Uber has long been a company that commanded the public’s attention and even captured the national imagination. It has been established as a leader in technology and innovation, with even its name being associated with those companies that come in and change their industries in ways that are significant. With this in mind, Uber has also run into some issues, and it has seen its star fall a bit of late. The company has been dealing with regulatory issues, with public perception issues, and with challenges associated with its struggling finances. Though there is still hope that Uber can be the super company it was once expected to be, some people are skeptical that the company can overcome the challenges it is currently facing. This paper provides an overview of the Uber situation. It deals with issues facing the company, institutions the company is dealing with, interests the company is fighting with and against, and how information shapes Uber’s approach.
Uber is a company that has faced significant criticism over the last few years. While the company’s name has been synonymous with innovation and market disruption, the company has increasingly come under scrutiny because of the way it chooses to treat its employees and because of sexual harassment, among other issues. While Uber seemed like a slam dunk success, and it has absolutely been the “unicorn” among private, massive tech companies, it also has a number of elements in its current environment that must be sorted out if the company is going to charge forward toward more success in the near term.
One of the issues facing Uber is the regulatory environment. The company faces a significant challenge because the regulatory environment is always shifting and changing depending on the year and which city Uber tries to enter. Rather than having one regulatory framework to deal with and work around, the company has to deal with a wide range of local ordinances and state laws, each of which can change and be different. This is why Uber thrives in Houston, but is not in Austin. There are peculiarities that have made Uber’s business model difficult to implement.
Another issue is public safety. The company has tried to displace taxi companies, and a major part of its operating agenda is to reduce costs by doing away with things like background checks, but this also makes the service potentially less safe. People are not as comfortable getting into a vehicle with a stranger as they might have been if the service was better vetted. This means that the Uber business model has a difficult thing that is hard to reconcile—how does one reconcile the realities of needing to keep costs down while not losing customers because of public safety concerns? This is the conundrum for Uber.
Another issue in the public eye is the company’s treatment of workers. In today’s business world, consumers are more and more interested in working with companies that are treating their employees well. This is why Costco has taken off and become such a popular brand. Uber has been in a constant war with its drivers. Some have claimed that Uber defrauded them. Others claim that Uber expects them to work at slave wages. The takeaway is that Uber has been in the public eye for the wrong reason—the perception that it does not care about the livelihoods of its employees.
The company’s culture has also made its way into the public eye in a manner that is difficult to handle. It has been accused of having a hyper-macho, sexist culture that is irredeemable. This issue matters on multiple levels. One, during a time when the public is increasingly aware of sexual harassment and other issues impacting women, being a company that pushes that kind of culture is far from a good thing. On top of that, the company is incurring costs associated with investigations and potential lawsuits as a result of its culture.
One of the most important interest groups surrounding Uber is the taxi lobby. Whenever an industry is as big and entrenched as the taxi industry, it is going to have a lobbying organization that will protect it from competitors and unnecessary change. The taxi lobby is bigger and stronger in some places than in others. In places like New York City, it is no surprising that Uber has been stuck with burdensome requirements, many of which were pushed by the taxi lobby. There have been issues in other places, including Charleston, South Carolina, where the taxi lobby has a strong hold over the city council.
Another interest group is the public safety lobby that concerns itself primarily with drunk driving. Uber has positioned itself as something that can help to decrease traffic fatalities through the decrease in drunken driving. When people have a cheap, convenient solution that allows them to get home without driving drunk, this is bound to help the situation. Uber has thus been aligned with MADD and other anti-drunk driving groups. These interests are powerful in their own right and make powerful allies for Uber.
In general, Uber find itself positioned against bigger interest groups that look to protect society from the changes taking place with automation. Given the company’s focus on developing a car without a driver, and given how jobs this would displace, Uber has earned enemies in those people who fear that automating jobs will make it difficult for society to maintain its current trajectory. This has caused some difficulty for Uber.
As mentioned, Uber has been accepted by some government institutions and opposed by others. It has not been an easy road for Uber in this regard. The company has spent significant amounts of money lobbying various local governments. These efforts have had moderate levels of success. In some cases, Uber has taken an outright stand against these localities, essentially calling into question their legitimacy in the first place. The company has done that by claiming that it would pay any fine received by one of its drivers for breaking an ordinance against Uber. This means that Uber was specifically telling its drivers to break a law and show that the city did not have power over the company. This made it hard for Uber to develop strong relationships with local government leaders.
The media had for a very long time been an ally for Uber, but this is shifting. Part of the reason why every other company wants to be the “Uber of X Industry” is because the media has painted Uber as being an incredible company with a perfect operating plan. However, things have begun to change, as Uber has piled up problems. There have been countless articles written about the financial struggles of the company. Especially in new and online media, Uber has become a popular whipping boy. This was not the case previously.
Public sentiment has turned against Uber. When the company took the unusual stand of trying to undercut a boycott over the immigration crisis, it lost almost a half million users in the next day in an anti-Uber movement. In general, the public has shown a willingness to look for alternatives in light of how poorly Uber has handled its affairs in this regard.
Information plays a critical role in the company’s development. For one, Uber has now become known across the world. As an entity, Uber is something that people like and recognize. It is, in nearly every way, a company that people know, but that does not mean that people trust it.
One of the biggest issues facing Uber is the fear of the unknown. The company represents something new and scary, and it is seemingly proud of this. Because Uber has been on the cutting edge of technology that has unapologetically looked to shift the world, the company has run into some resistance. This has been made even worse by the company’s desire to develop driverless cars. With these cars being developed, many people are wondering who will hire the displaced truck drivers and other people who effectively drive for a living. This uncertainty, and the fear that comes with it, has helped to drive part of Uber’s struggles of late.