OPINION: Transport disruptor Uber has just had a warning that a sustainable brand needs to be much more than edgy, convenient, and cheap.
The company, labelled the ultimate disruptor, has just been stripped of its licence by Transport for London, largely for not playing by the rules.
Ironic because one of the rubrics of disruption is meeting a demand or solving a problem by not playing by convention.
Uber is expected to appeal the ruling of the local government body responsible for the London transport system which says the digitally operated transport and food delivery company is “not fit and proper to hold a licence”.
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Disrupters like Uber have challenged regulators in many industries who need to ensure the fundamentals are observed like health, safety, fair treatment of customers, staff and contractors and paying a fair share of tax.
But they need to weigh these rudiments up with benefits like Uber’s which offers low-cost convenience to customers who can use an app to order a cab.
Loyal Uber customers immediately responded to the ban with a petition that reached hundreds of thousands of signatures within days.
But interestingly, the response from Uber’s new chief executive, Dara Khosrowshahi, was to refer to the company brand, saying it was a time to reflect and ‘the truth is that there is a high cost to a bad reputation”.
Uber has spread rapidly throughout the world, operating in 633 cities and the chief executive will be aware that regulators everywhere will be watching with interest to see the outcome of the appeal.
It is true Uber’s reputation has been sullied by numerous accusations and concerns. Companies whose very existence is being threatened by their disruptive competitors are pushing back hard, saying it has an unyielding corporate culture.
Uber’s previous chief executive, Travis Kalanick, resigned in July following a series of scandals and criticism of his management style.
This was after several staff were sacked following an investigation into sexual harassment and bullying, and concerns that Uber had failed to report assault allegations against its drivers to British police.
There have also been reports of an increase in accidents involving Uber drivers who are being offered incentives to work longer just as they are signing out.
Any company will seriously damage its brand if it develops a reputation that flouts health and safety laws for both its customers and its staff.
And while there are, no doubt, customers who totally focus on low prices, there are plenty of example of customers who have turned their backs on firms whose treatment of staff has been questioned.
Internationally Uber will be watching the outcome of this stoush in London pensively. But there will be broader interest too.
This very public push back at an innovative company has wide reaching implications for digital disruptors that some commentators say are going from heroes to villains.
For some time now we’ve heard calls to regulate major digital companies like Google and Amazon who are being accused of “trying to snuff out competition” while paying much less tax than they should.
The mayor of London has indicated that there is a likely compromise for Uber but the action the city has taken still acts as a warning to innovators and customers alike.
There is no doubt that Uber’s digital disruption to the taxi service was genius but long term, whether edgy and new or traditional – a company’s brand relies heavily on its reputation.
And innovators shouldn’t forget that brand includes everything it does from price to the way it treats its contractors and cares for its customers.
Cas Carter is a marketing and communications specialist.