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Uber and the (Negligible) Cost of Bad Publicity

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Chances are that any recent news you’ve read regarding taxi service app company Uber was bad.

The company has recently suffered a string of very negative stories including:

  • Accusations from drivers (which Uber calls “freelancers”) that the company was stealing their tips
  • A case in which the company argued that the California government cannot regulate its business practices since it is not a transportation company (it simply happens to help cab drivers meet up with people who need a ride)
  • Angry complaints from both coasts about the “surge pricing” model that boosts rates by as much as 500% when users need the service most as opposed to, say, establishing a base rate like New York’s yellow cab service
  • An incident in which a driver hit and killed a 6-year-old girl; her family has filed a wrongful death suit against the company

The most recent story is the worst, though.

Uber not only admitted to calling and then canceling more than 100 rides from competitor Gett after the company compared its own rates favorably with Uber’s now-infamous pricing. After ordering a cab, waiting until each driver had arrived and then canceling the call, employees would send a text to offended drivers urging them to switch over to Uber (where they would not be considered employees and would be independently responsible for providing safe, satisfactory service).

As Valleywag reported on Friday, the order to call and cancel appears to have come from the top of the organization; the company’s general manager in New York alone called and cancelled more than 20 rides with Gett. While Uber did pay fees for this stunt, it was hardly good PR, and the company’s head relations guy acknowledged this by labeling it “too aggressive.”

The fact that Uber simply connects its users to drivers who, while paid by the company, qualify as freelancers or independent contractors leaves a whole lot of room for abuse, much of which will (wrongly or rightly) land at the service provider’s feet no matter what the law decides. Given the fact that the company’s CEO is not afraid to jump into the middle of any argument and display a certain disrespect for those making customer service complaints, we imagine that many more incidents like the ones described above will occur and that Uber will suffer more bad press for it.

It’s clear that a certain subset of people—many of whom have media jobs and/or blogs—really don’t care for Uber. Yet the business seems to be doing just fine; it’s been valued at $4 billion. The contentious conversations regarding its service model, etc. occur within such a tiny Southern California-shaped bubble that a world filled with potential customers remains blissfully unaware.

The point is that, as long as your product is viable and meets a growing demand (Uber was supposedly created to remedy terrible SF cab service standards), then stories like these just don’t make much of a difference. That’s not to trot out the age-old lie that “all publicity is good publicity”, it’s simply to show that most people don’t care.

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