Uber’s 180 Days of Change
One of the most frequent questions I ask my Uber drivers is, “Do you like working for Uber”? This question stems from general curiosity, and I typically receive varied responses. However, little did I know that Uber was facing numerous scandals within the past year regarding its driver experience. In the face of its recent mistakes, Uber Technologies Incorporated introduced an inside-out process reengineering initiative that will improve the experience of the driver, which will in turn improve the experience of the customer and the overall image of the company.
In late July of 2017, Travis Kalanick, the co-founder and Chief Executive of the company, resigned. More information on the resignation can be read here: http://www.latimes.com/business/technology/la-fi-tn-uber-travis-kalanick-resignation-20170620-story.html. In summary, Kalanick permitted a “corrosive culture that allowed bad behavior and sexual harassment to go unchecked for years”. [1] This reflected negatively on the culture of Uber, especially when Kalanick got into an altercation with a worker about pay. Consumers rationalized that if the co-founder of the company did not care about the opinions of the drivers, then why should they support such a system.
Uber needed to change its processes to improve customer satisfaction and regain trust, so they launched the 180 Days of Change in May of 2017. The process change includes an in-app option to tip drivers as a way to demonstrate that executives listen to and care about their drivers. The new tipping option also allows for more customer involvement throughout the process. Secondly, tolls are now incorporated into the driver fare and higher returns are given on longer rides and late cancellations. Most significantly, Uber has also decided to pay its drivers for waiting for a customer now. As an attempt to improve labor efficiency, drivers who have been waiting longer than two (2) minutes now are directly paid $5. So this $5 replaces any money on another possible ride while waiting for the current passenger. Please see photo below for a summary of all of the changes implemented, and more changes continue to arise.
Just as Uber began to make strides with its driver experience through the 180 Days of Change, another issue surfaced. Another case of sexual harassment, except this time with a customer. In November of 2017, a female and a male passenger entered a fake Uber vehicle at 3:20a.m. At some point within the ride, the male rider was forced out of the vehicle and the female rider was raped. Article Link: https://global.factiva.com/redir/default.aspx?P=sa&an=WP00000020171121edbl00029&cat=a&ep=ASE. Uber apologized for the incident, and issued a list of safety tips to its customers including confirming the driver’s name, vehicle, license plate number, and photo with the information given in the app. Although safety tips are helpful, they cannot warrant the safety of a customer. Safety is an issue many customers still face today, and Uber is still trying to figure out ways to help improve this process. Uber Technologies realizes that process improvement and reengineering is key in improving its productivity, public image, and beating out its competitors. Without success in these components, Uber will easily lose its customers to Lyft.
[1] Pierson, David, Paresh Dave, and Tracey Lien. “With resignation, Uber co-founder Travis Kalanick finally found a battle he wasn’t willing to fight.” Los Angeles Times. Accessed January 30, 2018. http://www.latimes.com/business/technology/la-fi-tn-uber-travis-kalanick-resignation-20170620-story.html
This argument is sound. It seems Uber has had trouble with customer safety since the company was established. Although Uber instigated the 180 days of change initiative, the same problems surfaced again. So, how much did the new executives and reformatting of the company actually help and reengineer Uber’s image to the customers? Do you think Uber is better off applying process improvement?
As a customer of Uber for about 3 years, I’ve always wondered and asked myself, “why am I riding in a car with a complete stranger?” Sure, Uber and other competitors require background checks when hiring drivers, but how effective are they? Obviously, they aren’t working as well as Uber hoped. What would happen if they improved the process of background checks and spent more time finding and hiring drivers? Would customers feel safer getting in the car of a complete stranger?
Yes, I feel the same way as Benjamin in regards to the safety of Uber. I often wonder why I am getting in a strangers car in the middle of the night. I usually take an UberX, but I know of some parents that urge their daughters to take an Uber Black to ensure more safety.
I agree with Benjamin. Uber has tried to fix its problems when it comes to customer and driver interactions, but still, reports of issue still seem to arise. The problem is, people are willing to get into a stranger’s car because they believe that Uber is checking to make sure it’s drivers are behaving appropriately. To ensure that they don’t lose business, Uber really needs to look at the vetting process for new drivers.
In an episode of comedy show “Nathan for You”, a spoof show centered around the main character, Nathan, and his crazy schemes to help business owners in unconventional ways, Nathan worked with taxi driver in order to help him drum up more business against Uber. As part of the scheme, he actually got a lot of current taxi drivers to register as Uber drivers in order to plant a sort of “sleeper cell” inside of Uber to have them ruin the company’s reputation out somewhere in California.
The insane thing is that it actually worked-Uber never did background checks on any of these drivers and allowed them to register as drivers, no questions asked. Even after they all suddenly started turning up with bad reviews (on purpose, of course), they were still able to pick up customers and continue being associated with the company’s name.
Anyone can be a driver, and unfortunately, in the long run, that exact thought may be Uber’s downfall.
I agree with your agruement. It seems to me that through Uber’s scandals regarding driver experience, the company has started to emphasize their customer more in improving their processes. This transition to a customer based focus relates directly to what we discussed in class and saw in the video “Welcome to the Process Excellence Revolution”. Uber’s processes are working towards what their service can provide for their customer. Uber is working towards process excellence and is on the right track on their customer focus. However, work still needs to be done. The initial blog post pointed out another scandal that arose pertaining to sexual harassment of a customer. In the age with social media, the scandal went viral and now the world is able to learn about these issues very quickly. It is apparent that a key part in Uber’s process was unsuccessful. Due to this scandal, Uber’s competitor, Lyft has been able to capitalize off of the new opportunity.
I was curious to see just how powerful social media is and the resulting impact it had for Uber in regards to this scandal. In an article found in USA TODAY, the results were profound. Lyft’s share of spending increased from 7.68% to 21.77% from June 2015 to June 2017. In regards to share of transactions or rides, Lyft increased from 10.41% to 8 24.69%. The impact does not just stop financially, the article states that “80% of Uber customers are aware of Uber’s recent scandals and those with negative views of the company have jumped to 27% from 9%”. In addition to process improvement, Uber is going to have to work on improving their image.
https://www.usatoday.com/story/tech/news/2017/06/21/yes-uber-has-lost-ridership-lyft-during-crisis/103063700/
The 180 days of change was a step in the right direction for Uber in trying to regain its relationship and trust with customers. I wanted to highlight a few more key methods they are implementing in the campaign to help formalize their customer involvement and improve the process structure. Uber is allowing users to give feedback and suggestions at any time through their app. They are pushing customer feedback to the forefront, making them a top priority for improving experience. They are also announcing an Early tester program for the drivers that will allow them to test features and updates before they are released. Uber also hosts a forum in
San Fransisco where they bring drivers to meet with members of the executive team. These employee based programs allow drivers to voice their feedback and feel a sense of involvement within the company. Uber is smart in choosing to focus on both the customer and employee rather than one over the other because it betters ensure satisfaction throughout all outlets.
In concern to the safety issues I agree with Sarah and Ben that Uber needs to focus on thoroughly investing and examining potential drivers to guarantee safe and enjoyable rides. With that being said, I do think there will always be a possibility of danger within the service. If Uber can minimize this risk to almost nothing it should really boost customer trust leading to higher engagement and increasing profits.
I think we can all agree that Uber needed an image change, especially when competitors entered the market as soon as they started to become a mainstream service, such as Lyft. Nonetheless, I find your point about the increased safety measures interesting. I feel if Uber really wanted to show its concern about its passengers they would increase the screening they do on their drivers. I do not think this will stop all the incidents that are happening, but a true rebranding must start from inside the company. If I want a job at a certain company they have the right to ask me for a drug screen and a background check, and I believe Uber should expect the same from its drivers. In addition, I think the rebranding of its public image is a good first step to make. In class, we talked about the different ways companies evaluate operations. Uber most likely did a time study of how long, on average, their drivers had to wait on riders. The extra charge for waiting is a good incentive for riders to give more accurate locations and not have their driver waste valuable time looking for them. Five dollars for two minutes is excessive in my opinion, but the time studies and data tables must have shown those two values as being the most effective. In addition, utilizing the Pareto Principle would be advantageous for Uber Technologies Incorporated. It just might be that 80% of the complaints are about the same few things. To address this in the most productive manner, Uber should spend most of their rebranding pledge improving the main issues.
Uber’s business strategy presents an interesting case. Obviously with significant success over the past few years, Uber has recognized serious revenue and attained a familiar reputation. Despite these accomplishments, the firm still experiences external conflict that has be detrimental to its international stature. As these sexual harassment incidents persist, Uber must commit some changes to its strategy and process in order to conserve its popularity.
In my opinion, the company’s 180 Days of Change operation did not appropriately correct some of the firm’s biggest and most hindering flaws. Yes, the tactic benefitted drivers by enabling customers to tip and paying for toll fees, however, the screening process for drivers remains the same. Registering as an Uber driver can be completed in under 15 minutes as you sit on your couch and watch TV. There is a minimal screening process that leaves room for possible drastic mistakes. To remedy this, I think Uber should force potential driver candidates to meet with a registered Uber employee that screens and tests the character of the candidate in person. Even though this process would be somewhat costly and decrease the amount of total drivers, I think it is important to incorporate in order to help with Uber’s ethical dilemma. It still may not be enough to fix the problem, but it will help Uber’s reputation in the long run.
Nick ended his argument with the statement that if Uber cannot continue to fix problems like improper sexual conduct, and customer and employee happiness, Uber will lose its business to its #1 competitor, “Lyft”. That comment got me thinking, as a person that has always used Uber and not Lyft, what are the differences between the two companies. First, there are many similarities between the two companies. Both Uber and Lift provide many different options to their customers that vary in type of ride, and car that will be used. Both companies have driving standards that their drivers need to pass, that ensures that they are reliable and safe drivers. Uber, since 2015 has been experimenting and testing the future of car service, with driverless cars, that will be able to pick up and take their customers wherever they want to go. Lyft has also partnered with Waymo who a self-driving technology company is, with they clear intentions of competing with Uber to reach this feat first. This initiative by both Uber directly moves against the 180 missions towards Uber’s drivers because it would completely cut them out of the business. Uber has received about 3 times as much of donations that Lyft has received, as they have received $11.56 and $4.61 billion respectively. The main difference between the two companies, which is also the main reason that It would take more then a couple incidence for Uber to lose most of their business to Lyft is due to where Uber and Lyft are available. Unlike Uber that serves in hundreds of cities in dozens of countries, Lyft operates only in the United States, 46 states to be exact. This difference is a huge reason that Uber is able to do deal with all the cases that come out about drivers miss treating customers, because at this point of their business, they have grown so rapidly that their ceiling will not be reached for many years.
Despite the fact that I use the app and sometimes rely on Uber, I completely agree that they needed some image rehabbing. After having so many issues with co-founder and former CEO Travis Kalanick, the technology company needed to get him out the door and think to the future. If they did not, yes, it is very possible that they would have been surpassed by Lyft and other competitors. The company moved on and hired Dara Khosrowshahi as its new CEO. Amid all of the lawsuits that the firm was dealing with, Khosrowshahi promptly announced that he is targeting an initial public offering by 2019. In other words, he wants to raise more money and take Uber public in one years time. Therefore, the big question is what is Uber valued at? There is no question that if Uber continues to have public image issues, public investors will shy away from the stock. As a result the value of the company will fall. In addition, if Uber can not figure out a way to ensure safety in every ride and increase the confidence of its consumers, the IPO will struggle. Like Benjamin stated above, I often wonder to myself why I am getting in the car of some random person I do not know. I am really not sure how Uber can improve this problem, but I am certain that it needs to be fixed. By the same token, Lyft needs to fix this same problem. In my opinion, Uber’s 180 Days of Change is a good start, but they need to work longer than 180 days on these issues. These topics should be at the forefront of the company’s management team’s brains, and they should maybe think about pushing back their IPO to later in the future to ensure a higher valuation.
Here is an article that talks more about Uber, its struggles, and its road to an IPO: https://www.bloomberg.com/news/articles/2018-01-16/why-uber-needs-to-take-the-high-road-to-an-ipo-quicktake-q-a
Hi Marshea, I thought you picked a really great topic for this blog post. Uber is a service, along with lyft and other similar services, that has really grown tremendously in customer base and popularity in the last 5 years or so. It’s definitely relevant for the daily life that we live, and thus, your topic caught my eye. I actually did not know about the 180 Days of Change program that the company had started in May 2017; however, thinking back on an uber ride I took just last weekend, I definitely could see that the price was increased and my toll had actually been included. In the case of the company, process improvement rather than process reengineering has been implemented because Uber hasn’t necessarily closed down any sectors of its business. The changes–charging for more 2+ minutes of waiting, tolls, and being more proactive against protecting drivers and customers–are definitely beneficial for the company and has improved the service. However, there is still an aspect of the business that is risky due to the nature of interaction between driver and customer in a private space. I am not sure how the company could completely combat sexual assault, other than eliminating and harshly punishing drivers who are not aligned with these values, but a larger social change must occur.
Uber’s model is ultimately one of low cost, and is now in direct competition with Lyft and cab companies in every major city in the world. Currently in their processes customer involvement is less than perfect, while their services are still wildly successful, several bad PR events have happened for the firm that could have been avoided. If Uber were to invest a small amount of resources into making their rides safety in a change of capital intensity or resource flexibility, it could go a long way into showing that the app performs more efficiently and safely than other ride sharing competitors.
However Uber is also involved in the race to self driving electric vehicles as well. I believe that Uber is putting its main power behind developing driverless car technology. The first auto company to successfully produce this product will quickly develop a system of ride sharing that requires no human operators, that will be extremely cheap, quickly removing its competition from the marketplace. (https://www.forbes.com/sites/greatspeculations/2017/07/10/uber-has-pole-position-in-race-to-develop-driverless-cars/#667e00487ab0 ) While driverless cars still quite far away, I believe that it will be realistically be seen on a widespread scale in my lifetime. Uber should be using its success to drive towards these processes to pursue a more long term goal, as well as trying to improve its safety record with human drivers in the interim.