Introduction
Uber, as one of the biggest ride-hailing businesses in the United States, experiences significant financial losses. They are caused by the improper policies of the company with regard to its principal operations. All the emerging issues are conditional upon the fact that it attempts to expand the activity instead of focusing on addressing the existing challenges (Siddiqui, 2019). In other words, the orientation on external factors, such as the image and reputation, as opposed to internal circumstances, including working conditions and the development of long-term strategies, defines Uber’s inability to remain attractive. Therefore, investing in this company does not appear to be an advantageous decision. Uber’s profits are unlikely to increase due to numerous scandals and allegations, its unfavorable image compared to rivals, and the failure to ensure the growth of food-delivery services.
Scandals and Allegations
The first area evoking concerns of potential investors is a spate of scandals around Uber’s business decisions and frequent inactivity. First, the ride-hailing giant is known for collecting fares during a taxi strike, and this fact reflects its attitude towards its employees (Siddiqui, 2019). It also shows the unwillingness of Uber to cooperate with people while establishing rigid rules instead of providing appropriate conditions for work. Second, the information regarding culture, which promotes sexual harassment, does not contribute to its reputation (Siddiqui, 2019). It adds to the indifference regarding the rights of women and undermines the positive perception of the company by the public. As a result, these circumstances define the negative image of Uber not only for clients but also for partners.
Moreover, the business initially ignored the challenges described above, and the consequent actions happened to be completely ineffective for making a change regarding reputation. The movement known as #DeleteUber turned into a large-scale initiative, which emphasized the presence of problems and the lack of appropriate solutions (Siddiqui, 2019). The developed marketing campaign intended for rebuilding the image of Uber also failed despite the use of television commercials (Siddiqui, 2019). These events contribute to the undesirability to cooperate with the company since, in the case of emergencies, it will not be able to overcome difficulties in a timely manner. This conclusion is confirmed by the ongoing decrease in revenue causing investor pressure, which, nevertheless, remains unaddressed by Uber’s managers. In turn, they are attempting to remain profitable at the expense of their employees (Siddiqui, 2019). Thus, investing in this business is not a good idea from the perspective of its current situation, which is unlikely to change, and inappropriate methods to solve the problems.
Reputation in Comparison with Competitors
Another aspect of the matter explaining why Uber is not a reliable partner is its situation on the market compared to other similar enterprises. According to the recent data, it continues to give up market share to Lyft, its main competitor (Siddiqui, 2019). This outcome is significantly conditional upon the issues with brand reputation and the attention of Uber to expanding its activity instead of improving the image. Hence, its business model, which does not incorporate any effective long-term strategic solutions as opposed to Lyft, and the financial pressure of rapidly evolving market conditions prevent Uber from developing them. Moreover, the business has never been actually profitable since this area was neglected from the very beginning, as can be seen from the decisions of managers specified above. Therefore, one cannot expect their position to shift in the case when there are more successful competitors, the increasing number of problems, and the lack of shared vision other than expanding the company.
The reason for this position of Uber is its attempts to alter policies in the context of the lack of solid grounds for a shift. It heavily relies on metrics, which do not provide an accurate picture of challenges and, consequently, leads to distortion in the selection of methods to overcome them (Siddiqui, 2019). In turn, the adopted internal tracking tools and external polling firms only indicate the presence of the problems and the increasing influence of other ride-hailing businesses contrasted by Uber’s slow growth (Siddiqui, 2019). As a result, the managers of the company recognize the necessity to act but do not possess sufficient information on how to make it more attractive for customers than rivals’ services. In this way, the absence of an efficient mechanism to affect brand sentiment indicates the continuous crisis for Uber, and this situation allows considering it as inappropriate for investing.
Problems with the Food-Delivery Service
The services of Uber are not limited to transportation, and other fields, in which it is involved, require particular consideration by potential investors. As follows from the analysis above, the company cannot be viewed as a profitable entity suitable for long-term cooperation. Meanwhile, the same applies to its initiative regarding the restaurant delivery business, which has proved to be accompanied by struggles and problems without solutions. Thus, the attractiveness of these services in the past brought significant benefits, but the results happened to be short-term due to the inadvisability of entering this industry. It was defined by the unreasonably high delivery fees stemming from cumulative payments to drivers (Baertlein, 2019). Subsequently, increasing the prices for customers adversely affected their preferences, whereas decreasing them eliminated the possibility of receiving substantial profits. These results indicate limited opportunities for the development of Uber in this area.
In this industry, the competition presented by stronger and more experienced players in the market also adds to the impossibility for Uber Technologies to survive. Large businesses, such as Grubhub Inc., DoorDash, and Postmates, have a better reputation and more capabilities in terms of varying prices and other conditions. For example, they can successfully provide discounts to diners and restaurants in order to increase their share in online delivery sales in this field (Baertlein, 2019). At the same time, Uber cannot follow similar policies since its participation is already unfeasible in practice, as follows from its inability to balance between customer fees and driver payments mentioned above. Its successes in increasing the amounts of deliveries also seem dubious since they do not receive any profits from this measure (Baertlein, 2019). Therefore, the presence of Uber in this competitive market does not promote the business’ progress.
Conclusion
To summarize, the intention to invest in Uber is undesirable from the point of view of the company’s current unfavorable position. It is connected to its inability to resolve emerging issues of any nature, neglect of problems until they become public, and inefficiency of measures to address the crises. These factors are complemented by the presence of numerous competitors with a better reputation, higher profits, and well-thought strategic directions. Since these components are not considered by the managers of Uber, its activity alongside the rivals in both ride-hailing and food delivery services is not productive. The absence of experience of employees in addressing these needs also adds to the negative perceptions of partners and prevents them from relying on the outcomes of their cooperation.
Works Cited
Baertlein, Lisa. “Uber Filing Lists Revenue Gains, Struggles of Food Business.” Reuters, 2019.
Siddiqui, Faiz. ” Internal Data Shows Uber’s Reputation Hasn’t Changed Much Since #DeleteUber.” The Washington Post, 2019.