Uber Case Study

 

Student Names

Ayoub, Mohammed, Mohammed.ayoub97@hotmail.com, Business Finance, 440-822-8868

Hummer, Margaret, margaretmhummer@gmail.com, Business Economics, 216-410-0868

Kozak, Noah, noahk0702@gmail.com, Business Finance, 216-704-3510

Love, Montesia, montesialove@gmail.com , Business Administration, 216-659-8470

Pate, Demetrius, patedemetrius12@gmail.com, Sports Management, 216-804-5613

Whitaker, Jack, jack.whitaker2320@gmail.com, Business Finance, 440-319-8397

Advisor: Jeanette Novakovich, Phd.

Email: j.novakovich@csuohio.edu

Phone: 216-970-3055

School: Cleveland State University College of Business

 

Abstract

To say the least, 2017 has been a rough year for Uber. It is only the beginning of May and the company is having one of the biggest meltdowns of all time. It seems that when they respond to one issue, another pops up. The case study examines Uber’s recent poor corporate culture and how they have attempted to mitigate it. Hopefully, the rest of 2017 will not nearly be as disastrous as the beginning.

 

 

Executive Summary

Massive influx of negative press surrounding recent turmoil

#DeleteUber in response to disruption of protest against Trump travel ban

Sexual harassment within the company

CEO argument with driver caught on video and released to public

“Uber” derivative of the  German word “über” meaning “superior” or “above”

Latest press argues the relevance between the company’s name and its reputation.

 

 

Company Overview

Established in 2009

Headquartered in San Francisco

Available in 570 cities worldwide

Valued at $69 billion

Connects drivers to those in need of a ride via smartphone app

Automatically billed to customer credit card

Later development of food delivery and helicopter rides

Globally located offices: engineering center in India, regional office in Singapore

 

 

Company History

Idea was sparked in 2008- Garrett Camp and Travis Kalanick were in Paris for LeWeb tech conference, had trouble hailing a taxi

“Tap a button, get a ride”

Camps’ recent sale of StumbleUpon, Kalanicks’ recent sale of RedSwoosh

Camp purchases domain name “UberCab.com upon arrival home from Paris

Successful trial run in New York (May 2010) sparks the launch of smartphone app on Android and iOS – San Fran area availability

Company branches out in 2011 to New York, chicago, Boston, Seattle, Washington, Paris

Launch of UberX in 2012 provides customers with a more cost effective alternative, expanding their target market

Global loss of $3.8 billion reported to Bloomberg in 2016 – demonstration of transparency by the private company

 

 

Mission Statement

Stronger Economies

Opportunity for all

Work where it’s needed

Improved Access

Bringing transit to your door

Safer Roads

uberPOOL — Sharing the way to sustainable cities

Making a world of difference

 

 

Timeline

January: #DeleteUber, thousands delete the app

February 19: Former female employee shares stories of secual harresment at Uber

February 23: Google sues Uber over stolen technology

February 28: CEO gets caught on video yelling at employee

March 3: Details of controversial “Greyball” technology is leaked

 

 

Corporate Communication Following the Incidents

After a video of Uber CEO Travis Kalanick seen in a heated argument with one of his employees

surfaced, he knew some damage control had to be done. On February 28th, Kalanick wrote a staff email addressing his needs to “grow up” and become a better leader. Aware that he needs help in improving his leadership role, Kalanick admits that he is willing to seek assistance. This email, addressed to the Uber team, was soon posted on the company’s blog page for the public to see.

When a former colleague made a blog post about the sexual harassment she endured at the company, another apology was issued. On February 21st, in a meeting lasting over an hour, Travis apologized for the company culture, as well as things he could have done as a boss such as handling employee complaints properly and not letting employees feel unheard.

 

 

New Policies Developed

In regards to allegations made about harassment along with the dispute between CEO and employee, Uber didn’t seem to find a need for new policies. While no adjustments were made to how Uber would treat their customers, current policies may be questioned. According to Uber Community Guidelines, customers should respect each other as well as their drivers. Amongst the many guidelines, one in particular really stands out. “Give riders and drivers some personal space”, while being a good rule to enforce, CEO Kalanick seems to have issues with this himself, as he is seen arguing quite close to the face of one of his employees.

 

 

Marketing Initiatives

Throughout all the bad press Uber has been receiving, marketing strategies have remained the same. Although company CEO may not have went out of his way to win customers back, his original marketing may be enough to keep customers engaged. With one strategy being the referral system, riders can give a free ride to a friend, but also earn a credit in return. This program provides a way for first time users to experience the ways of the company, without having to pay the fees.

 

The Public Response

The #Deleteuber movement was almost the start of the recent melt down from Uber’s CEO Travis Kalanick. Uber took a stand and sided with President Trump’s Immigration Ban and they paid for it. Mr. Kalanick clearly didn’t care what people thought about his relationship with President Trump saying, “We’ll partner with anyone in the world as long as they’re about making transportation in cities better”(Fiegerman, 2017). Many could ask, how could a simple hashtag impact a whole company? The New York Times reported, 500,000 users requested to delete their accounts in the week after the travel bans (Issac, 2017). Social Media is a powerful and influential tool.People used the #Deleteuber to show they weren’t supporting Uber anymore. Crimson Hexagon, a social media analytics company, compiled this chart of Twitter data, referencing the number of unique users who tweeted #DeleteUber on dates related to Uber scandals:

 

 

This past February, Travis Kalanick got into more hot water when a video of him freaking out on an Uber driver surfaced. The video made the CEO look like he had a short temper and was heartless. The video that led to him to promise to seek counseling and he wrote an open letter apologizing for his actions.   

 

 

You would think that these issues would be enough but the company had more to come. Uber has built themselves into a 70 million dollar valuation company and being in more than 70 countries. They have done these things by breaking the rules and regulations around the world. The latest was the “Greyball” uncovering of how they broke rules back in 2014 in Portland, Oregon. The mayor of Portland, Ted Wheeler, said in a statement, “I am very concerned that Uber may have purposefully worked to thwart the city’s job to protect the public ( Issac, 2017).” Uber has used this technology to evade authorities in Boston, Paris and Las Vegas. People had different reactions to the tool, good and bad reactions. Uber went so far to say that they used “Greyball” for the safety of their drivers.

 

 

 

 

Litigation

In February 2017 , Uber actually joined a lawsuit with Facebook, Google and Apple and filed a Friend-of-the-court brief against President Trump’s Immigration Ban. They argued that the ban is “unconstitutional, unfair and, above all else, bad for business” (LA TIMES, 2017). In Late February, Google sued Uber  because allegedly a former employee of the company Waymo  had a plan to steal trade secrets from their self driving car technology.  Google stated, “Six weeks before his resignation this former employee, Anthony Levandowski, downloaded over 14,000 highly confidential and proprietary design files for Waymo’s various hardware systems, including designs of Waymo’s LiDAR and circuit board” (Washington Post, 2017). Also, earlier in the year, Uber settled a lawsuit with the FTC for misleading drivers on how they could much they could earn on the platform (O’brien, 2017). They settled for 20 million dollars.

 

 

Financial Impacts

In the first quarter of 2016, Uber lost about $520 million dollars, in the second quarter their losses exceeded about $750 million. This means that Uber’s losses in the first half of the year 2016 roughly totaled $1.27 billion dollars (Murphy,  M).  Headquartered in San Francisco, California, about every three months dozens of shareholders join in on a conference call to hear the breakdown of its business performance from the company’s head of finance, Gautam Gupta. Being a company that is only seven years old, Uber has lost as least $4 billion in the history of the company. Even with a loss as great as this in only half a year, because of the value of the company being set at $68 billion dollars, Uber is still able to continue to operate as the successful company that it is (Spiegel, D).

 

 

Case Principles

  1. Tell the truth.
    • With all the problems that Uber has been encountering recently it is of the right idea for the company to be upfront and honest. CEO, Travis Kalanick also shares this mindset. It has been a brutal couple of months for both the company and its CEO.
  2. Prove it with action.
    • On Tuesday, February 28th Kalanick issued a public apology stating that “the criticism we’ve received is a stark reminder that I must fundamentally change as a leader and grow up” (Murphy, M).
  3. Listen to stakeholders.
    • Uber is a company that is based on private investors. This being said it is very important for them to remain up to date and well informed as to what the public needs, but even more importantly what them want.
  4. Manage for tomorrow.
  • Approximately, within the past year or so Uber has had multiple instances of negative publicity and issues with customer service. The way that Uber, as a whole, has responded to each of the issues that have come up has really said a lot about the company. They have stressed the importance of customer service and gone the extra mile to make sure that at the end of the day the customer, or in this case the rider, is completely satisfied.
  • Conduct public relations as if the whole enterprise depends on it.

    • As stated previously in the last principal, “Manage for Tomorrow”, Uber has done an exceptional job with handling public relations. With the type of company that Uber is, they put themselves at a great risk for customer issues or complaints.
  • Realize an enterprise’s true character is expressed by its people.

    • Public relations is  a huge part of the Uber company. Being that public relations is constructed of every employee, both past and current. Uber has a very large base of people who meet these requirements. In general, Uber’s corporate office does a good job with making sure that respect is given where earned, diversity is encouraged and proper knowledge is distributed when necessary.
  • Remain calm, patient and good humored.
    • Over the past year, more than they have ever needed to be, Uber has been extremely good at remaining calm in difficult situations and keeping the ideals of the company in mind.

 

Appendices A-E

 

 

 

 

 

Bibliography

A profound apology. (2017, March 07). Retrieved May 05, 2017, from https://newsroom.uber.com/a-profound-apology/

 

Account, U. (2017, April 25). Uber (@Uber). Retrieved May 04, 2017, from https://twitter.com/Uber

 

At the company’s weekly all hands meeting. (2017, January 25). Uber CEO defends Trump relationship to employees. Retrieved May 05, 2017, from http://money.cnn.com/2017/01/25/technology/uber-ceo-trump/index.html

 

Bosa, D. (2017, March 21). Here’s everything that’s gone wrong at Uber in the last month. Retrieved May 04, 2017, from http://www.cnbc.com/2017/03/20/uber-what-went-wrong-problems-overview.html

 

Editors, F. (2017, February 28). Alphabet Sues Uber Over Alleged Stolen Intellectual Property. Retrieved May 04, 2017, from http://fortune.com/2017/02/28/alphabet-uber-lawsuit-intellectual-property/

 

Facebook. (n.d.). Retrieved May 04, 2017, from https://www.facebook.com/uber/?ref=br_rs

 

Flynn, K. (2017, April 08). #DeleteUber vs. Deleted Uber: Is hashtag activism a farce, or a force? Retrieved May 05, 2017, from http://mashable.com/2017/04/08/deleteuber-vs-delete-uber/#Fjj1_h8cnmqb

 

Fung, B. (2017, February 23). Google’s arm for self-driving cars is accusing a former engineer of stealing trade secrets for Uber. Retrieved May 05, 2017, from https://www.washingtonpost.com/news/the-switch/wp/2017/02/23/google-is-accusing-former-execs-of-stealing-trade-secrets-and-taking-them-to-uber/?um_term=.5a11bcfadb6f

 

How Uber Works: Insights into Business & Revenue Model. (2016, April 19). Retrieved May 04, 2017, from http://nextjuggernaut.com/blog/how-uber-works-business-model-revenue-uber-insights/

 

Isaac, M. (2017, March 21). Uber Board Stands by Travis Kalanick as It Reveals Plans to Repair Its Image. Retrieved May 05, 2017, from https://www.nytimes.com/2017/03/21/technology/uber-board-stands-by-travis-kalanick.html?_r=0

 

Isaac, M. (2017, March 03). How Uber Deceives the Authorities Worldwide. Retrieved May 05, 2017, from https://www.nytimes.com/2017/03/03/technology/uber-greyball-program-evade-authorities.html?_r=0

 

Kulish, M. (2015, December 16). Messaging, On-Demand, and What Comes Next. Retrieved May 04, 2017, from https://blog.gokartlabs.com/messaging-on-demand-and-what-comes-next/

 

More than 100 tech firms join legal fight against Trump’s travel ban. (2017, February 06). Retrieved May 05, 2017, from http://www.latimes.com/business/la-fi-tech-companies-travel-ban-20170206-story.html

 

Murphy, M. (2017, March 02). Uber’s CEO Wants To ‘Grow Up’ — Here’s 3 Ways He Can Start. Retrieved May 04, 2017, from https://www.forbes.com/sites/markmurphy/2017/03/02/ubers-ceo-wants-to-grow-up-heres-3-ways-he-can-start/#5beeb73145dd

 

Newcomer, E. (2016, August 25). Uber Loses at Least $1.2 Billion in First Half of 2016. Retrieved May 04, 2017, from https://www.bloomberg.com/news/articles/2016-08-25/uber-loses-at-least-1-2-billion-in-first-half-of-2016

 

Oreskovic, A. (2017, January 28). Uber CEO Travis Kalanick says he’ll talk to Trump about the immigration ‘ban’ on Friday. Retrieved May 05, 2017, from http://www.businessinsider.com/uber-ceo-travis-kalanick-will-talk-to-trump-about-immigration-order-2017-1

 

Reflecting on one very, very strange year at Uber. (2017, February 19). Retrieved May 04, 2017, from https://www.susanjfowler.com/blog/2017/2/19/reflecting-on-one-very-strange-year-at-uber

 

Shead, S. (2017, March 20). UBER IN CRISIS: How a string of high-profile problems led to Uber’s worst possible start to 2017. Retrieved May 04, 2017, from http://www.businessinsider.com/uber-in-crisis-timeline-2017-3

 

Spiegel, D. (2016, June 08). The most obvious reason to doubt Uber’s $66 billion valuation. Retrieved May 04, 2017, from http://www.cnbc.com/2016/06/08/ubers-66-billion-valuation-may-ride-on-shaky-foundation.html

 

Three key principles that drive Uber’s progress. (2016, May 19). Retrieved May 04, 2017, from http://indaily.com.au/news/business/analysis/2016/05/20/three-key-principles-that-drive-ubers-progress/

 

(n.d.). Retrieved May 04, 2017, from http://www.brandindex.com/article/lyft-overtakes-uber-perception-closes-gap-awareness

 

(n.d.). Retrieved May 04, 2017, from http://www.eyefortravel.com/distribution-strategies/uber-puts-principles-persuasion

 

6 Facts You Should Know about the President of Philippines

Rodrigo Duterte is the current and the sixteenth President of the Philippines, in office since ...

Learn more

8 Things You Need to Know About the 2017-2018 College Football Season

Preview: After a season for the ages that brought a boost in TV ratings, what will be ...

Learn more

5 Steps to build your website in two hours

How to build an E-commerce website in two hours               In the 21st ...

Learn more