Uber was founded in 2009. Essentially, it is a software company providing a service: an efficient and user-friendly way of transporting passengers from one place to another in an automobile. Uber is an app – nothing more. Without drivers and their cars, Uber would not be able to function.
When Uber was founded, the company focused on creating and building customer loyalty and I was a loyal customer. I used to think Uber would eventually become generic for car transportation as Kleenex is for tissues and Xeroxing is for copying. But now I’m not sure if they will still be the dominant player in a very competitive field. Now in selected geographic markets, Uber has competition from Lyft, Gett and Via, as well as new services that seem to be popping up everyday.
When I take an Uber, which is fairly often, I have had many casual conversations with drivers. When they talk about Uber there is no passion or mention of loyalty. With only a slightly leading question from me, many times they will voice their frustration with income, hours, out-of-pocket expenditures, etc. There is no connection to the brand – that piece of the puzzle is missing. Compare this to Zappos, where the associates live, sleep and breathe the company’s culture. While not every company can replicate the Zappos associates’ passion for the brand, it is important to make that goal part of any organization’s DNA.
Recently, Uber began adding a tipping option. At first the company fought the concept explaining that customers wanted to have a frictionless experience without having to decide on a tip amount. The underlying message was that the drivers do not need or warrant that extra compensation. The new tipping option takes less than 2 seconds to execute after you have rated your driver. I think tipping contributes an additional motivation to provide a better experience. When I wrote my last blog about Uber – it is a hot topic – focusing on creating a more human interaction between the driver and passenger, I got varied responses from my readers. Some totally agreed and others said, no, they weren’t looking for a relationship. However, one thing I can be certain about is that every passenger would appreciate a complimentary bottle of water or today’s edition of a newspaper, whether they wanted a conversation or not.
Uber’s market value is projected to be approximately $50 billion, down $10 billion from a short time ago. Their recent bad press made investors wary. Can the culture at Uber change? Should the change just be within the corporate structure? I think the wealth and health of Uber must focus on the driver. Without loyal drivers, Uber will lose market share with each new competitor that arrives on the scene.
Personally I don’t feel loyal to Uber anymore. It has nothing to do with bad press about the corporation having a poor culture, the CEO recently stepping down, or the accusation that they took advantage of customers during a taxi strike in New York. I’m not a loyal customer because there are now many choices and Uber service delivery and environment are not consistent.
Uber must listen to their drivers as often as getting feedback from users/customers and treat drivers as importantly as customers. Finding out from drivers what passengers are saying and feeling about the Uber experience is also key data. The drivers are the frontline associates.
Uber should shift their focus and understand that drivers are the company’s biggest assets. Drivers being well compensated, treated with respect, and appreciated for their efforts will make Uber survive. The ultimate goal should for Uber to become another Kleenex or Xerox. While it took those two companies many years to become generic household names, I’m afraid Uber’s clock is ticking and I’m not sure if it will survive past midnight.
What do you think? How passionate do you feel Uber drivers are to the brand?
Great post. Unfortunately, the rot at Uber starts at the top, with former employees exposing a culture of sexism and mismanagement, You know it’s bad when the CEO, in this case Travis Kalanick, is forced to resign, as well as board member David Bonderman shortly thereafter..
Uber has had more than its share of corporate gaffes and stumbles: Almost $100 million in legal settlements to Massachusetts and California drivers (a situation ready-made to undermine their loyalty and commitment), documents stolen from Google’s self-driving cars division, significant customer deletions of Uber accounts, etc. Because, like other high-tech companies, Uber relies on both consumer and employee trust, there’s much work to be done with respect to rebuilding image and reputation.
Drivers, like customers, derive both emotional and rational value from their relationship with Uber. If there is no emotional commitment to customers by the drivers, and insufficient rational value (in the form of compensation, etc.), the challenges for Uber will be that much greater.
Hi Michael, as always thanks for your valuable insights. Your additional commentary to my blog post is greatly appreciated. It is amazing how organizations don’t understand the value of having an entity that values their customers (internal and external) regardless of how good the technology, service or solution may be. Richard
Hi Richard: it’s interesting that Uber’s abusive, misogynistic culture didn’t catalyze – or even influence – your decision to stop using their service. In my case, just reading Susan Fowler’s February 19, 2017 blog (Reflecting on One Very, Very Strange Year at Uber) about her experiences as an Uber employee was enough to completely and permanently turn me off from giving the company any of my money (see https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber). I made this decision not only as the parent of a daughter entering the workforce, but as one who believes that companies that flagrantly abuse their employees will not benefit from having me as a customer.
Regarding your point about driver loyalty as the key to the company’s longevity – I don’t question that it’s important to cultivate employee loyalty. But Uber’s driver’s don’t supply the company’s revenue. Customers do. Driver loyalty is one key, but it’s not the key. Whether it’s Uber or any other company, longevity strategy isn’t one-dimensional. Every enterprise must pay attention to customer demand.
Hi Andrew, thanks for your comment. Unfortunately, because of extensive travel, in many cities Uber is the only game in town. I don’t really have too much a choice which hail-riding service to take. In some towns even taxis have become far and few between. I tend to disagree with you a bit. Unlike other in other industries, limo drivers can easily change which company they represent, just by putting a different sign on the window saying they work for east coast limo, Uber, Lyft, Gett, etc. Therefore, I still believe that driver loyalty must be one of Uber’s highest priorities in addition to changing their corporate culture. I greatly appreciate your viewpoint!
Companies can’t succeed for the long term without both customer and employee loyalty.
If Uber didn’t offer a good service at a competitive price, it would’t matter how well employees were treated. If Uber didn’t offer a competitive employee experience at reasonable pay, no drivers = no customers.
Uber has to compete on both fronts. As a rider I see actions to keep prices low (perhaps too low for drivers in some cases) and a good experience. We do have Lyft here in San Diego area so perhaps more competition than Richard has experienced.
For drivers, Uber just announced a 180-day program at https://www.uber.com/c/180-days/, saying:
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“You told us what you want and it’s time we step up and give you the driving experience you deserve, because simply put, Uber wouldn’t exist without you.”
Our Commitment to Drivers
We’re making a commitment to you. For the next 180 days (and beyond) we’ll be making meaningful changes to your driving experience. Some changes will be big, some will be small — all will be the changes you’ve asked for.
Each month for the next 6 months, we’ll share meaningful changes that will make driving more flexible and less stressful, giving you earnings & support you can depend on.
program aimed
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Among the changes include tipping (now implemented in SD), more flexibility, and better support.
To me it looks like a serious effort. And sorely needed according to this report:
https://techcrunch.com/2017/06/23/uber-has-seen-a-sharp-drop-in-new-driver-retention-this-year-apptopia/
And this one says Lyft has a clear edge in both rider and driver loyalty:
https://www.fool.com/investing/2017/03/12/lyft-or-uber-guess-which-rideshare-brand-drivers-a.aspx
Here is an especially telling passage from that article:
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Part of the reason for Lyft’s higher score could simply be its fatter paychecks. Per Campbell’s survey, Lyft drivers are happier, higher paid and higher rated — a clean sweep. More specifically, the survey showed Lyft drivers were averaging about $17.50 per hour, almost $2 an hour more than the reported Uber figure.
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In casual conversations with Uber drivers, most have said they also drive for Lyft and prefer it because rides pay a bit more. But they drive for Uber because they get more work.
Hi Bob, thanks for your comments and for your highly informative links to various articles. I’m hoping that Uber survives by following through on its promises to drivers and customers as you stated. As they mentioned in their email to drivers it’s important to obtain continual feedback to ensure they inspect what they expect. Richard