Table of Contents

Background

1.a. The Organization

1.a.i. Industry

1.a.ii. Product line and brands

1.a.iii. Product and brand

1.a.iv. Position

1.b. Target Audience(s)

1.b.i. Who are they?

1.b.i.1 Consumers

1.b.i.2 Organizations

1.b.i.3 Investors

1.b.ii. History of Relationship with the Organization

1.b.ii.1. Loyal and satisfied

1.b.ii.2. Disappointed

1.b.ii.3. Returning customers

1.b.ii.4. Non-users

1.c. The Marketing Environment

1.c.i. The Micro Marketing Environment

1.c.i.1. Customers

1.c.i.2. Competition

1.c.i.3. Suppliers, Intermediaries, Business model

1.c.ii. The Macro Marketing Environment

1.c.ii.1. Legal-political-regulatory macro environment

1.c.ii.1. Economic macro environment

1.c.ii.1. Socio-cultural macro environment

1.c.ii.1. Technological macro environment

The Marketing Communication Challenge

2.a. The Challenge

2.b. The Discovery

2.c. Level of Severity

2.d. Affected Parties

2.d.i. Uber’s leadership

2.d.ii. Uber’s employees

2.d.iii. Uber’s user base

2.d.iv. Uber’s investors

2.d.v. Uber’s competitors

The Strategic Marketing Communication Solution

3.a The Solution

3.b Alternative Solutions

Application

Integration and Fit

5.a Suitability of the Chosen Solution and its Application

5.b Extent of Integration

Results

6.a Success of Uber’s Marketing Communication in Coping with the Marketing Challenge

6.b The Most Effective Marketing Communication Activity or Channel

Critical Thinking

7.a Rebuild the Values of the HR Department

7.b Change the Performance Review System

7.c Create New Formal Communications Systems

7.d Better Address Investigation Results

7.e Rebuild Uber’s Organizational Culture

References

1. Background

1.a. The Organization

1.a.i. Industry

Uber is an international private dispatch company in the transportation industry. It was founded in 2009 by Travis Kalanick and Garrett Camp, and its headquarters are located in San Francisco, California (Crunchbase, 2017).

1.a.ii. Product line and brands

Uber owns no vehicles. Their product line is limited to mobile software for shared transportation and food delivery, although it will soon introduce hardware (Crunchbase, 2017; Uber, 2017a; UberEATS, 2017). Specifically, the company develops, operates, and markets the Uber and Uber Driver mobile apps for ride hailing and sharing transportation, the UberEATS mobile app for on-demand food delivery, and the UberFLEET mobile app that helps Uber’s partners manage their drivers (Crunchbase, 2017; Uber, 2017a; Google Play Store, 2017c). The company will soon come out with a hardware line called Uber Beacon that Uber drivers may use to identify their cars to passengers (Crunchbase, 2017). Uber also bought self-driving truck company, Otto, and may come out with a hardware line for self-driving cars depending on their court case with Google’s self-driving car unit, Waymo (Muoio, 2017; Sage, 2017).

In the Uber and Uber Driver mobile apps, riders digitally pair with regular drivers so that payment is seamless. Hailing a driver is similar to Gett, where riders turn on their GPS or type in their current location, type where they want to go, hit request Uber, and within a few minutes a driver arrives at their location. Uber tracks the ride, and at the end takes 5-30% commission, and direct deposits the rest to the driver (Pullen, 2014; Petropoulos, 2016). Riders may rate their driver on a 1-5 star system, and drivers who drop below a certain rating must pay for a driver training course (Bercovici, 2014; Pullen, 2014; Cook, 2015). Uber drivers must own a car, be insured, have an up-to-date license, pass a background check, and maintain a high enough rating on the app (Pullen, 2014).

From Uber’s original UberBLACK black car service, it has stretched up- and down-market to include a wider range of users (Pullen, 2014). Types of rides that riders may request include uberPOOL, uberX, uberXL, UberSELECT, UberTaxi, UberBLACK, UberSUV, UberLUX, and Accessibility (Uber, 2017c). UberPOOL is Uber’s carpool service and lowest cost option (Dough, 2016; Uber, 2017c). UberX, uberXL, and UberSELECT are the regular rides and lower cost than the luxury options. UberX is the cheapest, while uberXL seats more people, and UberSELECT is an entry-level luxury service that includes cars with a leather interior (Pullen, 2014; Dough, 2016; Uber, 2017c). UberTaxi is a referral service for taxi drivers through the app (Pullen, 2014). UberBLACK is Uber’s original service, sending a high-end town car with a professional driver; UberSUV charges a premium for a larger vehicle; and UberLUX targets consumers who want a luxury ride in a Porsche or BMW (Pullen, 2014; Dough, 2016; Uber, 2017c). Accessibility include rides that are accessible for wheelchairs or come equipped with car seats (Uber, 2017c). Pricing includes a base fare, cost per minute, cost per mile, and minimum fare according to the ride type, and it is not customary to tip the driver (Fontinelle, 2016).

1.a.iii. Product and brand

Uber is seen as a leader in transportation technologies, from their innovative development of ride hailing apps to their recent focus on self-driving cars (Fast Company, 2017). By creating the first ridesharing app that lets almost anyone with a car to be a driver and opens rides to any time of day, Uber drivers can pick up riders much faster than ordinary taxi companies and can drive later than public transportation remains open (Goetz, 2016). Because Uber tracks users’ rides and requires drivers to own an up-to-date license and clear a 7-year background check, Uber is perceived as a safe transit option (Goetz, 2016). Finally, the Uber app streamlines the service so that users can see how far away their driver and rider are in real-time, and so that users do not need cash or a credit card during payment. Safety, the streamlined service, and rides anywhere at all times of day let riders avoid the cost of owning a personal vehicle and let drivers earn part time work for hours that they would have been idle (Goetz, 2016; Horn, 2016). Uber’s ride hailing market share in the last quarter of 2016 is 52% of total ground transportation transactions, up from 40% since the last quarter of 2015 (Hagan, 2017). This increase may have affected a drop in taxi market share to 33% and a drop in rental car market share to 11% of total ground transportation transactions in the last quarter of 2016 (Hagan, 2017). While Lyft, a competing ride hailing service, doubled its growth since the last quarter of 2015, it holds only 4% of total ground transportation services (Hagan, 2017). The speed at which Uber has caught onto and dominated the car service and ridesharing markets since its founding in 2009 has helped to increase its brand equity and be seen by its target markets as better than the incumbents (e.g. taxi services, black car services, limo services, rental car services) (Horn, 2016; Richter, 2017). The lower prices, partly due to owning no vehicles, let Uber compete up-market against limo and black car services (Horn, 2016). Owning no inventory also lets Uber compete in the current market against taxi and rental car services, as each additional ride becomes almost pure profit (Horn, 2016; Richter, 2017). Uber’s use of incumbent taxi, limo, and paid car service drivers, as well as its ability to work alongside other ridesharing apps like Lyft, appeals to drivers because Uber taps their excess capacity, letting them work when they would have been idle (Horn, 2016).

However, to remain on top, Uber uses questionable strategies that may have negatively affected their brand equity. To remain on top, Uber traps many drivers by allowing them to loan a car through Uber and pay for it by giving rides to Uber customers (Kosoff, 2014). Drivers feel burdened to drive for Uber, rather than driving for competitive ride hailing apps, and feel resentment toward the company whenever Uber lowers prices for riders (Kosoff, 2014; Bhuiyan, 2017, Feb 3). At the same time, Uber’s CEO was criticized for serving on Donald Trump’s business advisory committee and for taking advantage of a strike by taxi drivers opposed to Trump’s ban on refugees by eliminating surge pricing in New York’s John F. Kennedy Airport (Dua, 2017; The Economist, 2017). A #deleteUber social media campaign began because of this and caused more than 200,000 uninstalls (Bhuiya, 2017, Feb 3; Isaac, 2017, Jan 31; Isaac, 2017, Feb 2; The Economist, 2017).

Further questionable behavior and business strategies, including workplace sexism, sexual harassment, and racism; organizational chaos; privacy invasion that oversteps users’ privacy agreements; other legal concerns; and leadership shortcomings, have piled on top of each other throughout Uber’s history since its founding in 2009, negatively affecting their brand equity. The pubic sexism began In 2014 when Uber’s CEO Travis Kalanick called Uber “Boob-er” because it helped him get dates (Rapkin, 2014). That same year in France, Uber promoted itself by saying that they would pair riders with “hot chick” drivers, and their website showed pictures of women wearing no pants or tops and posing with their behinds above their heads or holding a long object in front of their mouths (Kosoff, 2014; Warzel, 2014). A recent barrage of negative press against Uber have revealed rampant gender and racial discrimination, sexual harassment, and organizational chaos within the company. The well broke in 2017 with a blog post from former Uber site reliability engineer (SRE), Susan J. Fowler who wrote about the sexism and sexual harassment that she experienced and heard that others experienced within the company. In her blog post, Fowler wrote about her manager’s sexual advances and HR’s victim silencing and defense of the guilty parties as “high performers” and claims that it was their “first time offense” despite knowing about all of their previous offenses (Fowler, 2017a). The end result was a perception about the company’s culture as being adversarial and combative (Dua, 2017). The #deleteUber campaign reinvigorated after Fowler’s post, and subsequent legal and journalistic investigations into Uber’s corporate culture have normalized the production of negative articles about the company, further threatening Uber’s brand equity (Bhuiyan, 2017, Feb 20). One article explains that the discrimination trickles down from the top: Travis Kalanick conceives of HR’s role as focusing on scaling and recruitment and not on mitigating workplace issues, making 10 HR representatives handle training and sexual harassment for 6,000 employees at the beginning of 2016, and 20 HR representatives handling 9,000 employees at the end of 2016; and that even though Kalanick said recently that he will start publishing a diversity report, it may be seen only as damage control, as he had opposed it in the past (Bhuiyan, 2017, Feb 21). It is no wonder that the head of HR, the head of HR for product and tech, the head of HR and recruiting in Europe, the Mideast, and Africa, the HR director, the head of global HR operations, and the head of people operations all left the company at the end of 2016 and beginning of 2017 (Bhuiyan, 2017, Feb 21).

Privacy issues include illegal user data-use that goes outside the bounds of its privacy agreement. A recent New York Times article revealed that in 2015 Uber was invading people’s privacy according to a report that Apple’s CEO Tim Cook scolded Uber’s CEO Travis Kalanick to stop tagging iPhones without users’ permission (Isaac, 2017, Apr 23; Wagstaff, 2017). In 2014 Uber had also been unethically stealing its competitor Lyft’s user-data in order to keep an eye on its pricing and the health of its business (Isaac, 2017, Apr 23). Uber used this information to play dirty: they sent many employees to order and cancel Lyft rides, and sent others to hail Lyft rides in order to convince the drivers to work for Uber (Isaac, 2017, Apr 23). Early this year Uber has been using a software feature called Greyball to make their app fail to produce drivers for city officials who try to catch them working in regulated areas where Uber is not allowed to run (Isaac, 2017, Mar 3; The Economist, 2017). Aside from evading legal regulations, Uber crossed privacy boundaries when they used Greyball to steal city officials’ data in order to identify them.

Additional legal issues surround Uber, including the current court case where Waymo, the self-driving car unit of Google’s parent company, Alphabet Inc., is suing Uber over allegations of stolen information (Isaac & Wakabayashi, 2017; Muoio, 2017; Sage, 2017; The Economist, 2017). Waymo alleges that a former Google employee and Uber’s current point person on their self-driving car, stole confidential information on Waymo’s LiDAR laser scanning technology before leaving the company and founding a self-driving truck company, Otto (Isaac & Wakabayashi, 2017; Muoio, 2017; Sage, 2017; The Economist, 2017). Uber then bought Otto and jump-started their self-driving car unit using technology similar to Waymo’s LiDAR systems (Isaac & Wakabayashi, 2017; Muoio, 2017; Sage, 2017; The Economist, 2017).

Further leadership issues have come to light. Uber’s Senior VP Emil Michael, who suggested in 2014 that Uber dig up dirt on journalists who weren’t friendly to the company, is still working at Uber (Pallotta, 2014; Smith, 2014; Swisher & Bhuiyan, 2017, Mar 3). A recent video of Kalanick emerged where he argues with a driver over fares, saying, “You know what, some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck,” before getting out of the car (Bhuiyan, 2017, Feb 28). The video only reinforces his culpable role in Uber’s problematic culture, and does little to help Uber's brand equity. Digiday quotes the founder and CEO of Vivaldi Group calling Uber the “Trump of brands” because, like Trump, Uber is popular yet polarizing and ethically concerning (Dua, 2017).

Digiday quotes PR and public affairs expert Chris Allieri from Mulberry & Astor who says that, “It’s getting harder and harder to love Uber for anyone with a conscience. It’s not sheer bad luck; it’s a series of missteps” (Dua, 2017). Uber’s leadership is being called into question. Seven key executives have left Uber in the past nine weeks, including the former head of self-driving car technology, the head of the AI research lab, and Uber President of six months, Jeff Jones, who explained that his beliefs on leadership were “inconsistent” with what he experienced at Uber (The Economist, 2017).

Despite being a leader in the industry, Uber’s brand equity is important. Even though Lyft has 4% of total ground transportation worldwide compared to Uber’s 52%, Lyft has a closer margin in specific places such as in certain U.S. cities (Hagan, 2017). For example, in San Francisco, Lyft has 30% marketshare of ridesharing transportation compared to Uber’s 53% (Rayle, Shaheen, Chan, Dani, & Cervero, 2014; Ovugo, 2017). Uber is under pressure to manage their brand image not only because of their partners’ reputations but because of close competition in certain locales.

However, it is easier for larger companies to bounce back from negative press. Strong brands have improved perceptions of product performance and greater customer loyalty, among other advantages (Beardwood, 2016; Gvili, 2017, Apr 26). Despite being subject to a greater spotlight for misbehavior, the strength of a brand can help it recover quickly from negative PR if the incident is managed well (Gvili, 2017, Apr 26). Uber’s fast growth and leadership of the ground transportation market gives it leverage to take back their market after properly responding to its present concerns (Solomon, 2015). Uber’s CEO is taking steps to manage his company’s PR crisis. After the #deleteUber campaign against Uber, the company helped users do this by setting up an ad hoc automated system for deleting accounts because of the volume of delete requests (that it had until then done manually) (Isaac, 2017, Jan 31). Kalanick concurrently stepped down from Trump’s advisory council, and the company also announced that it has set aside a $3 million fund to help drivers affected by Trump’s immigration ban (Hawkins, 2017; Heater, 2017; Isaac, 2017, Feb 2; Kalanick, 2017, Jan 29). After Fowler’s blog post, Kalanick ordered an investigation into Fowler’s claims (Isaac, 2017, Feb 19; Swisher, 2017, Feb 20). He also said that he will publish a diversity report, without apologizing for the poor diversity numbers (Bhuiyan, 2017, Feb 21). SVP of engineering, Amit Singhal, was asked to resign during the investigation into Fowler’s claims because he had not disclosed that he was the subject of a sexual harassment investigation at Google where he previously worked (Swisher, 2017, Feb 27). After the video came out of Kalanick yelling at a driver, the Uber CEO published an apology, saying that he must grow up and that he intends to get leadership help (Kalanick, 2017). A board member is helping Kalanick direct a search for a chief operating officer to keep the CEO in check and bring discipline to Uber’s culture (Benner, 2017; The Economist, 2017). From the beginning of 2017 until the first week in March, Uber’s market share in the U.S. has dropped from 80% to 74%, with many users opting for Lyft (The Economist, 2017). Uber may make it out of its current mess, but further incidents may stall the process and bring even more users to its competition.

1.a.iv. Position

Uber operates in 581 cities worldwide (Uber, 2017b). According to the Economist, ridesharing services accounted for 46% of business ground transportation trips in the U.S., with car hiring services at 40% and taxis at 14% (B.R., 2016). And Uber is a leader in U.S. ridesharing transportation, with a market share of 69-80% (B. R., 2016; Hartmans, 2016). Its top ridesharing competitor in the United States is Lyft with a market share that doubled this past year from 2% to 4% and which recently received the support of General Motors and Apple (B. R., 2016; Huston, 2016). Other competitors include Curb in the U.S., Via in the U.S., Grab in Southeast Asia, Ola in India, and Cabify in Latin America (B. R., 2016; Johnson, 2017, Feb 6; Lunden, 2017; The Economist, 2017). Uber recently lost to Didi Chuxing in China which bought Uber in exchange for Uber’s 20% stake in their firm (Johnson, 2017, Feb 6). Google’s Waze may become a new competitor if they expand its navigation app to include a carpool option (Nicas, 2017; Stein, 2017).

Uber is also in competition with self-driving car companies. Uber recently acquired Otto, a self-driving truck startup, and is in a race with industry behemoths such as Alphabet Inc. (Google), Apple, Tesla Motors, and possibly Samsung to develop self-driving cars (Johnson, 2017, Apr 10). Further, autonomous vehicle technology is popular in many other startup ventures that automobile brands and technology companies are eating up. Ford Motor just announced its plans to invest $1 billion in Argo AI, an artificial intelligence startup that focuses on developing autonomous vehicle technology (Isaac & Boudette, 2017). Intel recently purchased autonomous vehicle technology startup Mobileye for $15 billion (Cohen, Rabinovitch, & Lienert, 2017)). Qualcomm is set to purchase NXP, the leading semiconductor supplier for secure identification, automotive, and digital networking industries, for $38 billion (Chee, 2017). Nvidia Corp created a new deep learning AI platform for self-driving cars, and car companies such as Bosch and Toyota are its new clients (Knight, 2017; Korosec, 2017; Shapiro, 2017). Uber is worth close to $70 billion (Beardwood, 2016; The Economist, 2017). Delphi, another competing global supplier of autonomous vehicle technology, is teaming up with Transdev, a leader in mobility network operation, to created automated, on-demand mobility systems (Etherington, 2017, Jun 8). Uber’s equity funding totals to $11.56 billion in 16 rounds from 79 investors, and has yet to go public (Shead, 2016; Crunchbase, 2017). Uber currently has 29 partners (Crunchbase, 2017).

1.b. Target Audience(s)

1.b.i. Who are they?

1.b.i.1 Consumers

Uber’s target consumers are young educated and affluent males aged 25-24 who live in urban environments, own fewer vehicles on average, use rideshare apps along with other public transit, and are comfortable making mobile commerce purchases (Rayle, 2014; Ovugo, 2017). Only 14% of drivers were female as of 2015, as women self-select out of this position: despite the safer, streamlined payment system, drivers are still driving alone at night and picking up strangers, and women feel less comfortable doing that compared to men (Huet, 2015). The target consumers typically ride to home/residential addresses, workplaces, tourist destinations, restaurant, bars, and food locations, and airports (Rayle, 2014; Ovugo, 2017). Additional locations that rideshare consumers go are retail stores, fitness clubs, doctor’s offices and hospitals, bus and transit stations, hotels, sporting and entertainment events at stadiums, night clubs, grocery stores, shopping centers, bakeries, colleges and universities, coffee shops and cafes, department stores, and pharmacies (Rayle, 2014; Ovugo, 2017).

1.b.i.2 Organizations

Some of Uber’s target organizations are advertising agencies, small businesses, and brands who want to design campaigns that will reach Uber users through the Uber app (Ovugo, 2017). These organizations may go through third party apps, such as ones like Vugo, a rideshare advertising app that helps these organizations target rideshare users (Ovugo, 2017). For example, retailers inside a shopping center may target riders who use Uber to go to that shopping center with awareness advertising and promo codes in order to increase users’ wallet share at their store (Ovugo, 2017). Or, for example, beer brands can target riders who use Uber to go to a bar or club in order to influence the type of drink they ask for once they arrive (Ovugo, 2017). Uber’s target organizations would take into account Uber’s target consumer in order to advertise to the right audiences.

1.b.i.3 Investors

Investors include Benchmark, Citigroup, First Round, Fidelity Investments, Glade Brook Capital Partners, Goldman Sachs, Google Ventures, Jay-Z, Jeff Bezos, Letterone Holdings SA, Microsoft, Morgan Stanley, Qatar Investment Authority, Saudi Arabia’s Public Investment Fund, and Tata Capital, as well as seed investors Garrett Camp and Uber CEO Travis Kalanick.

1.b.ii. History of Relationship with the Organization

1.b.ii.1. Loyal and satisfied

Since 2014, numerous workers agreed that working for uber has not only been super convenient but also flexible. Employees from Uber’s headquarters affirmed that the company has been positively consistent with their benefits, culture, promoting physical health, and promoting a young environment (Glassdoor, 2017). One employee goes on to say that the corporation has created a well-built start up atmosphere. The workplace is an open space with no employees stuck in a cubicle. Managers are open to discussion regarding issues that may occur during work hours (Glassdoor, 2017).

Many users are also satisfied with the Uber app. They describe it as “simple,” easy to use, and “easier than trying to find a normal cab” (Sitejabber, 2017). Drivers are “always around” so that riders do not have to wait long, and cars are clean (Sitejabber, 2017). Some users say that they can no longer live without the Uber app (Sitejabber, 2017).

1.b.ii.2. Disappointed

Other Uber employees are disappointed with its toxic workplace culture. Complaints include Uber’s organizational chaos, mistrust and sabotage among workers, and ingrained sexism. Numerous employees described the organization and structure of the company as chaotic and “overflowing” because of a continual pattern of mid-project breakdowns and pushed deadlines (Glassdoor, 2017).

Female employees have expressed how difficult it is to grow inside the company. Women were often ignored and not invited to important team meetings. In some cases male colleagues took credit from female engineers for finished projects. For example, after one female employee had worked on an entire project herself, her male manager presented it to higher-level administrators leaving her with no recognition or credit. She did not report this issue to HR because word gets back to the managers and she was afraid that her manager would give her a poor performance review (Glassdoor, 2017).

Another female employee expressed her shameful experience working for Uber as co-workers and managers ignored her existence. She explained, “if you're a woman, be prepared to be chronically cut off mid-senten” (Glassdoor, 2017). (Note: her review included the full word “sentence” but we changed it for emphasis.) Because of her gender, she explained, she was frequently second guessed. When she gave input she was called a “pussy” (Glassdoor, 2017). She did not speak up because she was worried about receiving a negative performance review (Glassdoor, 2017).

In the field of shared rides Uber is ranked 2.9 stars out of five. Votes included reviews from workplace employees, drivers, and riders. Drivers claim that working for Uber as a driver full time is not enough to support them financially: most drivers work two jobs (Glassdoor, 2017). Uber does not help support cost for expenses such as gas and other commonalities, which causes drivers distress (Glassdoor, 2017). Rush hour work in large cities pays well, but drivers complain that working in smaller cities pays little. A suggestion that frequently arose was that Uber should allow the drivers to accept tip. Most reviews stated that Uber takes advantage of their drivers by not paying up to par or offering benefits (Glassdoor, 2017).

Riders were frequently disappointed with the way Uber was set up. Wait time tended to be over twenty minutes, and drivers let them off before they reached their destination, leaving them to walk (Sitejabber, 2017). Riders also complained about surge pricing. Because Uber charges by the minute not only while idling as taxis do but while driving as well, many riders wrote that they preferred to take a taxi during rush hour because it is more cost effective (Sitejabber, 2017).

Shortly after the #deleteUber campaign, Lyft soared up to the top 10 chart of the app store. Users were leaving Uber for Lyft (Millot, 2017).

1.b.ii.3. Returning customers

Following the publicization of former Uber engineer, Susan Fowler’s sexual harassment scandal, there has been an exodus of top executives. The heads of Uber’s engineering, self-driving, ridesharing, mapping, AI, product development, and communications departments left the company within months of each other (Isaac, 2017, Apr 12). Because of Fowler’s publicized review, Uber as a software company may suffer in the future from lack of experts. Software companies like Google, Apple, and Facebook are known for their happy work environments and high salaries; Uber’s workplace culture may convince quality engineers to work for other companies (Newcomer, 2017, Feb 23).

Until 2017, Uber had experienced a steady increase in users. However, after the first #deleteUber campaign in January 2017, when users believed that Uber was profiting from a taxi strike during Trump’s immigrant ban, the Uber app received 200,000 uninstalls. In February 2017, Susan Fowler’s publicized blog post about sexism and sexual harassment at the company reinvigorated the #deleteUber campaign. Concurrent to Uber’s user exodus, its competitor Lyft experienced a surge in new users in the U.S. This example demonstrates how much of an impact harassment and sexism can change a brand’s perception (Millot, 2017).

However, many users continued with Uber despite the #deleteUber campaigns because of financial reasons. One tactic that Uber uses to increase and keep its user base is to give promotion codes for free rides. An existing rider who refers a new rider to install Uber and sign up will receive Uber credit. This strategy encourages existing users to remain with Uber while increasing their user base (Alvia, 2017).

1.b.ii.4. Non-users

Only 6% of mobile users in the U.S. hail a ride through Uber and Lyft (The Economist, 2017). While there is a large potential for growth in the ridesharing apps, Uber has many non-users. Non-users tend to be women, older adults, and less affluent people (Rayle, 2014; Ovugo, 2017).

Only 14% of drivers in 2015 were female, as women self-select out of this position: despite Uber’s streamlined payment system and user rating system, drivers are still driving alone at night and picking up strangers, and women feel less comfortable doing this compared to men (Huet, 2015).

.

1.c. The Marketing Environment

1.c.i. The Micro Marketing Environment

1.c.i.1. Customers

Uber’s target consumers are young, educated, and affluent males aged 25-24 who live in urban environments, own fewer vehicles on average, use rideshare apps along with other public transit, and are comfortable making mobile commerce purchases (Rayle, 2014; Ovugo, 2017).

Among Uber’s target consumers there are multiple segments. Each of Uber’s ridesharing services targets a different segment. UberPOOL, Uber’s carpool service, is the lowest cost option that targets students, young adults, and those with less disposable income (Pullen, 2014; Uber, 2017c). UberX, uberXL, and uberSELECT are lower cost options that targets working adults and those in a rush (Pullen, 2014; Dough, 2016; Uber, 2017c). UberTaxi is a referral service that targets the usual taxi passenger (who wants to pay less, hail the taxi through the app, and streamline payment) (Pullen, 2014). UberBLACK, UberSUV, and UberLUX are premium services that target professionals and people who wish to show off (Pullen, 2014; Dough, 2016; Uber, 2017c). Accessibility targets the handicapped and parents who need a car seat (Uber, 2017c).

Uber works with third party apps, such as rideshare advertising apps, that target ads from advertising agencies, small businesses, and brands to Uber’s different market segments (Ovugo, 2017). Riders who take an Uber to a bar, for example, may see ads along the way for alcohol brands and have more of an idea of what they will order once they get there. Drivers may see ads for gas stations and blogs about how to receive high ratings as a ridesharing driver. Targeted ads enable many companies to work with Uber, and may also provide added value to users. However, these same third party rideshare advertising apps also work with Uber’s competitors, and businesses who want to display ads, as well as app users, may receive a similar ad experience independent of the ridesharing company that they use.

Uber’s users, either riders or drivers, have low switching costs, increasing the threat of buyers’ bargaining power (Arguelles, 2015; Bercovici, 2014). Uber does not incur a threat of suppliers’ bargaining power because it owns no inventory and streamlines their service without using suppliers or intermediaries.

1.c.i.2. Competition

While taxi companies must go through much regulation, such as professional dress code, regular maintenance, matching paint job, predictable fare (no surge pricing), background checks, a bureaucratic and expensive rental system, and memorization of a city’s routes, business locations, and places of interest, Uber has had to deal with little regulatory requirements since its founding (Sununu, 2014; Mitchell & Farren, 2015). Memorizing a city layout is unnecessary in the age of smartphones and almost anyone with a car can be a driver (Sununu, 2014). Uber’s speed of service and streamlined payment system trumps inconveniences such as surge pricing (Frizell, 2014). Because Uber also requires potential drivers to pass background checks, and additionally requires drivers to maintain high ratings in order to remain in service, safety is a low issue (Frizell, 2014; Sununu, 2014). Nowadays, conglomerate companies such as airports that control which taxi services they coordinate with, are cutting the taxi airport monopoly and choosing Uber and other ridesharing apps such as Lyft among their ground transportation partners (Yamanouchi, 2016). Other conglomerates are choosing sides and supporting one ridesharing service over the other. Apple, in a race with Uber over self-driving car technology, invested $1 billion in Lyft in 2016 which may lead Uber’s competitor to iPhone integration (B. R., 2016; Huston, 2016; Johnson, 2017, Apr 10).

After Uber introduced the business model of ride hailing, other ridesharing startups followed suit using similar smartphone technology. Despite having a timing, capital, and market share advantage, Uber does not have a technological advantage over its ridesharing competitors.

However, Uber and other ridesharing services do have a technological advantage over other ground transportation. Most taxi and rental car companies do not streamline their services through an app, and customers must go to a pickup location and pay using a credit card or cash. Recent startup car sharing apps involve a different business model that has not yet been perfected, and streamlined car rental startups have a slower growth rate than ridesharing startups because they require inventory. Further, ridesharing competition include car companies and car insurance companies because Uber and other ridesharing apps let riders travel wherever and whenever they want without the costs of paying for and maintaining a car. At the moment, most car companies have an irrelevant technological advantage in relation to Uber’s business model. In regard to smart-technology, car-equipped navigation software is available through navigation apps on any smartphone. Now that Uber bought self-driving truck startup Otto, it is also in the race to create self-driving cars among top players like Tesla Motors, Alphabet Inc.’s Waymo, Apple, and Samsung (Johnson, 2017, Apr 10). As self-driving technology is still in research and testing stages, Uber’s technological advantage in this domain parallels the market. And while Uber is behind Tesla Motors in electric car technology, it may easily add an uberGREEN option to its brand line for environment-conscious riders when the technology matures or Tesla models become more popular on the road.

In the economic competitive environment, ridesharing business models gain the market in ground transportation because of a potentially unlimited fleet of vehicles and lower operational costs (Horn, 2016). Uber leads the pack with the highest valuation and may use this to control pricing (BI Intelligence, 2017). However, low entry barriers makes the threat of new entrants an unattractive component of the rideshare industry. The threat of intense segment rivalry is also unattractive, as strong rideshare competitors emerge quickly and may operate under few fixed costs.

Uber keeps track of their top U.S. competitor Lyft’s pricing to remain competitive (Isaac, 2017, Apr 23). While Uber and Lyft may charge $24-25 dollars for a ten minute ride at non-surge times, a taxi company may charge $34.

Uber (and other ridesharing apps) let drivers work for multiple ridesharing companies in order to steal potential drivers from competitors, and attempt to maintain its user-base by giving incentives (Meyer, 2016; Scheiber, 2017).

One economic weakness may be Uber’s unpredictable business model. However, an unpredictable business model may throw a curveball to other ridesharing and self-driving car competitors that are racing to lead one of the most lucrative industries in the world.

Another economic weakness of the global ridesharing company is that it has weak knowledge of local markets. Uber recently lost the ride hailing battle in China to competitor Didi Chuxing to whom they left the market in exchange for a 20% stake in their firm (Johnson, 2017, Feb 6). While Uber originates in San Francisco, USA, it has local competitors in each region that it tries to monopolize (B. R., 2016; Johnson, 2017, Feb 6; Lunden, 2017; The Economist, 2017).

Weaknesses in Uber’s socio-cultural environment seem worse than the environment of their competitors. Uber drivers have to be highly rated in order to remain employed. Out of five stars, their average must be above 4.6 or risk getting deactivated (Bercovici, 2014; Pullen, 2014; Cook, 2015). This strategy may enable a good environment for riders who can be sure that their driver is trustworthy and efficient. Drivers, however, may become stressed from the pressure to maintain a high rating, especially when dealing with ignorant riders who do not understand that giving a standard rating of 4 stars for a pleasant ride may be a deactivation sentence for the driver (Cook, 2015). Further, Uber drivers have a history of complaining about low driver earnings, some of them switching to drive for Lyft (Lazzaro, 2016; Bhuiyan, 2017, Feb 3; Google Play Store, 2017b). Juno, a rival ridesharing company to Uber that was recently bought by Gett, was known to treat their drivers better: Juno took less of a commission and let riders keep more of the ride fare. Juno’s driver-to-employee ratio was lower, and each driver received twenty-four-hour support with a real person on the line and not a bot. Drivers were also allowed to earn ownership stake at Juno in restricted stock units (Kolhatkar, 2016).

Additional weaknesses in Uber’s workplace environment may include its ethically questionable leadership and arrogant executives. A former Uber engineer’s blog post about workplace sexism and HR’s failure to act on sexual harassment claims has continued a surge in negative press and app uninstalls since the first #deleteUber campaign in January (Dua, 2017; Fowler, 2017a; Isaac, 2017, Jan 31; Isaac, 2017, Feb 2; The Economist, 2017). The press was quick to draw links between Uber’s history of CEO Travis Kalanick’s poor leadership and a recently published video of him yelling at a driver over the company’s pricing strategy (Bhuiyan, 2017, Feb 21; Isaac, 2017, Apr 23).

Multiple privacy issues have arisen recently that aggravate allegations of Uber’s already ethically questionable leadership. One issue was that Uber had attempted to track user data by tagging iPhones, which is against Apple’s terms of service. This only ended when Tim Cook told Travis Kalanick that he would not let the Uber app work on the iPhone if he kept up his antics (Isaac, 2017, Apr 23; Wagstaff, 2017). Another issue is Uber’s recent update that tracks users even after they close the app (Petropoulos, 2016; Temperton, 2016). Uber’s explanation that the benefits include pickup and drop-off accuracy may reduce the risk to their brand equity. And since it seems like users may turn the feature off, users’ perceptions of privacy may return (Temperton, 2016). A third privacy issue that has come up recently, and that may also weaken Uber’s political klout, is the recent discovery of and criminal investigation into its Greyball tool that illegally gathered information about local authorities in order to enable drivers to evade them in areas with hostile legal regulations (Isaac, 2017, Mar 3; The Economist, 2017).

1.c.i.3. Suppliers, Intermediaries, Business model

Uber’s innovative business model and disruption of the ground transportation industry has much to do with the fact that the company owns no inventory and streamlines their service without using suppliers or intermediaries. Uber has turned into the market leader for ground transportation services because of the quality of employees that they hire. Uber uses the best engineers and experts in the industry (Glassdoor, 2017; Newcomer, 2017, Feb 23). Uber’s customers therefore include potential employees who may be enticed to work for the company, as well as quality employees that they want to retain for the long term.

1.c.ii. The Macro Marketing Environment

1.c.ii.1. Legal-political-regulatory macro environment

Political threats to Uber’s business model include hostile legal regulations and conflicts with local authorities (Petropoulos, 2016). Uber was recently caught attempting to circumvent such regulations with its Greyball tool, and this may not bode well for their political klout in the future (Isaac, 2017, Mar 3; The Economist, 2017). At the moment, Uber is researching self-driving car technology in order to create a more efficient ridesharing and delivery service; but a self-driving car industry may invite increased legal regulations on its services (Fast Company, 2017; Isaac & Wakabayashi, 2017; Johnson, 2017, Apr 10; Muoio, 2017; Sage, 2017; The Economist, 2017).

1.c.ii.1. Economic macro environment

One economic opportunity that Uber takes advantage of is exploitable markets in countries without proper taxi services. However, as local ridesharing competitors rise in these countries, Uber may be at a disadvantage due to weak knowledge of local markets. Another economic opportunity is the growing number of Uber’s drivers and its 89% retention rate within six months of starting (Solomon, 2015). Uber’s quick market takeover and exponential gain in revenue is astonishing when comparing these numbers to the number of smartphone users who do not use ridesharing services. Only 6% of mobile users in the U.S. hail a ride through Uber and Lyft: the potential for growth in the ridesharing apps is huge (The Economist, 2017).

Economic threats include inactive users, user uninstalls, and Uber’s competitors. An economic threat, however, has been the greater than 50% inactivity rate within one year of starting (Solomon, 2015). Over the years, however, Uber has figured out sophisticated and gamified psychological tricks to induce drivers to remain working for them, for longer hours, and in more obscure locations (Scheiber, 2017). Another economic threat is user uninstalls due to negative press against the company and lowered brand equity, and subsequent switching to Uber’s competitors (Bhuiya, 2017, Feb 3; Bhuiyan, 2017, Feb 20; BI Intelligence, 2017; Isaac, 2017, Jan 31; Isaac, 2017, Feb 2; The Economist, 2017; Weise & della Cava, 2017). Switching costs of ridesharing apps are low and this gives users power over ridesharing companies (Arguelles, 2015; Bercovici, 2014). A related economic threat is Uber’s growing competition. Its top ridesharing competitor in the United States, Lyft, has doubled its market share this past year from 2% to 4%, and recently received the support of General Motors and Apple (B. R., 2016). Further, Lyft’s market share is greater within the U.S. and has increased dramatically during Uber’s marketing challenge toward 40% market share in multiple U.S. cities (Hagan, 2017; Steinmetz, 2017).

1.c.ii.1. Socio-cultural macro environment

Socio-cultural opportunities include potential customers who are dissatisfied with other cab companies (Sununu, 2014). Driving for cab companies entails much legislation and driver regulations, and users must go through intermediaries to request and fill ride orders (Sununu, 2014). Uber’s streamlined service enables a more efficient business model that users have responded to, and Uber’s lack of inventory involves less legal regulation (Sununu, 2014; Mitchell & Farren, 2015; Horn, 2016). Further, Uber may incorporate additional services into its business model. Case in point, uberEATS uses the ridesharing model in order to deliver food across and between cities (UberEATS, 2017). Uber may use their business model to continue expanding their services to uncover or include new market demands. For example, Uber may respond to the values of its young user base and include an environmental brand line to its types of rides when electric car technology matures or becomes more popular among drivers. Or, Uber may attempt another upmarket stretch to include helicopter rideshares into its premium brand line. Further, Uber’s research into self-driving cars may completely automate their already streamlined service so that rides and deliveries become even more reliable, efficient, and safe (Fast Company, 2017; Isaac & Wakabayashi, 2017; Johnson, 2017, Apr 10; Muoio, 2017; Sage, 2017; The Economist, 2017).

However, because Uber keep its service competitive due to competing rideshare companies, socio-cultural threats include unhappy drivers who may become inactive or switch to competing companies due to bouts of low pricing (Bhuiyan, 2017, Feb 3; Bhuiyan, 2017, Feb 21; Bhuiyan, 2017, Feb 28; Isaac, 2017, Feb 23; Isaac, 2017, Apr 23; The Economist, 2017).

1.c.ii.1. Technological macro environment

Technological opportunities are endless with Uber’s business model and research into self-driving car technology. Because Uber’s business model makes market stretching simple to incorporate, Uber may easily add an environmental ride types when electric car technology matures and becomes more popular. Uber is also involved in an existential race against top conglomerates Tesla Motors, Alphabet Inc.’s Waymo, Apple, and Samsung to grab the self-driving car market (Fast Company, 2017; Isaac & Wakabayashi, 2017; Johnson, 2017, Apr 10; Muoio, 2017; Sage, 2017; The Economist, 2017). A competitive share of this market would enable Uber to automate their already streamlined ridesharing and food delivery service to enable greater peak efficiency.

2. The Marketing Communication Challenge

2.a. The Challenge

The marketing communication challenge that Uber faces is a wave of app deletes, a drop in brand equity, and a 16% drop in market share. Uber has a history of ingrained sexism and sexual harassment within the organization that trickles down from its CEO, Travis Kalanick (Bhuiyan, 2017, Feb 21). While Uber faces other legal and privacy issues that are prevalent among Silicon Valley startups, the recent spotlight on its sexism and concurrent victim blaming by its HR department has opened the door for a deluge of negative social media and press against the company. The #deleteUber social media campaign reinvigorated after Fowler’s post, fueling considerably more app deletes, and a high volume of reporters are not only publishing every bit of new information relevant to the ongoing investigation of Uber’s sexist culture, but spotlight its other legal battles and leadership issues with renewed vigor (Bhuiyan, 2017, Feb 20). The repercussions of Fowler’s post are huge. From the beginning of 2017 until the first week in March, Uber’s market share in the U.S. has dropped from 80% to 74%, with many users opting for Lyft (The Economist, 2017).

2.b. The Discovery

Uber’s sexist and victim blaming environment was reported this past February 2017 by former Uber engineer Susan J. Fowler in a blog post that she wrote and published to her website (Fowler, 2017a). Fowler then linked her blog post on twitter (Fowler, 2017b). In the blog post, Fowler wrote about sexism and sexual harassment within the organization, and about an aggressive and untrusting environment in the midst of organizational chaos (Fowler, 2017a). A large problem with Uber’s sexist environment, Fowler explained, was the HR department’s victim blaming as core to how the organization handled the cases. When Fowler came to HR with complaints of sexual harassment, HR told her that it was that manager’s “first time offense” and that his reputation and livelihood should not suffer because of her allegations as he was a “high performer” (Fowler, 2017a). Instead, Fowler’s livelihood and mental health had to suffer, as she was given the option of joining a team that she was less qualified for or staying on her current team and likely receiving a negative performance review by the manager that she reported (Fowler, 2017a). The HR employee explained that it would not be retaliation if Fowler received a negative review because she had been “given an option” (Fowler, 2017a). Even when Fowler found out that other women in the organization were sexually harassed by the same manager, the women said that HR had told them as well that it was that manager’s “first time offense” (Fowler, 2017a).

Fowler experienced further sexism later on after receiving a perfect performance score when she attempted to transfer teams. Her manager, his manager, and the director told her that her transfer was blocked because of undocumented performance problems that they had added to her performance score in secret after it had been published (Fowler, 2017a). At first they explained that it may have had to do with “things outside of work” or her “personal life,” both of which are not legally allowed to affect her workplace performance review (Fowler, 2017a). Then they explained that it was the opposite: that Fowler did not show enough career trajectory (Fowler, 2017a). Finally, Fowler wrote that she found out the real reason: teams were losing their women across the company, and her manager figured that keeping her on his team made him look good (Fowler, 2017a). When Fowler asked her director what was being done with the decreasing numbers of women in the organization, he responded that the women of Uber just needed “to step up and be better engineers” (Fowler, 2017a).

Last of the sexist incidents that Fowler reported was an email chain about leaving women off of the order for company jackets. The email explained that there were not enough women to justify placing the order for women’s jackets. Fowler replied that she was sure that Uber could find the money to cover jackets for the six women still left in the organization, as the organization was already buying jackets for over one hundred-twenty men. The director replied that if the women wanted equality they should realize that they were already getting it by not receiving the jackets: the bulk order of men’s jackets had received a discount, whereas the women’s jackets would cost more individually (Fowler, 2017a).

Last of the victim blaming incidents was with HR and subsequently with Fowler’s manager who threatened to fire her for reporting him to HR. Instead of investigating her claim of the jacket incident, HR asked Fowler if she noticed that she was the common theme in all of her complaints and if she had ever considered that she might be the problem (Fowler, 2017a). HR then said that they had no record of the incidents that Fowler was claiming (to which Fowler responded that she had email and chat records with HR that would prove that their statement a lie). HR also told Fowler that it was unprofessional to report things via email to HR (even though email is the most professional way to report things to HR) (Fowler, 2017a). HR also asked inappropriate questions such as if the women engineers at Uber were friends and talked a lot, how often they communicated, what they talked about, what email addresses they used to communicate, and which chat rooms they frequented (questions to which Fowler refused to comply with) (Fowler, 2017a). When Fowler pointed out how few women there were in her engineering unit, HR responded with a sexually and racially discriminating story about how sometimes people of certain genders and ethnic backgrounds are better suited for some jobs over others (Fowler, 2017a).

Fowler’s manager continued the victim blaming by threatening to fire her because she had reported him to HR (Fowler, 2017a). Fowler told him that this was illegal, and he responded that he knew more than her and that it was legal. When Fowler reported her manager’s threat, HR and the CTO admitted that the threat was illegal but did nothing about it because her manager was a “high performer” (Fowler, 2017a).

2.c. Level of Severity

The aftermath of Susan Fowler’s post was severe. Fowler’s post described how rampant sexism and victim blaming was ingrained into the organization and reinforces itself at the topmost levels. The social media response was massive. Fowler’s tweet that linked to her blog post received 23K retweets and 1.7K replies, many of which helped reinvigorate the #deleteUber campaign by using the hashtag again (Bhuiyan, 2017, Feb 20; Fowler, 2017b).

The severity was high enough that Uber’s CEO Travis Kalanick took action the same day. Kalanick tweeted a response by calling the allegations “abhorrent & against everything we believe in,” and ordered an investigation of his company by former Attorney General Eric Holder, the results of which would later be disclosed to the public (Kalanick, 2017a, Feb 19; Kalanick, 2017b, Feb 19; Swisher, 2017, Feb 20). Arianna Huffington, who is on Uber’s board, announced that she will conducting an ancillary independent investigation of her own with the help of Liane Hornsey, Uber’s head of HR (Huffington, 2017, Feb 19).

Investigative journalists and online magazines have jumped on Fowler’s story in continuing installments by covering Holder’s investigation and related occurrences at Uber. The Economist reported how Uber’s HR department failed to act on her sexual harassment complaint as part of a long list of Uber’s branding problems (The Economist, 2017). Recode reported that Uber’s SVP of engineering was fired after he did not disclose that he had left his former employment at Google because of a dispute over a sexual harassment allegation (Swisher, 2017, Feb 27). Fortune reported that Uber’s Vice President Ed Baker resigned after Fowler’s blog post when an Uber employee complained about his sexual behavior at the workplace (Morris, 2017). Recode reported Kalanick’s former disinclination to publish diversity stats and that HR’s sexism and victim blaming, as well as the stepping down of multiple HR executives, were a result of Uber’s wider culture of antagonism and discrimination that trickled down from its CEO, Travis Kalanick (Bhuiyan, 2017, Feb 21). Recode then underlined Kalanick’s poor leadership in its report of a recent video showing Kalanick yelling at a driver (Bhuiyan, 2017, Feb 21). The New York Times published a report of an “executive exodus as it faces questions of workplace culture,” listing the departure of seven top executives in charge of its engineering, self-driving, ridesharing, mapping, AI, product development, and communications departments (Isaac, 2017, Apr 12). The New York Times then wrote a piece highlighting Kalanick’s poor leadership in a variety of its current legal and privacy cases, mentioning Uber’s culture as a “machismo-fueled workplace where managers routinely overstepped verbally, physically and sometimes sexually with employees,” and that Kalanick’s reputation was not helped by the recent video that came out showing Kalanick yelling at a driver (Isaac, 2017, Apr 23). Further business articles spotlight Uber’s other legal issues and add fuel to a dropping brand equity.

Uber’s drop in market share is severe. From the beginning of 2017 until the first week in March, Uber’s market share in the U.S. has dropped from 80% to 74%, with many users opting for Lyft (The Economist, 2017).

2.d. Affected Parties

2.d.i. Uber’s leadership

Uber’s leadership is affected by this challenge as it is under press scrutiny and a legal investigation. The amount of negative articles dissecting Uber’s leadership, workplace culture, and legal issues would look like a smear campaign if so many Uber employees had not anonymously stepped forward to The New York Times and other reputable newspapers with incriminating documents (Isaac, 2017, Mar 3; Isaac, 2017, Apr 23). Uber CEO Travis Kalanick is under pressure from his board to find leadership help, and he is currently searching for a chief operating officer to bring discipline to Uber’s culture (Benner, 2017; The Economist, 2017). And the press is paying attention to top executives who leave or are kicked out of the organization during its ongoing legal investigation over Fowler’s claims (Bhuiyan, 2017, Feb 21; Isaac, 2017, Apr 12; Morris, 2017; Swisher & Bhuiyan, 2017, Mar 3).

2.d.ii. Uber’s employees

Further, Uber as a software company may suffer from lack of quality engineers. Software companies like Google, Apple, and Facebook are known for their happy work environments and high salaries; Uber’s workplace culture may convince experts to work for other companies (Newcomer, 2017, Feb 23). Venture backers and employees are appointed in Uber’s choice of insiders to investigate the issue. Arianna Huffington’s board seat could influence her impartiality; former U.S. attorney general Eric Holder has worked for Uber in the past (Marinova, 2017; Newcomer, 2017, Feb 23).

2.d.iii. Uber’s user base

Uber’s users are slightly affected by this challenge. Drivers of ridesharing apps mostly work part-time and may therefore use multiple ridesharing apps to work for competing companies (Meyer, 2016). Drivers may take riders from both apps depending on app traffic and their location. Prices for users remain similar: Uber monitors Lyft’s prices and business model and has the capital to keep its prices competitive; Lyft is gaining investors and is spending more to subsidize their rides (Isaac, 2017, Feb 23; The Economist, 2017). Riders of ridesharing apps also have few switching costs as they choose one app over the other (Arguelles, 2015; Bercovici, 2014). As Lyft now operates in 500 cities across the U.S., riders have greater consumer power to choose between ridesharing services (Arguelles, 2015; Lyft, 2017). Certain drivers may be more affected than others by Uber’s marketing challenge, however. The drivers who took loans from Uber in order to purchase a vehicle may feel stuck with Uber’s rider-base until they pay the loans back (Bhuiyan, 2017, Feb 3; Bhuiyan, 2017, Feb 21; Isaac, 2017, Apr 23).

2.d.iv. Uber’s investors

Venture backers are nervous about Uber’s sexual harassment allegations and two have publicly rebuked the company following Fowler’s claims (Somerville, 2017).

2.d.v. Uber’s competitors

Competitors were also affected by Uber’s marketing challenge. Uber’s troubles have translated into decreased brand equity and increased growth of its competitors as users switch ridesharing apps. After the first #deleteUber campaign, Lyft leveraged the opportunity to gain market share from dissatisfied Uber users and expanded to 100 new cities across the U.S. (BI Intelligence, 2017). TXN Solutions, which tracks debit and credit card spending, followed Lyft’s late January market share of 16.5% from before the first #deleteUber campaign until it gained 20.9% of the market, and then received another bump to 21.3% following Susan Fowler’s blog post in February (Weise & della Cava, 2017). Despite Lyft’s 4% market share of global ground transportation compared to Uber’s 52%, Lyft’s market share is greater within the U.S. and has increased dramatically during Uber’s marketing challenge toward 40% market share in multiple U.S. cities (Hagan, 2017; Steinmetz, 2017). In Portland, user spending on Uber decreased by 18% and user spending on Lyft increased by 16%. In San Francisco, user spending on Uber decreased by 8% and user spending on Lyft increased by 24%. In New York, user spending on Uber decreased by 5% and user spending on Lyft increased by 48%. In Washington DC, user spending on Uber decreased by 4% and user spending on Lyft increased by 40%. In Detroit, user spending on Uber decreased by 1% and user spending on Lyft increased by 57%. A similar pattern continues all around the U.S (Weise & della Cava, 2017). Further, Lyft benefits with partnerships as the runner up to ride hailing market share. Delta recently launched an exclusive partnership with Lyft where Delta will offer SkyMiles members extra opportunities to earn miles by riding with Lyft (Breaking Travel News, 2017). While Uber is large enough that it may weather this branding storm, it may not make it out if it continues on its deleterious path of poor leadership behavior and sexual discrimination in its workplace culture.

3. The Strategic Marketing Communication Solution

3.a The Solution

It is easier for larger companies to bounce back from negative press. Strong brands have improved perceptions of product performance and greater customer loyalty, among other advantages (Beardwood, 2016; Gvili, 2017, Apr 26). Despite being subject to a greater spotlight for misbehavior, the strength of a brand can help it recover quickly from negative PR if the incident is managed well (Gvili, 2017, Apr 26). Uber’s fast growth and leadership of the ground transportation market gives it leverage to take back their market after properly responding to its present concerns.

Uber’s CEO Travis Kalanick’s steps to manage his company’s PR crisis is an attempt to appeal to current and potential app users, headquarters employees, investors, strategic partners, board members, and regulators. Kalanick responded to Fowler’s contrarian twitter post the same day by expressing his disapproval and willingness to find a solution by conducting an investigation into Fowler’s allegations (Bhuiyan, 2017, Feb 20; Kalanick, 2017a, Feb 19; Kalanick, 2017b, Feb 19). Uber CEO Travis Kalanick hired law firm Perkins Coie LLP to investigate Fowler’s specific claims, as well as hired former US Attorney General Eric Holder and his firm, Covington & Burling LLP, to lead an internal investigation and conduct employee interviews (Bensinger, 2017, May 30; Bhuiyan, 2017, Feb 20; Isaac, 2017, Feb 19; Newcomer, 2017, June 6; Swisher, 2017, Feb 20). At the same time, Kalanick is conducting his own review. Human resources chief Liane Hornsey and and board director Arianna Huffington are holding “independent” listening sessions for employees to air grievances (Bensinger, 2017, May 30; Bhuiyan, 2017, Feb 20; Huffington, 2017, Feb 19; Isaac, 2017, Feb 19; Newcomer, 2017, June 6; Swisher, 2017, Feb 20).

After about a month of investigations into 215 HR claims, Uber let more than 20 employees go, including senior executives; ordered 31 employees to attend counseling or training programs; and sent written warnings to another 7 employees (Ghoshal, 2017; Newcomer, 2017, June 6). Fifty-seven of the 215 HR claims are still being probed, and more people may yet be fired (Ghoshal, 2017). Among an executive exodus during the investigation as they faced questions of workplace culture, Uber fired its SVP of engineering, Amit Singhal, because he had not disclosed that he was the subject of a sexual harassment investigation at his previous workplace (Isaac, 2017, Apr 12; Newcomer, 2017, June 6; Swisher, 2017, Feb 27). Fowler’s allegations were also believed to have pushed president Jeff Jones to quit after joining six months earlier, citing differences in the approach to leadership at Uber (Ghoshal, 2017). Fowler’s allegations were also believed to have pushed vice president Ed Baker to resign after a story was published about his cohorting with his female subordinates (Morris, 2017). Emil Michael, Uber’s senior vice president of business, left after Kalanick’s ex girlfriend reported that he had silenced her from speaking to the press about an incident in 2014 when Kalanick brought his top executives to get serviced by escorts at a karaoke bar in South Korea (Peck, 2017). Uber’s head of communications, Rachel Whetstone, left after reported tensions with Travis Kalanick (Swisher, 2017). Kalanick’s memo rewarded her assertiveness in retrospect, saying that she had been “ahead of the game” when it came to many of the changes they needed to make, “from promoting cross-functional teamwork to improving diversity and inclusion” (Swisher, 2017).

Uber CEO Travis Kalanick, who felt that racial or gender stats were not useful metrics for company diversity, had historically resisted having the HR department collect or distribute diversity data (Bhuiyan, 2017, Feb 21). After Fowler’s allegations, Kalanick promised in a memo that Uber will now be transparent about diversity information (Bhuiyan, 2017, Feb 21). On March 28, a month after Fowler’s allegations, Uber’s HR chief published its first diversity report onto Uber Newsroom (Hornsey, 2017).

Uber CEO Travis Kalanick requested the help of his board as well as hired a search firm to help him look for a COO that would bring structure to the organization and keep Kalanick in check (Benner, 2017; Bensinger, Morris, & Georgia, 2017; Kalanick, 2017, Mar 7; Newcomer, 2017, June 6; The Economist, 2017). So far Kalanick has approached current and former executives from companies including Disney, Wal-Mart, and CVS, as well as people with experience in fields with complicated labor and operational structures, such as airlines (Bensinger et al., 2017). The fact that he is searching for leadership help from someone with experience from a large corporate culture is a good sign as Uber is no longer a small startup (Bensinger et al., 2017). Kalanick has also interviewed the CEO and COO from Facebook, and the president of Hewlett-Packard for advice on the search (Newcomer, 2017, Mar 21).

Uber CEO Travis Kalanick is more active on social media, attempting to show a friendly face (Bhuiyan, 2017, May 21). Uber continues to create and sponsor positive press on its innovativeness and social responsibility, but is now including press on its diversity (Grabie, 2017, Apr 30; Myhrvold, 2017; Salzberg, 2017, May 16; Uber Engineering, 2017). Uber CEO Travis Kalanick has recently been sharing his company’s positive press on his social feeds (Bhuiyan, 2017, May 21). The continual updates on the company’s values may enable its brand identity to be associated with these images in consumers minds over time.

Uber CEO Travis Kalanick spoke to his company about changing the organizational culture (Uber Engineering, 2017). Uber CEO Travis Kalanick’s efforts at requesting leadership help and at bringing order and cultural change to his organization may be seen by target audiences as a sobered leader who is serious about change.

Uber CEO Travis Kalanick is hiring women to top executive positions. He recently hired a former Apple music executive for its new chief brand officer, and a Harvard Business School professor for new senior vice president for leadership and strategy (Ghoshal, 2017). They are charged with fixing Uber’s reputation as an ethically challenged corporation. Uber has grown so quickly in a short time - from 500 employees in 2014 to over 12,000 employees in 2017 - that they had not had time to craft what their brand story is (Bhuiyan, 2017, Feb 21; Ghoshal, 2017; Newcomer, 2017, June 6). The business school professor now in charge of Uber’s leadership and strategy had written a book in 2012 titled, “Uncommon Service: How to Win By Putting Customers at the Core of Your Business” (Ghoshal, 2017). While still lacking a president and COO, these two hires may help repair Uber’s image from claims of sexism and poor treatment of drivers, as well as from conflicts with governments across the world who pose limitations on Uber’s drivers. Further, both of these senior executive hires are women, one of whom is black, which may help Uber’s image from claims of sexual and racial discrimination. Another female hire to a top executive position post Fowler allegations is Raquel Urtasun, an associate professor and lead researcher in the field machine perception and artificial intelligence at the University of Toronto, to lead Uber’s new branch of their Advanced Technologies Group self-driving unit in Toronto (Kalanick, 2017, May 8).

The Uber board will discuss CEO Travis Kalanick’s possible leave of absence, as well as vote on how to go forward following a report of an investigation into Uber’s workplace issues (Bensinger, 2017, June 11). Kalanick supposedly owns about 10% of Uber’s stock after shares have had a 10/1 and a 4/1 split in 2012. Even though the company is still private, it may be technically possible for the board to kick him out of his leadership role at Uber (Haslett, 2016).

3.b Alternative Solutions

Uber’s solutions are mostly appropriate and Uber did not feel that they had to apologize for any of them. Uber did not publicly consider alternate solutions to the ones that they carried out.

4. Application

Uber applied their strategic solution by specific marketing communication activities, on different channels, targeting different publics, for multiple objectives. Marketing communication activities directly relevant to its crisis from Susan Fowler’s post included PR, personal selling, and interactive marketing. Channels used include news media sites, company memos, company blogs, in-person communication, and social media. Targeted publics include current and potential users, employees, partners, and investors; Uber’s board of directors; and government regulators. Objectives include maintaining and increasing Uber’s market power; showing that Uber is a great place to work; showing that Uber is a great company to partner with; showing that Uber is a great company to invest in; showing that Uber’s CEO has leadership potential; limiting potential regulations that may arise from Fowler’s allegations; and enhancing Uber’s brand equity.

After posting on social media about starting an investigation, Kalanick and those conducting the investigations kept mum about its process. However, Uber could have leaked certain information regarding their investigation process to the news media if they felt that it would enhance their brand equity. Specifically, Uber may have leaked which independent law firms and officials were conducting its investigations, as well as the fact that they fired over twenty employees as a result of one of the investigations. Uber’s PR may have been targeted toward its current and potential partners and investors, as well as toward government regulators. Uber wants to maintain its current partnerships as well as continue to increase its app efficiency through potential new partnerships. Current and potential partners decide to work with Uber through business intelligence, personal selling, and PR. Second, Uber does not want its current investors to pressure it to go public too early before it can enhance its brand equity from its current crisis and increase its future stock price at their IPO. PR supplies theoretically impartial information about up-and-coming startups for investors to make their decisions. Last, government regulations would restrict Uber’s growth. News media press about how Uber is tackling Susan Fowler’s allegations of sexual harassment and a culture of sexism may delay government regulations while government officials evaluate Uber’s response.

Uber applied personal selling activities to its solution through in-person communication, company memos, and company blogs. Uber CEO Travis Kalanick spoke in-person to his company about his intention to change Uber’s organizational values so that they incorporate justice and candor; and how he could lead by example by encouraging criticism and receiving it gracefully (Uber Engineering, 2017). He conceded that his aggressive behavior may have been emulated by top executives and filtered down to the rest of the organization (Uber Engineering, 2017). Kalanick also sent company-wide memos where he promised better leadership and wrote updates on Uber’s process of organizational change (Bhuiyan, 2017, Feb 21; Swisher, 2017). Personal selling techniques that Uber used in response to their crisis included publishing its own content on Uber Newsroom. Content includes publicizing Uber’s new executive hires, all of whom happen to be female; relaying its decision to publish its diversity data; and finally its first post detailing its diversity statistics (Hornsey, 2017; Kalanick, 2017, May 8; Uber Press Team, 2017; Uber Team, 2017, Mar 28; Uber Team, 2017, Jun 5). Targeted publics for Uber’s personal selling approach include its employees and board of directors. Objectives for targeting employees are twofold. Uber wants to prevent unwanted press leaks from disloyal employees, and also wants to keep its valuable current and potential engineers and experts from looking to work at other more attractive companies that they feel would treat them better (Newcomer, 2017, Feb 23). Objectives for targeting its board of directors may be that Uber’s CEO Travis Kalanick wants to make sure that it does not fire him. Uber’s board is discussing his possible leave of absence and plans to vote on their own suggestions following investigation reports (Bensinger, 2017, June 11).

Uber applied interactive marketing activities to its solution through social media platforms. Kalanick is using his Twitter, Facebook, and Instagram to immediately respond to Fowler’s allegations, show a friendly face, and share updates on his process of organizational change (Bhuiyan, 2017, May 21; Huffington, 2017, Jun 5; Kalanick, 2017a, Feb 19; Kalanick, 2017b, Feb 19; Kalanick, 2017, May 9; Kalanick, 2017, May 13; Kalanick, 2017, May 16). Targeted publics for Uber’s interactive marketing activities include its user base, current and potential employees, and current and potential partners. Much of the replies on Kalanick’s social media posts are from Uber’s riders and drivers. Further, Uber’s target user market includes people who own smartphones aged 25-34 (Ovugo, 2017). Social media is accessed 70% of the time from the smartphone, and the social channels that Kalanick is posting on are composed of a greater percentage of people in the 25-34 age demographic than other age demographics (Sterling, 2016). Also, Uber is using a similar medium to do damage control (Twitter) as was used by Susan Fowler in sharing her allegations of sexual harassment and company-wide sexism in order to target the same audience (Fowler, 2017b). Current employees may follow Kalanick and Uber’s social media pages because they value the company that they work for and want to share updates on its successes. By providing them with sharable content, Kalanick enables those who may still be loyal to the company to spread his messages to a wider audience and promote the company for him; word-of-mouth is more trusted than advertising. Shared content and word-of-mouth may target potential employees who see that those they follow are proud of their company. Current partners may follow Kalanick and Uber on social media channels in order to keep tabs on the company and share positive press. Potential partners may want to make sure that Uber’s leadership posts responsibly before associating themselves with the company.

An overall objective of Uber’s marketing activities, channels, and targets is to enhance its brand equity. All of its target markets decide on behavior relevant to the company by the value that they ascribe to Uber.

5. Integration and Fit

5.a Suitability of the Chosen Solution and its Application

The chosen solution and its application to the factors in Uber’s environment are suitable to certain target audiences and not suitable to others. Uber’s interactive marketing response on social media was suitable for its app users because the social platforms used target the correct age and behavior of its user base. Uber’s target user market includes people who own smartphones aged 25-34 (Ovugo, 2017). Social media is accessed 70% of the time from the smartphone, and the social channels that Kalanick is posting on (i.e. Twitter, Facebook, Instagram) are composed of a greater percentage of people in the 25-34 age demographic compared with other age demographics (Sterling, 2016). Kalanick is publicizing positive press to the appropriate social platforms for his target user market. Uber’s interactive marketing response on social media was also suitable because Uber is using a similar medium to do damage control (Twitter) as was used by Susan Fowler so as to target the same audience (Fowler, 2017b).

Uber’s personal selling and PR responses may be slightly suitable for its employees. Suitable solutions included Uber’s follow up on its diversity reports, its actions regarding investigation results, and the company’s new executive hires. Uber’s first public report of its diversity statistics was published a month after Fowler’s post (Uber Team, 2017, Mar 28). Uber fired over 20 employees, including top executives, following investigation results from Covington & Burling LLP’s employee interviews (Newcomer, 2017, Jun 6). Uber’s recent hires to top executive positions have been women (Ghoshal, 2017; Kalanick, 2017, May 8; Uber Team, 2017, Jun 5).

Non-suitable solutions, however, included investigation bias, Kalanick’s delay in finding a chief operating officer, and inactivity regarding Uber’s formal communications systems. Few believe that the “independent investigation” led by Uber’s HR chief Liane Hornsey and Uber’s board director Arianna Huffington will be unbiased. Even though the current HR chief was brought on in January and may have had little to do with the HR misconduct as part of Susan Fowler’s claims, Arianna Huffington’s board seat could influence her impartiality (Bensinger et al., 2017; Marinova, 2017; Newcomer, 2017, Feb 23). Furthermore, one of Arianna Huffington’s listening sessions was led by technology chief Thuan Pham. The problem with this is that he oversaw the engineering operation where Susan Fowler worked and Fowler claimed that he was aware of her complaints to HR (Bensinger, 2017, May 30). Similar claims of partiality are mentioned for former U.S. attorney general Eric Holder, who is conducting employee interviews with his firm Covington & Burling LLP, as has been working for Uber since June to dissuade regulators from requiring fingerprint background checks for Uber’s drivers (Marinova, 2017; Newcomer, 2017, Feb 23; Somerville, 2017). Second, in his search for a COO, Kalanick is looking for “a peer who can partner with me,” and had found such a peer in former second-in-command and president of ridesharing, Jeff Jones. Jones left in March after six months, however, because he found Kalanick unwilling to be challenged (Bensinger et al., 2017). Jones had been listening to user complaints including drivers’ requests to add a tipping option, and he had been attempting to initiate a more cautious approach to Uber’s auto leasing and safety programs. However, Kalanick resisted his proposals (Newcomer, 2017, Mar 21). Uber is notorious for its toxic “bro” culture, created by its CEO, Travis Kalanick (Lyons, 2017). The New York Times likens bro cultures to corporate frat houses. Employees are chosen like pledges based on “culture fit”; women are hired but rarely promoted, and often complain of being harassed; minorities and older workers are excluded (Lyons, 2017). The New York Times explains that bro culture values fast growth over long-term success. This atmosphere rewards ignoring regulations in doing whatever it takes to win (Lyons, 2017). Jones left with a biting remark: “The beliefs and approach to leadership that have guided my career are inconsistent with what I saw and experienced at Uber” (Newcomer, 2017, Mar 21). A senior lecturer on entrepreneurship at MIT said that “Startups that lose people, that happens. But startups that lose people in such a bitter way that they don’t believe in the company’s existence? That’s toxic” (Newcomer, 2017, Mar 21). In attempting to initiate some of his proposals, Kalanick loyalists who Jones was in charge of were unwilling to take direction from the new leader (Newcomer, 2017, Mar 21). In Kalanick’s search to look for “a peer,” potential COO’s may be worried that Uber’s CEO is not willing to change. This is underscored by Kalanick’s method at requesting advice on the search. While seeking input from Facebook CEO Mark Zuckerberg, Kalanick was photographed with Zuckerberg at a “Breakfast at Tiffany’s”-themed ping-pong party called Babes and Balls (Newcomer, 2017, Mar 21). Kalanick’s party behavior is consistent with his previous behavior in 2013 when he advised employees on sex and party rules for a company celebration, and in 2014 when he called his company “Boober” because it helped him get dates (Rapkin, 2014; Swisher & Bhuiyan, 2017, Jun 8). However, Kalanick’s party method at researching new leadership may be seen as inconsistent with his twitter comments that Uber’s culture of sexism is “abhorrent & against everything we believe in” (Kalanick, 2017a, Feb 19). Either Travis Kalanick must dispel with the notion that he must find a second in-command by their abilities to be “a peer,” or the CEO must proactively invest in leadership and emotional intelligence coaching so that he will be open to criticism. Third, little if any activity has been done to change Uber’s formal communication systems. While Uber has hired new female top executives to help normalize the visibility of women in roles of leadership, no alternate communications systems have been set in place to equalize the voices of its female employees when taken over by managers who fail to attribute ideas and projects to upper management and in performance reviews (Fowler, 2017a; Glassdoor, 2017).

Uber’s PR responses may be suitable for its partners. Examples of former partners who continue their partnerships with Uber, as well as examples of new Uber partners, include Google, Transit, and Volvo. Uber previously relied on external gps apps, including Google Maps and Waze on Android, offering a “Navigate” button that would send users outside the Uber app to the third party navigation app of their choice. This meant no control over the in-app navigation experience. Uber Maps now includes navigation mapping inside the Uber app, giving Uber more control over the navigation experience, and streamlining service for users (Etherington, 2017, Mar 15). Uber recently partnered with Transit, a global public transportation app for major U.S. and international cities (Salzberg, 2017, May 16). With this partnership, users do not have to switch between apps when riding an Uber to get to public transit: transit data appears in the Uber app when arriving within one block of a public transportation transfer point (Salzberg, 2017, May 16). Uber also recently partnered with Volvo, a brand known for its safety and recently for its sophistication, in its race to grab part of the autonomous driving vehicle market (Zhang, 2017).

Uber’s PR responses may be slightly suitable for its current and potential investors. While most investors have stayed quiet publicly, they are pressuring Kalanick to fulfill fiduciary responsibility and take his company public so that they can cash out (Ryssdal & Wood, 2017).

Uber’s personal selling responses may be suitable for its board of directors. Uber’s board has relatively little power against Travis Kalanick, accounting for the fact that two of his friends are on the board, with the shares of all three of them controlling the majority of the voting rights (Hook, 2017). Kalanick’s two friends who are on the board are Uber co-founder Garret Camp and senior vice-president Ryan Graves. Further, Kalanick made the rest of the board members wealthy (Hook, 2017). The board of directors’ report that they may give Uber CEO Kalanick a leave of absence may have been a suggestion of Kalanick himself following the death of his mother in a recent boating accident (Bensinger, 2017, Jun 11; Ryssdal & Wood, 2017).

Uber’s PR responses may be suitable for regulators, as no new regulations have come up against Uber in the U.S. since Fowler’s post and the beginning of Uber’s response. In fact, Uber is allowed to re-open in Austin, along with its competitor, Lyft (Uber Austin Team, 2017).

5.b Extent of Integration

Uber’s various marketing communication activities and applications were not integrated well into the organization. Despite an immediate investigation into Fowler’s allegations, bro culture remains systemic (Lyons, 2017). Following an investigation by Eric Holder and is law firm, Covington & Burling LLP, 31 employees reported for sexist behavior were not fired, but required to attend counseling or training programs; and 7 employees reported for sexist behavior were given written warnings only (Ghoshal, 2017). Not only were so few employees fired from a company with systemic cultural sexism - 20 of 12,000 employees - but 38 extra employees who were perpetuating this behavior were allowed to remain as long as they attended trainings or received written warnings. Further, the training punishments were administered on a case-by-case basis: no actions following investigation findings called for a company-wide training program.

Further, despite recent executive hires, including women to top executive positions, Uber has also been firing employees and continues to have a leadership gap. Uber is finding it difficult to hire a chief operating officer, and has not been able to find a chief finance officer for the past two years (Hook, 2017).

Additional non-integration of Uber’s marketing communication activities and applications include no action on HR function or their performance review system. HR told Susan Fowler that no other women in the organization had made similar sexual harassment complaints from a particular high performing manager who had harassed all of them; when Fowler had talked to the women previously and knew that they had made such complaints (Fowler, 2017a). HR also victim blamed Fowler for coming to them with so many complaints about sexism, and told her that the common denominator seemed to be her - and also that she had no evidence (Fowler, 2017a). Fowler showed HR a paper trail with her managers and with HR representatives proving that she had not been the instigator and that there was documentation; HR replied that sending documentation by email was unprofessional and asked which women in the organization she was friends with and which platforms they communicated on (Fowler, 2017a). Email reports are among the most professional ways to report things to HR, however, if not the most professional.

Fowler also reported Uber’s performance review process, explaining how Uber managers gave her perfect performance scores at first; but that after she finished a project and attempted to switch out of her department to another team whose manager wanted to work with her, her manager retroactively changed her score without her knowledge so that she had to remain on his team to make his diversity numbers look good (Fowler, 2017a). While questioning the retroactive evaluation, Fowler was given vague feedback and judged on her personal life (Fowler, 2017a). Uber’s CEO has not looked into its performance review process: the extent of integration of Kalanick’s solutions to turn around Uber’s culture slim.

Another issue with the integration of Kalanick’s solutions is that his solutions are external to a large part of the problem: himself. Uber’s culture problem trickles from the top: Kalanick perpetuates a winner-take-all and bro culture. Not only does Kalanick lead by example in his approach to punishing and ignoring criticism from his subordinates, but those who have a similar temperament are hired to supervisory positions and promoted within the company (Lyons, 2017).

Last, despite the suitability of interactive marketing via social media, most user replies to Kalanick’s tweets are negative and continue to talk about boycotting his company. Despite the suitability of the social media and Twitter platform, users do not believe that Kalanick’s actions are genuine or enough.

6. Results

6.a Success of Uber’s Marketing Communication in Coping with the Marketing Challenge

Uber is not yet public and has not disclosed its data on market share and profitability after the Fowler incident: it is difficult to determine short-term effects of its marketing communication strategies in coping with their marketing challenge. However, its $708 million in losses in the first quarter of 2017 are reduced from its $991 million losses in the fourth quarter of 2016 (Patnaik, 2017). Further its $3.4 billion reported revenues in the first quarter of 2017 are up from its $2.8 billion revenues in the fourth quarter of 2016 (Patnaik, 2017). Despite Uber’s marketing problem, their losses reduced and their revenues increased since the last quarter. Fewer losses and increased revenue may have to do with their market power and threshold of users on the road.

Uber’s efforts in firing top executives during investigation results, searching for new able leadership, and talk about turning around its organizational culture, if continued, may accumulate as positive PR and enhance its brand equity for the long-term. The fact that Uber’s CEO prioritized his social media channels for getting information across to Uber’s target user audience was helpful in spreading his message efficiently and rapidly. The enhanced brand equity from consumers, if not necessarily from employees or investors, may induce regulators to be less inclined to create restrictions against Uber’s business model. Regulator restrictions may come in the form of permit licensing, car licensing, fare regulations, behavior conformity, and accessibility requirements, all examples of regulations directed at the taxi industry (Frizell, 2014; Mitchell & Farren, 2015; Rayle et al., 2014). Further regulations may include location restrictions. Cities like Portland and Austin view Uber as a threat to their government licensing regimes and mandatory quality standards, as rideshare apps are potentially undermining rider protections (Ben-Shahar, 2017). However, Uber’s market domination of the ground transportation industry makes it clear that they prefer the non-traditional platform-based business model. Drivers may work when is convenient for them and despite cheaper rides, keep more money than taxi drivers; legal interventions into Uber’s business model would lead to higher fares and let fewer drivers find work (Ben-Shahar, 2017). In addition to its increasing market share, Uber’s image as a force for good may convince lawmakers to ease up on regulation. The rideshare platform’s competing model of regulation puts reputation and market incentives as its top measurements for user satisfaction (Ben-Shahar, 2017). With regard to its reputation, building a positive brand identity not only includes listening to and taking care of the concerns of its platform user base, but involves ensuring an envious work environment that takes care of its employees. Uber’s efforts at targeting its sexual harassment, sexism, and aggressive organizational culture at its company headquarters may accumulate, if addressed completely and continually over the course of its lifespan, toward positive long-term brand equity results that may deter regulators and help entice users to stay with the app.

6.b The Most Effective Marketing Communication Activity or Channel

An argument may be made that the most effective marketing communication activities are losing profit to cut prices and publicizing its product feature updates so as to maintain its market power. Despite fundraising and securing $11 billion in venture capital in its early years, Uber is burning cash in order to keep rides 60-70% below taxi rates and remain a leader in ride hailing market share (Sherman, 2017). Uber lost $2.8 billion last year on $6.5 billion revenue because it keep rates low and gives subsidies including sign-up bonuses and cash rewards for certain driving targets as incentives for its drivers to remain with the company (Bensinger et al., 2017). Many users find value in Uber as an alternative to using their own cars because its rides are less costly than taxis, as well as less costly than using their own car where they would have to pay for gas and parking fees and have to look for parking spots (Farrar, 2017; Sherman, 2017). Despite Lyft’s boost in downloads after over 200,000 users uninstalled Uber from the #deleteUber campaign and Fowler scandal, the boost was only temporary (Bhuiyan, 2017, Mar 7). As rideshare apps have few switching costs, drivers may work for multiple rideshare apps at the same time and will take the first ride requests they receive; and riders will choose to use the app with more active drivers in order to decrease time until pickup (Bhuiyan, 2017, Mar 7). Further, Uber’s market share is so much larger than Lyft’s and its typical account addition per week is estimated at around 200,000 anyway (Bhuiyan, 2017, Mar 7). Coming from a larger market share, despite its dip, gives the rideshare giant an advantage in being able to offer a greater supply of drivers for each rider, and vice versa.

Uber’s engagement in relationship marketing by listening to user feedback has enabled them to root out priority updates in service. Uber updated its carpooling service to improve efficiency in routes as well as find safer pick up and drop off points (Perez, 2017, May 22). Uber has strategically partnered with other transit services and combined third-party transit api’s in order to offer a more controlled in-app navigation experience and an in-app timetable of connecting public transportation options (Etherington, 2017, Mar 15; Salzberg, 2017, May 16). In cutting its profits through lower pricing, as well as continuing improvements in app efficiency, Uber buys time in the short-term to cope with its public relations scandals. However, without direct attention to their cultural problem, potential partners may not want to attach themselves to Uber’s brand and may look toward its competitors, hurting Uber’s ability to continue cutting its profits.

In cutting prices to maintain its market power, Uber is increasingly displacing taxis (Haga, 2017; Horn, 2016; Richter, 2017). And, while Lyft and other rideshare competitors are climbing the market, the rideshare platform is more valuable the larger it is. Riders prefer a large driver network and drivers prefer a network with many riders. Uber started out as the first rideshare option and built its user base at a profound rate (Solomon, 2015). It is the rideshare monopoly at the moment, ensuring enough drivers per rider and vice versa, even in remote locations (Ben-Shahar, 2017). This advantage makes it increasingly hard for negative press to make a significant dent in its market share of public ground transportation, even if Uber takes away its most desirous feature - its low fares (such as through surge pricing or by regular fare increase) (Ben-Shahar, 2017).

A chunk of Uber’s user base did delete the app at the same time as its competitor Lyft experienced a 40% increase in app installations and more than 60% increase in app activations (by inputting credit card details) (BI Intelligence, 2017; Steinmetz, 2017). The Economist reports that from the beginning of 2017 until the first week in March, Uber’s market share in the U.S. has dropped from 80% to 74%, with many users opting for Lyft (The Economist, 2017). But the numbers may be returning to their original values. Uber claims that its first-quarter revenue in 2017 rose 18% to $3.4 billion from the fourth-quarter of 2016 (Patnaik, 2017). Uber also claims that its first-quarter loss in 2017 of $708 million narrowed from its loss of $991 million in the fourth quarter of 2016 (Patnaik, 2017). Perhaps it may be unreasonable to rely on Uber’s claims without the transparency of a publicly traded company. But its claimed trajectory toward profitability - despite its recent barrage of marketing challenges, including Susan Fowler’s blog post alleging sexual harassment and a company culture of sexism - may point toward an appropriate marketing communication response or else a market power over the rideshare and ground transportation industries with a business model that is too entrenched and enticing for a chunk of political and womens rights activists to cut a dent in over the long-term.

However, economists who study the ride hailing industry agree that it is estimated to be a $40 billion market - meaning that it may have room for at least two successful players if not multiple smaller ones (Somerville, 2016). Traditional companies dominate markets through high infrastructure costs, a large specialized workforce, and high exit costs; rideshare companies have low entrance and exit costs and rely on unskilled labor, easily sliding past ground transportation market leaders. Economists explain that unlike a social networking site, ride platforms do not require that one’s friends by on it for the full experience (Somerville, 2016). From 2015 to 2016, Uber’s market share increased by twelve percent: from 40% to 52% of total ground transportation transactions (Hagan, 2017). In the same year, Lyft tripled its driver base and doubled its market share from 2% to 4% (Somerville, 2016; Hagan, 2017). Further, their wait time reduced to three minutes by 2016, on par with Uber (Somerville, 2016). At three minutes or less, Lyft attests that a passenger almost always completes the ride. Having reached the amount of scale needed to get to three minutes means that if a competitor has more scale, it may not matter (Somerville, 2016). The increase in total U.S. ground transportation market share of rideshare competitors Uber and Lyft may point to an uncaptured market coverage of the potential rideshare market. Only 6% of smartphone users in the U.S. hail a ride through Uber and Lyft (The Economist, 2017). In capturing more of the potential rideshare market, multiple rideshare giants, rather than just Uber, may be able to successfully dominate the industry. For this reason, despite being the market leader, Uber is taking its image problem seriously and directly addressing Fowler’s allegations and working to better its leadership and bring a change in its workplace culture.

7. Critical Thinking

7.a Rebuild the Values of the HR Department

Solutions include addressing Uber’s HR problem, performance review process, formal communication systems, investigation results, and organizational culture. Regarding HR, Uber could change the primary function of HR from recruitment to maintenance. Kalanick had felt that HR’s main function was to recruit talent and efficiently let go of employees when needed (Bhuiyan, 2017, Feb 21). From 2014 until the first half of 2016 Uber’s employees surged from 500 to 16,000, with HR personnel climbing from 1 to 20 representatives: a disproportionate number of HR representatives per employee concerns (Bhuiyan, 2017, Feb 21). The Harvard Business Review explains that focusing on a single element of the HR value proposition, which is common in startup organizations, can perpetuate a crisis. If inappropriate managerial behaviors are tolerated while HR focuses on large-scale recruitment, the company may view these behaviors as accepted. But if HR is held accountable to the full range of its duties early on in a company’s beginnings, it may be seen as integral to organizational growth and value. High-profile investigations may never be required “because a word from HR will be enough to nip things in the bud” (Boudreau, 2017).

HR personnel must be trained anew. The training must enable them to deal with interpersonal relations within the headquarters so that they may consider harassment and discrimination complaints as unhealthy for the vitality of Uber’s culture, performance output, employee turnover, and PR. Kalanick must learn that keeping a discriminating or harassing manager around because of his performance scores is not the best option for the long-term health of the company.

Kalanick must also give HR a larger voice at top meetings and accept their criticism with humility so that HR managers, as well as HR employees in its lower ranks, will feel comfortable in bringing up sensitive issues.

If Kalanick did not do this already, he should fire HR representatives that victim blamed employees who reported sexual harassment or sexism. HR representatives may have been ordered to retain high performing sexual harassers as part of the company’s focus on recruitment and fast performance; but the HR representative who told Fowler that her continual reports of sexism meant that she may be part of the problem would have been supplementary to Uber’s focus on recruitment.

Kalanick should also hire more HR employees to deal with the amount of complaints. As Uber increases the number of its employees, their needs were falling to the wayside because of an increasingly dissimilar proportion of HR personnel (Bhuiyan, 2017, Feb 21).

7.b Change the Performance Review System

The Harvard Business Review finds that the climate for engineers is tougher for women than it is for men. It cites a report by the Center for WorkLife Law in conjunction with the Society for Women Engineers which found that female engineers have to constantly prove themselves - a phenomenon termed a “prove-it-again” bias where 61% of women of all races as versus 35% of white men reported having to prove themselves repeatedly for the same level of recognition from colleagues (Malthaup & Williams, 2017; Williams, Li, Rincon, & Finn, 2016). Proving themselves included looking more professional and demonstrating technical proficiency at all times in order to receive the same level of respect as given to an average male engineer (Malthaup & Williams, 2017; Williams et al., 2016).

Further, the Harvard Business Review found that organizations tend to have a “tightrope bias” where a narrower range of behavior is accepted from women than from men (Malthaup & Williams, 2017). Women are less allowed to behave assertively or show anger without pushback from colleagues and managers (Malthaup & Williams, 2017).

Because of these biases, men and women tend to be evaluated differently in organizations. Men tend to be judged on their potential and women on their performance (Malthaup & Williams, 2017). Susan Fowler was told that “performance problems aren’t always … about work” and that her personal life affected her performance problems (Fowler, 2017). She received vague comments about “not being technical enough” and then the reviewer’s story changed to her not having an “upward career trajectory” (Fowler, 2017). But Fowler pointed out that she had published a best-selling book, spoken at tech conferences, and done literally everything relevant to having an “upward career trajectory” (Fowler, 2017). She was having to defend a classic case of “prove-it-again” bias (Malthaup & Williams, 2017). Fortune magazine conducted a research that showed that women are more likely to be criticized for personality traits than men are, more likely to be labeled “difficult” for behavior seen as acceptable in men, and less likely to receive specific skills-based feedback that all employees require for job growth (Snyder, 2014).

The Harvard Business Review states that an entrepreneurial and performance-driven culture, such as that of a startup like Uber, is not a substitute for an ethical and people-friendly culture. One cannot exist without the other. Beyond risk mitigation, diversity and inclusion are a strategic approach for higher-performing organizations as they support organizational culture and innovation (Boudreau, 2017).

The Harvard Business Review suggests creating evidence-based tweaks to business systems that are practical and easily implemented, or “bias interrupters” (Malthaup & Williams, 2017). Uber could require that performance reviews appraise skills and personality separately. For example, instead of managers telling Fowler that she is “not being technical enough” after her performance review was lowered ex post facto without her knowledge, the Harvard Business Review recommends that managers be directed to give specific, constructive critiques.

A longitudinal Catalyst study found that men tend to be judged on their potential and women on their performance (Catalyst, 2011).The Harvard Business Review further suggests that Uber could require that performance reviewers evaluate potential and performance separately (Malthaup & Williams, 2017).

7.c Create New Formal Communications Systems

The New York Times, too, spoke of a “tightrope bias,” where women who speak in professional settings walk on a tightrope (Sandberg & Grant, 2015). Women are interrupted by men when pitching their ideas. Not only this, but women’s ideas are attributed to the men who interrupted them and ran with their idea. Women are therefore quiet at work which deprives organizations of valuable ideas. This sentiment was echoed in Uber’s employee reviews on Glassdoor (see above) (Glassdoor, 2017).

The New York Times suggests a double-blind innovation procedure. Employees would submit suggestions to workplace problems anonymously, feedback would be given to all participants, and the best plans would be implemented and credited (Sandberg & Grant, 2015).

7.d Better Address Investigation Results

Uber’s actions did not seem to mirror the investigation results or the culture of sexism pervading the company. Sexism is a systemic problem at Uber but only twenty employees were fired. More problematic managers could be fired.

Further, Uber could hire and promote a proportional number of women to supervisory positions as compared to men in those roles or at similar levels in the hierarchy. As part of its solution to the tightrope bias at high tech companies, The New York Times suggested increasing the number of women in leadership roles. As more women enter supervisory and executive positions, people become more accustomed to women contributing and leading to workplace proficiency and value (Sandberg & Grant, 2015).

7.e Rebuild Uber’s Organizational Culture

In re-building its organizational culture, Uber could put resources into hiring the services of an organizational behavioral specialist, as well as into creating its own training programs. Uber needs a formal and informal culture change. Bringing in an organizational behavioral specialist may help to analyze Uber’s departmental structure and communications flow so as to create formal communication systems that encourage higher ups to receive criticism and employees to give candid feedback. Further, the OB specialist could train Kalanick, top executives, and managers on leadership skills so as to help permeate a new informal culture from the upper ranks that infuses exploration as a first response to employee feedback.

Even though Uber ordered suspect employees from their investigation whom they did not fire to attend counseling or training programs, these solutions are a case-by-case basis and may be short-term (Ghoshal, 2017). Uber could adopt a new training program targeting sexual harassment and discrimination for all employees. For long-term effects, all employees would go through a re-training once a year.

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