5 Important Lessons You Can Learn From Uber’s Mistakes: A Case Study

Apr 20, 2017
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It’s been a bad few experiences for Uber. Revelation of sexual harassment, public blowbacks, losing money and competition forcing it to lose even more money, CEO’s shouting matches over diminishing pay, bad PR & marketing, are a few of the Uber’s worst screw-ups that led this brand to subject huge criticism in recent times.

Here, in this case study, we will get our hands on a list of lessons that can be learnt from errors made by Uber and will understand why as a brand/entrepreneur, it is required to be distant from these.

Let’s know the brand first

Uber came as the innovative startup creating possibilities for riders, drivers and cities, offering the best way to get wherever you’re going.

The ride-sharing app highlights convenience and solves transportation issues for people in need.

“Uber didn’t begin with any grand ambitions; it began as the answer to that simple question.”- Travis Kalanick – CEO of Uber

Lesson you learn from Uber

Today Uber is an innovative startup that reached the valuation of $40 billion within a few years but also has been subject to huge criticism for various reasons.

Here is a list of lessons that can be learnt from Uber’s mistakes:

#1 Public Blowbacks

During the anti-travel ban protests in the USA, users began to delete the Uber app from their mobile.  More than 200,000 users deleted the app after the company upsurge pricing.

A backlash against Uber in response to accusations that the ride-hailing service anticipated profiting from a protest on Saturday against President Trump’s executive order banning refugees and immigrants from certain countries from entering the United States.

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#DeleteUber began trending on Twitter as several thousand people deleted the app and tweeted about it.

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The Lesson
  • Don’t take action when you are angry
  • Strong use of social media

#2 Bad PR & Marketing

Uber was living in a PR & marketing nightmare, including allegations of inappropriate handling of user data, widespread sexual harassment, and stealing intellectual property from a Google spin-off. Ties to President Trump and how Uber answered to a taxi strike in New York City resulted in a viral #DeleteUber campaign on social media.

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Throughout all of the negative media coverage and issues, Uber has remained resilient and true to their core values throughout.

The lesson
  • Develop resilience will help get you through challenging times
  • Strong relationships with key influencers
  • Have a pile of positive talking points
  • Have a better solid plan for social media
  • Proactive tells positive stories

#3 Uber Losing Money

Uber is losing money faster than any technology company ever. The company has a big problem: an exceptional cash burn, which if not getting worse with every passing quarter, is certainly not getting better. The company lost $800 million in Q3 2016 on revenues of $1.7 billion.

Uber is offering lower reimbursements to their drivers. CEO stated that competition is putting a cap on Uber’s prices and profits. Competitors pointed a finger on Uber’s $69 billion valuation may be excessive and it faces even more competition.

The Lesson
  • Applied new technologies to beat competition
  • Avoid being in controversies
  • Spend money in core service

#4 CEO’s shouting matches over diminishing pay

There was a leaked video showing Uber CEO Travis Kalanick lecturing Uber driver Fawzi Kamel about ‘responsibility’ during an argument over falling Uber earnings.

Kamel complained that changes to Uber’s business model had resulted in diminishing returns to drivers.

CEO Travis has issued an apology for his behavior during the ride.

Uber has long faced criticism for its business model, which categorizes drivers as independent contractors rather than employees, allowing the company to avoid paying them minimum wage or benefits.

The Lesson
  • Need to grow up as a leader
  • Control your anger
  • Well-behave with your employees

#5 Revelation of sexual harassment

Former Employee Susan Fowler, in a fiery revelation on her blog, claimed that she and other female staffers had been subjected to sexual harassment at Uber; the company’s upper management reportedly declined to take action against him because he was a high performer.

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Uber launched an investigation into claims by a former employee of a culture of sexual harassment at the company.

Follow-up news reporting has revealed others have shared similar experiences within the company.

The Lesson
  • Having policies that outline and prohibit sexual harassment
  • Workplace free of sexual activities, so all employees feel safe
  • Protect all employees
  • No gender discrimination
  • Have a better system

Conclusion

Uber is fighting against regulators and trying to establish taxi professionals all over the world. Not only Uber, but every startup needs to understand the importance of public impression and public support. Technologies, algorithms and business model can be copied, replicated and replaced, not the goodwill.

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