Uber's PR missteps aren't hurting business ... yet

Uber is in hot water with the media again, and it could be a tipping point of sorts for the company.

The ride-sharing app's latest PR gaffe stems from comments made on Friday by Emil Michael, Uber's vice president of business.

According to a BuzzFeed report, during a dinner attended by Uber CEO Travis Kalanick and journalists from various media outlets Michael made statements suggesting Uber should hire its own team of journalists to dig up dirt on reporters. His comments were specifically aimed at one reporter, Sarah Lacy, the editor of the tech website PandoDaily, who has been critical of the company.

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Michael apologized for his statements on Monday and said he believed the conversation was off the record.

Uber's aggressive business behavior has earned itself both fans and critics, and some in the industry wonder whether the company will need to do more to ensure the public that it's an ethical company.

"There are things that are said that are emotionally charged of which an apology can only accommodate so much. In this case it could also be interpreted as a vocalization of Uber's culture and management style and for it to be voiced in front of [CEO Travis Kalanick] communicates this is a way of business for the company," said Brian Solis, an analyst at Altimeter Group, a San Mateo, California-based firm that researches the impact of new technologies.

Emil Michael, senior vice president of business for Uber Technologies.
David Paul Morris | Bloomberg | Getty Images
Emil Michael, senior vice president of business for Uber Technologies.

"Even though Michael might be the right person for the job, at a time when the company is so publicly scrutinized, it needs more friends than enemies. A change is imminent," he added.

Michael's comments come at a time when Uber is being valued at more than $25 billion and while investors might favor the company's bold business style, they might want the company to tighten the reigns on publicity, Solis said.

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"Is it the tipping point? I think the company and employees have tactics that we don't even know about that are aggressive and controversial and I would expect for an investor who wants a return on a significant series of investments at such a tremendous valuation, those tactics are going to continue, they are just going to be smarter about how they operate and what you know about," Solis said.

The heaps of bad publicity the company has received might also prevent it from being able to develop partnerships and alliances with others in the tech and transportation space, something it desperately needs to succeed in its battle against the taxi industry in the U.S. and around the world, Solis said.

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"I'm sure this is not going to help them in any types of political or strategic discussion with other businesses or politicians because this might be viewed as a bit to hot to align with at the moment, a bit too risky," Solis said.

"It happens and it's hard to control everybody, said Semil Shah, an investor with the Haystack Fund in Palo Alto, California, who's writing a book on Uber. "This kind of stuff just chips away at the work that everyone at the company is doing," he said.

CEO Kalanick took to Twitter Tuesday to say Michael's comments "were terrible and do not represent the company."

"His remarks show a lack of leadership, a lack of humanity, and a departure from our values and ideals," Kalanick said in series of tweets addressing the controversy.

Do consumers care?

While the company's bad press clearly upsets some in the industry, it doesn't seem to have impacted the company's reputation among consumers.

"I think consumers are more likely to contribute it to the stupidity of the executive, rather than attribute it to the brand," said Robert Passikoff, founder and president at Brand Keys.

Brand engagement is about the delivery of expectations and Michael's statements don't really touch on the attributes, benefits or values that consumers are looking for in terms of delivery of the service, Passikoff said.

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What's more likely to negatively impact Uber's brand with consumers are reports of Uber scheduling and then canceling rides from its competitor Lyft, because it gives consumers the impression the company is vulnerable against competition, he said.

"That can be far more damaging than the just a misstatement by an executive," Passikoff said.

However, if an executive had made a statement that was "tangential to the actual service, like corporate social responsibility or something that was considered to be socially unacceptable, like some statement about minorities," then it might also negatively impact the brand.

Wooing the media

While Michael's statements might not phase consumers, it spurred a backlash from the media. This, of course, is nothing new for Uber.

"You have to first take a look at the nature of the criticism. Uber is widely criticized because of how disruptive they are...They have so many eyeballs on them, so much attention being paid to them, everything is being dug up on them," said John Bonini, marketing director for Impact Brands.

Uber has become a "whipping boy" in the media, so it has developed a tendency to lash out when under attack, Bonini said.

While Michaels comments were "stupid," Uber's brand won't suffer the consequences, Bonini said.

"I don't think anything like that could hurt the brand. It's a defense that you would expect from someone who is constantly getting the crap beat out of them," he said.

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However, he said the company may begin to put up an "iron curtain" in regards to the media if these kinds of incidents keep happening.

But for now, the company needs all the name recognition it can get as it continues to take on an industry that is steeped in politics and bureaucracy, Bonini said.

"Is all press is good press? I don't believe that 100 percent, but I would say when you are going after an industry like the transportation industry you need all the attention you can get," Bonini said. "They are in a tough place to sort of gain traction and yet they are doing it and largely they are doing it because people hear their name all the time."