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Uber's customers don't care about the scandals

Ethan Wolff-Mann
Senior Writer

These days, consumers could list a million reasons to avoid Uber.

The ride-hailing goliath stands accused of promoting its service during a taxi strike, not standing up to the Trump administration, treating its drivers poorly, and having an insensitive CEO, among other scandals. Most recently, it’s been accused of condoning sexual harassment and using deceptive tactics to skirt regulators.

This list has pushed the #deleteUber movement into the cultural mainstream and the company has recognized a crisis. Embattled CEO Travis Kalanick is now looking for a COO to assist him.

The alleged injustices perpetrated by Uber, however, may not be enough to outweigh a key quality working in the ride-hailing app’s: service.

Being singularly “obsessed” with the customer instead of merely “focused”—as the company frequently claims to be—may end up taking a toll on workplace culture. But for the customer on the other end, it also means things run extremely smoothly.

Uber CEO Travis Kalanick may have created a horrible workplace, but the product is good. Source: AP

That’s partly because Uber customers almost always find a car nearby when they fire up the Uber app. In New York City, for example, there are over 40,000 Uber vehicles on the road, compared to only 15,000 Lyft cars. (Yellow taxis number 13,000 full-time cars, but are hailed manually so are not comparable.) For someone with the simple goal of moving from point A to B, Uber’s efficiency is hard to beat thanks to its dominance in numbers.

This efficiency makes the change to Lyft a less than ideal proposition for some people.

“I’ve started using Lyft, but it’s so much [worse],” a former Uber power user named Charles told Yahoo Finance. “The wait times are twice as long typically for me, their airport feature is not very good. Their customer service is worse too. I can stomach all that,” he said, because he’d rather not use Uber, “but it’s a different experience for sure.” Recalling a video of Kalanick arguing with a struggling and disgruntled driver, he mused, “Why does every executive have to be like this?”

While some customers “can stomach” the slightly less smooth user experience of Lyft, which includes a tip screen (Uber does not include tips or even offer a screen), Uber’s superlative level of service has kept many potential sympathizers out of the #deleteUber movement. There’s also another simple reason customers like Uber: many people perceive it as usually less expensive than alternatives like Lyft and taxis, at least when surge-pricing is not implemented.

“Uber is cheaper than Lyft,” said a current Uber user, who preferred to remain anonymous due to the rising stigma attached to the company. He is considering deleting Uber but hasn’t yet. “It also has an unsustainable business model and is probably doomed,” he told Yahoo Finance.

This Uber user makes a good point about Uber’s business model. In efforts to grow to a massive, global scale and keep its market share strong, Uber has subsidized rides to keep passenger fares attractively low in cost. While this makes Uber more affordable, these moves may end up being unsustainable as the company could run out of money. In that case, it may be forced to hike fares and repel customers. Or Uber may be forced to cut drivers’ pay, which would anger them and shrink its supply of available cars.

For now, the current Uber user told us, “I’ll let these VCs subsidize my cab rides.”

Ridership data since #deleteUber went viral has not been published by New York City’s Taxi and Limousine Commission, but previous Uber scandals have not significantly detered consumers, illustrating the sturdiness a cheaper, better product has over bad headlines. Of course, there may be a ceiling for the number scandals a consumer can stomach. With enough bad headlines, Uber will find out where it is. Alternatives like Lyft and Juno do exist for its customers, and some of them are taking advantage of Uber’s exodus. After the backlash against Uber’s conduct during the taxi strike, Lyft announced a $1 million donation to the ACLU. Soon after, Lyft app daily downloads surpassed Uber for the first time ever.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, tech, and personal finance. Follow him on Twitter @ewolffmann. Got a tip? Send it to tips@yahoo-inc.com.

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