Uber tries to lure back riders it’s lost amid reputation crisis

Market share is down as rival Lyft’s has increased

Uber vows to remake itself in the wake of an internal investigation that made 47 recommendations, which were released Tuesday. Their aim is to rid the ridesharing company of its reputation as harboring a sexist and cutthroat workplace.

CEO Travis Kalanick, who recently lost his mother in a boating accident, announced he will take a leave of absence while the search for a new chief operating officer continues.

That turnaround can’t come soon enough. Rival Lyft is nipping at the heels of the embattled start-up, which has been hammered by an incessant stream of bad news related to its treatment of employees and its business practices.

At stake is Uber’s ability to recruit top talent to continue its meteoric rise to a $70 billion valuation, as well as its retention of a dominant market share that is critical to keeping its business model viable.

“The demand for (Uber’s) product is not Teflon, and competitors are really smelling blood in the water,” says Jeremy Robinson-Leon, principal at corporate communication firm Group Gordon.

In fact, Uber’s U.S. market share and brand image have slipped in the tumultuous months after a former engineer’s blog post blasted the

ride-hailing company for what the ex-employee called a sexist work environment, according to three recent surveys of credit card spending and consumers’ attitudes.

Over the past two years, Uber’s share of rides has dropped to 75% from 90%, according to TXN Solutions, a company that creates sales estimates based on credit card receipts. The last 3-point slip — to 75.3% from 78.8% — happened between Susan Fowler’s mid-February blog post and the first week in June, according to the data compiled for USA TODAY.

The market share of rival Lyft rose to 24.7% from 21.2% over that period, which rang out with Uber news on topics such as its use of a fake version of its app to dupe municipal regulators to, more recently, a senior executive’s sharing of medical records of an Uber driver’s rape victim.

Two surveys — from management consultancy cg42 and Morning Consult Brand Intelligence — found consumers’ view of the company has dropped.

Uber did not respond to a request for comment on TXN’s data. In late May, Uber confirmed a

Wall Street Journal report that indicated business was improving for the privately held company at the start of the year. The start-up narrowed its quarterly losses to $708 million in the first quarter from $991 million in the fourth quarter of 2016.

Uber has faced backlash since January, when controversial pricing during protests over the Trump administration’s attempted travel ban sparked a #deleteuber campaign.

Lyft market share gains over the period are due in part to its rapid expansion to 300 U.S. cities.

In a recent survey, cg42 found 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% since the news began to tarnish the company’s reputation.

“26% of Uber’s customers claim they are actively exploring alternatives and will use Uber less frequently, but only 4% have actually made the decision to switch services as a result of the negative news,” the cg42 report says. “This is a low switch rate, specially when considering barriers to doing so are low.”

But the impact of Uber’s woes is real. Before the scandal, the report says, 13% of prospective Uber users “were very or extremely unlikely to consider doing business with the ride-hailing service, ( but) post-news, 32% say they would not do business with Uber.”