Have Scandals Overshadowed the Uber Customer Experience?

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Customer Strategy
Customer Experience
At what point do customers stop doing business with companies that display egregious and reckless behavior? The popular app-based car service Uber is testing the limits of its loyal customers with one scandal after another. The latest scandal showed the ugly side of Uber's predatory corporate culture when an executive reportedly discussed the idea of investigating the private lives of journalists who criticized Uber, starting with Sarah Lacy, founder and editor-in-chief of PandoDaily.

At what point do customers stop doing business with companies that display egregious and reckless behavior? The popular app-based car service Uber is testing the loyalty of its customers as one scandal after another pops up. The latest scandal showed the ugly side of Uber's predatory corporate culture when an executive reportedly discussed the idea of investigating the private lives of journalists who criticized Uber, starting with Sarah Lacy, founder and editor-in-chief of PandoDaily.An aggressive culture is necessary in business, particularly in the tech-heavy startup world. But Uber's growing list of scandals has become a huge distraction from its innovative service. The four-year-old car company has been accused of unpredictable price surges, underpaid drivers, drivers who have sexually assaulted passengers, and tracking a reporter's Uber profile without permission, among other issues. It also leaves room for competitors like Lyft and other car services to position their services as less contentious.

Other companies have been criticized for poor business practices and changed their behavior. Facebook, while not perfect, has gone from altering its settings with little notice to informing users of the coming changes in blog posts and alerts.

Even Amazon, whose aggressive business practices have been well documented, isn't immune to negative publicity and angry customers. The behemoth online retailer has been locked in a highly public dispute with book publisher Hachette over electronic book prices. Amazon hid listings of Hachette books and discouraged sales, provoking protests from publishers and authors over the company's bullying methods.

The negative publicity could be having an effect on Amazon's bottom line. In the third quarter, North America media sales, meaning books, movies and music, represented the slowest growth for the category in more than five years and a significant slowdown from the 13.4 percent increase in the second quarter, reported The New York Times.

While Amazon's chief financial officer, Thomas J. Szkutak, attributed the slowdown to a shift to renting textbooks versus buying them and a strong 2013 quarter, analysts were not convinced.

"This was a violent deceleration in growth," Colin Gillis, an analyst with BGC Partners, told The New York Times. "The controversy with the publisher likely also contributed to the slowdown."

At the same time, customer outrage can be short-lived. Even when companies have been publicly shamed and fined, many continue to operate with few changes. But this shouldn't be the case. In the so-called age of the empowered customer, customers need to take their business elsewhere to drive home the point that irresponsible business practices are not acceptable.

EXPERT OPINION
EXPERT OPINION