Uber's latest flap is denting its brand

Perhaps Uber is not as bulletproof as once thought. After months of allegations about dirty dealings barely budged the needle on the startup’s public perception, it seems as though the tide has turned with one unfortunate remark to a reporter.

The company found itself furiously backpedalling Wednesday when BuzzFeed reported that its svp for business, Emil Michael, outlined a plan to “hire four top opposition researchers and four journalists.” He made his comments at a dinner party and assumed he was speaking off the record. In response, Uber CEO Travis Kalanick tweeted a series of apologies that did little to quell the firestorm.

The mini-scandal broke open the day after Uber said that it was investigating Uber New York general manager Josh Mohrer for tracking another BuzzFeed reporter without her permission. On the same day, the company, perhaps feeling pressure for the first time, published its privacy policy. And then Sen. Al Franken sent Uber a letter inquiring about its data-tracking policies and behavior.

The flap is the latest, and suddenly the biggest, indictment of one of the hottest startups to come out of Silicon Valley in recent years. In recent months, there have been reports that Uber employees would book and cancel rides with competing service Lyft to decrease its availability. Uber has also allegedly been poaching Lyft drivers. The car service has even been implicated in an alleged kidnapping.

And in spite of it all, it has seemed as if Uber was invincible, shielded by its $17 billion valuation (reports said it was on its way to $30 billion, despite the damning stories) and the promise of a product that was actually changing how we traveled

Until now.

Hard data on how many users are deleting the Uber app is not available. But interest in information on how to cancel Uber accounts seems to be at an all time high. WikiHow said its article on “How to cancel an Uber account,” experienced an increase of over 10,000 percent compared with March, and 900 percent compared with last week. It was the No. 1 most popular article on the site Tuesday morning.

App Annie Intelligence found that Uber’s download rank also plummeted from 24 to 41 since Nov. 15. Uber did not respond to a request for comment.Screen Shot 2014-11-19 at 3.19.07 PM

“A great, long-lived brand begins with trust,” said Peter Sims, investor and co-founder of FuseCorps who personally stopped using Uber when he found out that Uber execs could track his location. “The company’s culture is way too immature and arrogant and unethical for the big time.”

Fred Wilson of USV, which has investments in Uber competitors Hailo and Sidecar, wrote that he’s in “awe” of how well Uber has done from a business perspective. But what he is not in awe of is “how they conduct themselves.” Peter LaMotte, svp and chairman of the digital communications practice at crisis PR firm Levick Communications, said Uber needs to “start acting like the mature company their financials suggest they are.”

Sam DiGennaro, founder of PR firm DGC, said that extends to executives. “Even as Silicon Valley breeds young billionaires like they’re going out of style, it’s still incumbent upon these executives — of any level, experience or age — to serve as brand stewards and talk responsibly about their company,” she said. “If this bad publicity isn’t stopped in its tracks and continues to gain traction across social media, it could do real damage to Uber’s business.”

The general sentiment surrounding Uber has also been increasingly negative: Topsy analytics show a very low sentiment score of 21 (out of 100) in the last day, down from 53 a week ago. Lyft, by contrast, has held steady at 58 or 59 over the past week.

At the same time, it’s fair to wonder if average people outside of the Silicon Valley press bubble actually care all that much.

“People have an inherent desire to help the small guy,” argued Interbrand CEO Jez Frampton. Because Uber might still be seen as a startup, this gets people to say, “Go for it, Uber,” especially when it looks like they’re standing up to the press. The current Uber controversy, to be fair, is the product of the media on Twitter. “With the greatest respect to journalists, this isn’t something affecting normal people,” said Frampton.

Where the scales may tip more markedly is over privacy concerns. Uber knows where its riders are going, and it does have a lot of data on them. A few years ago, tech culture blog Boing Boing pointed out that Uber wrote a blog post called “Rides of Glory,” which purported to chart its users one-night stands. And yet, a Pew Research study found earlier this month that although privacy in the abstract sense is important to Americans, they aren’t about to stop using the services or apps that collect their data.

“The fact is, people interact with Uber when they order their cars and sit in them,” said Frampton. “At the end of the day, the relationship with Uber comes down to the relationship with the driver.” As long as the transaction has the desired outcome, the rest is all in the abstract.

Until now, Uber has remained bulletproof brand thanks in no small part to the expectation that that it’s OK for Silicon Valley brands to act brash, not be cowed by public opinion, as long as the product works.

As Katie Benner wrote in an op-ed column on Bloomberg View this week, venture investors “generally don’t care in the slightest about the public perception of startups or bad behavior” as long as there is a profitable exit in the books. Uber CEO Travis Kalanick may just be taking his place in the annals of quirky, rude tech CEOs like Mark Zuckerberg and Steve Jobs before him. 

Levick Communications’ LaMotte thinks Uber can erase much of this bad reputation by taking strong action. One way would be to fire Michael, the exec who made the comments at dinner. “When companies in the Fortune 500 have executives say these kinds of statements, something happens,” said LaMotte. “What will decide whether people start uninstalling the app is going to be ethical questions. Nobody wants to use a company with a rotten culture.”