies to accept some form of responsibility when bad things happen–whether the company was directly involved or not. Consumers have a certain level of tolerance for mistakes, and if you’re willing to apologize, they’re usually willing to forgive.

Ultimately, it comes down to whether a company can exhibit humility and a willingness to change. This is a very simple idea, but it’s hard to execute. Although Uber isn’t in danger of losing its foothold in the ride-sharing industry quite yet, if it fails to show a willingness to fix what’s wrong, it could easily lose its place in the market.

TX Zhuo is a managing partner of Karlin Ventures, an L.A.-based venture capital firm that focuses on early-stage enterprise software, e-commerce, and marketplaces. Follow the company on Twitter.

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