In light of former attorney general Eric Holder's investigations into Uber's corporate culture, which entailed sexual harassment and discrimination probes, it is interesting to consider what other factors have contributed to Uber's declining status in addition to its PR debacles.
Since Uber's establishment in 2009, a plethora of apps followed suit to adopt the same digitized ridesharing platform that the company operates upon. In 2012, one of Uber's biggest rivals, Lyft was initiated and soon after other companies like Juno, Curb and Grab were quick to hop on to the ridesharing bandwagon. One must keep in mind that much of Uber's USP status comes from the fact that it provides fast and excellent service at a subsidized rate: yet, the organization's recent loss of top executives and questionable ethics in cohesion with a market that is rapidly becoming very saturated, threatens its position.
A big part of Uber's issues stems from its declining customer service, whether this take the form of PR scandals and failure to address certain allegations, or a less efficient screening process for drivers in order to meet growing demand. It could also be the result of Uber charging its drivers a 30% commission as opposed to companies like Juno, which charges a considerably less value of 10% thereby undercutting Uber and rerouting more efficient drivers towards itself. This can be further supported by the fact that Lyft had more positive purchase intent mentions in 2016 than Uber, moving from cutting into 7.5% to 13% of Uber's consumers.
Moreover, it seems as though Uber has spread itself too thin worldwide. Uber faces tough competition in South East Asian countries from apps like Grab, which are more specifically tailored to those regions and available in more cities than Uber is. In India, the ride-hailing service Ola dominates the market as it is present in more than 100 cities while Uber reaches only 16. Grab and Ola are also part of a larger Asian transport alliance that includes Lyft and Didi to compete with Uber and grow beyond their respective regions. Despite the fact that North America is currently Uber's largest market, the continuation rates for American Uber drivers drops to little over 50% after 50 weeks of working with Uber. This may be the result of Uber alienating drivers by cutting fares and misleading them about earnings.
Furthermore, Uber may have another PR issue on its hands if it agrees to distribute information on its riders to the government in Egypt. On the other hand, its position in Egypt-one of its fastest growing markets- is threatened if it does not agree, especially with such high levels of competition.
While Uber may be facing a lot of flak lately, it's not as if other companies are invincible. Many of the challenges Uber faces are hurdles that are characteristic of the ridesharing market; it's just that some companies are still too young to experience them. With the commoditization of such apps and an increase in competition, it is becoming even more difficult for companies to gain an edge on each other. Therefore, in order to survive in this industry, innovation and attention to customer satisfaction are of utmost importance.
- http://www.huffingtonpost.com/entry/uber-countries-governments-taxi-drivers_us_55bfa3a9e4b0d4f33a037a4b
- http://www.businessofapps.com/uber-usage-statistics-and-revenue/
- https://www.zacks.com/stock/news/263249/who-are-ubers-biggest-competitors
- https://qz.com/969601/juno-ubers-driver-friendly-competitor-sold-to-gett-for-200-million-but-left-little-for-its-drivers/
- https://www.forbes.com/sites/andyswan/2017/06/11/uber-vs-lyft-part-ii-can-they-rebound/#de8af6f7a404
- https://www.forbes.com/sites/andyswan/2016/08/31/sorry-uber-social-data-validates-the-lyft-growth-story-and-valuation-demands/2/#12ba302b7201
