Uber’s had a pretty crappy couple of weeks. News that the firm has been stripped of its London licence drove a blow into its Silicon Valley heart (and that of the 843,518 Londoners who have so far signed a petition to repeal Transport for London’s decision), and prompted the resignation of its northern Europe head, Jo Bertram.
Having been labelled as not being “fit and proper,” suddenly Uber’s mission statement of making “transportation as reliable as running water, everywhere, for everyone,” evokes images of the Great Stink more so than the transparent agility that disruptors rely on to, well, 'disrupt' the status quo.
Uber-gate shines an important light on what regulators have been skirting around for a while; with digital opening up opportunities for new businesses to solve customer problems with new efficient, technology solutions, the enforcement of regulations has been just as tardy in catching up as the defunct businesses that failed to adapt to the digital revolution.
Aren’t rules made to be broken?
Disruptors have been challenging regulators in many industries, who need to ensure fundamentals such as health and safety, employee and customer rights and tax payments are all observed. While disruptors may be lobbing traditional business models out of the window, there is still a rule-book of basic principles that need to be observed and, indeed, enforced.
Uber’s reputation has taken a beating over the past few months. Its previous chief executive, Travis Kalanick, resigned in July following a series of scandals and criticism of his management style. Staff have been fired following allegations of sexual harassment and bullying. There’s been concerns raised that assault allegations against its drivers hadn’t been reported to British police, and an increase in accidents as drivers work hours beyond what is safe to earn incentives.
I suppose you could think that it’s to be expected, given the size of the company; there’s currently well over a million drivers operating in 674 cities across 83 countries. In London alone, there’s 40,000 drivers, double the number of black cab drivers. Possibly as a result of its rapid and aggressive growth, Uber stands accused of being lax in the vetting of its drivers, therefore putting the safety of its consumers at risk.
But do customers care?
Interestingly, the accusations around Uber’s treatment of drivers and lack of focus on safety, hasn’t seemed to bother its core customer base all that much. This is despite research that shows that millennials (the 18-34 age group) wish to work for organisations that place importance on the ‘greater good’ more so than profit margins.
The Deloitte Millennial Survey 2017 states that “businesses frequently provide opportunities for millennials to engage with “good causes,” helping young professionals to feel empowered while reinforcing positive associations between businesses’ activities and social impact.” This feels contradictory when you see the uproar caused by Uber’s licence retraction. Does Uber’s convenience and affordability outweigh the ethical standards of the demographic most likely to use it? Or do those ethical standards only count if you actually work for the organisation in question? Or maybe such research is based on sweeping generalisations.
Regardless, there is clearly a lesson to be learned here. Even if your core customers are willing to turn a blind eye to the defamation of the brand, the regulators won’t. So, for disruptors to keep on doing what they do best (using innovation to make our lives easier), they must ensure that they have the processes in place to keep their practice above board, and their brand in favourable light.
A Tale of Two Lawsuits
It’s not just TfL that’s given Uber an uber-headache. A week after it sued its mobile ad agency, Fetch Media Ltd, for breach of contract and fraud, advertising technology company Phunware Inc. filed a lawsuit against Uber Technologies Inc. for breach of contract, claiming the company owes it $3.1 million.
Uber claims that Fetch misrepresented the effectiveness of its mobile ads and failed to prevent ad fraud. In turn, Phunware Inc, that was appointed by Fetch to support Uber’s digital ad campaigns, claims that Uber failed to pay five invoices owed to them.
Neither of these lawsuits is much of a surprise; the misrepresentation of mobile effectiveness and inability to police fraud is dragging the digital ad sector into disrepute, and is estimated to cost brands $16.4bn in 2017.
As Marco Ricci so rightly points out in The Drum, it’s time the industry faced some tough truths. “Let’s openly acknowledge that brands are currently wasting millions on ads that aren’t being viewed or that actively damage their brand because they are placed in unsafe environments,” says Ricci. “Acknowledging this point means also accepting that our industry has been too tolerant of too low a standard for too long.”
Those of us that work with integrity, transparency and a desire to be the best and deliver the best for our clients, continue to battle both the fraudsters and, indeed, the reputational damage to our industry.
And isn’t there a lesson there that can be learned for Uber too? Integrity, transparency and a desire to be the best they can be for their customers must be at the heart of their (undoubtedly) genius business model.