Uber's image has been tarnished, say brand experts, but it has an edge: People love the service

Key Points
  • Uber's sexual harassment and discrimination scandals, added to its corporate shakeup, have the public concerned about the company.
  • It will need to improve management and be clear that it is changing corporate culture.
  • However, a Bond Brand Loyalty survey in January/February showed Uber scored high with the public on utility, meaning it would be hard for people to give up the service.
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Uber's public relations crises and management shakeups are affecting how the public looks at the service.

"There's a negative perception — there's no other way to look at this," said Frank Zaccanelli, CEO of investment and development company Fiamma Partners. "The average consumer is concerned that there's too much turmoil going on in the company and might have reservations about using the company's services."

Getting rid of key leaders may be the first step in getting the company back on track, Zaccanelli said. Uber CEO Travis Kalanick resigned from Uber on Tuesday after pressure from five of Uber's major investors, according to The New York Times. His ouster follows a wave of executives leaving, including Uber SVP of engineering Amit Singhal, who was reportedly the subject of a sexual harassment investigation at previous employer Google, and Uber board member David Bonderman, who made a sexist crack at a company meeting.

"Ultimately what they need to do is put a management team in place that will run the company and provide a complete service that consumers are looking for," Zaccanelli said. "I think there will be a wait-and-see attitude from people in the marketplace to see how Uber addresses it and how the situation works itself out."

Zaccanelli compared the company's crisis to Target, which was able to overcome a massive credit card security breach in 2014. CEO Gregg Steinhafel was forced to resign as a result. To re-establish its image, the company hired cybersecurity experts, created positions such as a chief information security officer, and rolled out more secure payment systems in its stores.

He also compared Kalanick's position to Steve Jobs, who was co-founder and the face of Apple. Jobs was fired from Apple in 1985 amid complaints that he was too hard on employees. Jobs rejoined as interim CEO in 1997 and led the company through its resurgence to become the most valuable company in the world.

To improve public perception, Uber needs to make "drastic changes" to its company culture, said branding agency Base Design partner Geoff Cook. That starts with proving to its employees that it is willing to reverse the sexual harassment and discrimination in the company.

"Its employees are its front-line ambassadors," Cook said.

There's hope Uber can bounce back. According to a Bond Brand Loyalty survey of 28,000 North Americans, which was conducted in January and February during the beginning of Uber's issues, 55 percent of customers were very satisfied with the service, and 60 percent said they'd recommend it to a friend. More importantly, 67 percent enjoyed the service and 79 percent said it was very easy to use.

That means people would have to give up something that made their lives easier if they decided to turn their back on the service, said Kyle Davies, director of research for Bond. Winning them back with some culture changes might be an easier task than expected.

"If you were a customer who decided to leave Uber because of what you've read, you'd also be likely to make your life harder," Davies said.

At the same time, it could be an opportunity for competitors such as Lyft to continue grabbing Uber's market share.

"I would be going at them pretty aggressively," Zaccanelli said. "It is a company that is obviously in a major shakeup and in a major amount of turmoil."