Uber cus­tomers torn be­tween scan­dals, ser­vice

Although some rid­ers have fled, enough have stayed be­cause of con­ve­nience

The Mercury News Weekend - - SPORTS - By Tom Krisher and Bar­bara Ortutay

DETROIT » Uber has man­aged to hold the ti­tle of world’s largest ride-hail­ing ser­vice de­spite its seem­ingly end­less string of scan­dals.

Its lat­est mis­be­hav­ior in­volv­ing a data breach cover-up re­vealed this week could be the im­pe­tus for peo­ple to ride else­where — or keep look­ing the other way.

Hack­ers were able to steal data for 57 mil­lion rid­ers and drivers, and Uber con­cealed it for a year af­ter pay­ing $100,000 in ran­som for the stolen in­for­ma­tion to be de­stroyed.

Rid­ers and busi­ness ex­perts say that while Uber’s prob­lems such as work­place sex­ual ha­rass­ment, drivers with crim­i­nal records and other past in­frac­tions are se­ri­ous, stolen data hits peo­ple di­rectly and could make them mad enough to delete the app. Then again, rid­ers have fled from the ser­vice be­fore, but enough have stayed be­cause of the Uber’s con­ve­nience so the lat­est scan­dal- of-the-week may not make much of a dif­fer­ence. The brand is so well-known for quickly re­spond­ing to ride re­quests that it’s of­ten used as a verb for such trips, no mat­ter which ser­vice is sum­moned.

Michael Pachter, a tech­nol­ogy an­a­lyst based in Los An­ge­les, said he uses Uber five to 10 times a month.

“I don’t blame the drivers

for the com­pany trans­gres­sions, and view Uber as the glue that fa­cil­i­tates drivers will­ing to drive me around,” he said.

But for Ver­mont res­i­dent Jay Furr, the breach was the “fi­nal straw.” He had stuck with Uber de­spite re­cent prob­lems be­cause of the ser­vice. But now he’ll use Lyft, Uber’s main com­peti­tor, when he goes to the air­port for fre­quent busi­ness trips.

“Why re­ward crooked be­hav­ior?” he asked. “The only way they will learn is if they lose busi­ness.”

For much of the past year, Uber has been mired in well-pub­li­cized prob­lems. A fe­male for­mer engi­neer blogged that her boss had propo­si­tioned her for sex, ex­pos­ing wide­spread sex­ual ha­rass­ment. A fed­eral judge urged pros­e­cu­tors to in­ves­ti­gate al­le­ga­tions that Uber stole tech­nol­ogy from Waymo, Google’s au­ton­o­mous ve­hi­cle unit. The Jus­tice De­part­ment is in­ves­ti­gat­ing whether Uber used a bo­gus app to de­ceive in­spec­tors in sev­eral cities, and in Lon­don, au­thor­i­ties de­cided not to re­new Uber’s op­er­at­ing li­cense in part for fail­ing to re­port crimes.

Ear­lier this week the state of Colorado fined Uber $8.9 mil­lion for al­low­ing em­ploy­ees with se­ri­ous crim­i­nal or mo­tor ve­hi­cle of­fenses to drive for the com­pany. Then came the stolen data, which has touched off more gov­ern- ment in­quiries.

The scan­dals have dam­aged Uber’s brand rep­u­ta­tion over time, said Robert Pas­sikoff, pres­i­dent of Brand Keys Inc., a New York- based cus­tomer re­search firm. The com­pany’s polling has found that in 2015 Lyft passed Uber as the most trusted of ride­hail­ing brands, and trust in Uber has been erod­ing ever since. Con­sumers will give tech­nol­ogy com­pa­nies the ben­e­fit of the doubt for a long time. But with Uber, “That well of for­give­ness isn’t bot­tom­less,” Pas­sikoff said.

Pas­sikoff doesn’t mea­sure the im­pact on rid­er­ship and Uber won’t dis­cuss it. But Lyft says its share of the U.S. mar­ket has risen 3 per­cent­age points since Au­gust to 33 per­cent. It’s up from 12 per­cent two years ago as Lyft has ex­panded with more drivers in ma­jor U.S. cities.

In the data breach, Uber has said that for rid­ers, hack­ers got only names, email ad­dresses and tele­phone num­bers. They did not get per­sonal in­for­ma­tion such as trip de­tails or credit card and So­cial Se­cu­rity num­bers. For about 600,000 drivers in the U.S., hack­ers got driver’s li­cense num­bers, and the com­pany has of­fered them free credit mon­i­tor­ing ser­vices.

While Uber drivers lost per­sonal data and face un­cer­tainty over iden­tity theft, it ap­pears they’ll stick with Uber. Many drive for Lyft as well.

Nate Tepp, who drives Uber in Seat­tle, said he doesn’t plan to leave, nor does he think other drivers will.

“All they are do­ing is cut­ting out 60 to 65 per­cent of their in­come,” Tepp said of drivers who might con­sider leav­ing. That es­ti­mate is based on his own split be­tween Uber and Lyft fares.

Tepp also thinks the last three to four months at Uber have been dif­fer­ent and things have “started to go in drivers’ fa­vor.” This in­cludes adding an op­tion for rid­ers to tip.

He is also some­what for­giv­ing about the hack­ing— and the sub­se­quent coverup. Af­ter all, com­pa­nies are hacked of­ten, he said.

“Does it make me happy? No. Does it (make me an­gry) to the point that I am go­ing to stop mak­ing money through that com­pany? No,” he said.

New Uber CEO Dara Khos­row­shahi could do lit­tle but ad­mit the prob­lem and prom­ise eth­i­cal be­hav­ior in the fu­ture. “We are chang­ing the way we do busi­ness, putting in­tegrity at the core of ev­ery de­ci­sion we make and work­ing hard to earn the trust of our cus­tomers,” he wrote in a blog post.

Mar­lene Towns, a pro­fes­sor at Ge­orge­town Univer­sity’s busi­ness school who stud­ies brand val­ues, said Uber is test­ing the bound­aries of how­many scan­dals peo­ple will en­dure. While data breaches are per­sonal to peo­ple, she still thinks Uber will get through this scan­dal as well.

“We have a short me­mory as con­sumers,” she said. “We tend to be if not for­giv­ing, for­get­ful.”


Through a string of al­most weekly scan­dals, Uber has man­aged to con­tinue grow­ing and hold onto the ti­tle of the world’s largest ride-hail­ing ser­vice.

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