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Convenience v Brand Power: How Resilient is Uber?

3rd April 2017


What happens when your ethical stance risks leaving you stranded?  

Ah, millennials. So much has been said or written about this fascinating cohort, including by my Grayling colleagues, that I hesitated before diving into another post that uses ‘the M word’. But something caught my eye this morning that made me think again about this group. Moreover, it reminded me of the power of the brand.

All the research tells us that millennials are a caring generation, or rather, an ethical one. They expect brands and corporations to behave in ethical ways. They want, we are told, to contribute towards having a positive impact on the world, to ‘make a difference’.

But do they really?

Ride-sharing company, Uber is enduring some bad press at the moment through a series of circumstances largely of its own making (neatly summarized in my colleague Peggy Carlton, here). And while it is difficult to judge the actual cost of such reputational damage to a private company, it would be hard to argue that Uber is unaffected by its recent scrapes.

The #deleteUber campaign that sprang up in the wake of Uber’s initial opportunistic response to New York taxi drivers’ boycott of JFK, was driven by millennials – they are, after all, the heaviest users, as well as being the most inclined to take action against companies they perceive as unethical. But new research by LendEDU – conducted in March 2017 and reported by eMarketer – suggests that very few millennials plan to stop using Uber. In fact 93% said they wouldn’t.

So what does that tell us?

Far be it from me to suggest that millennials say one thing (#deleteUber) and do another (#continuetotakeUber). While I am sure there is an element of that, I don’t believe it is as simple as convenience trumping ethics.

No, I believe this data actually tells us less about millennials than it does about the power of the brand.

My assertion is that Uber’s brand resilience is such that it can weather even the considerable storms the company has endured in recent months. And possibly even worse. Although not the first to market, Uber is far and away the market leader, with a share of around 87% in the US. Not only is it almost ubiquitous, it has become synonymous with the very idea of ride-sharing app – a byword for the service itself. And when your brand name becomes a verb, you know you’re in a strong position. Just ask William Henry Hoover.

But the ride-sharing market is still immature. The same Pew research that showed millennials to be the heaviest users, also showed that only 15% of Americans had ever used any kind of ride-hailing app. And a full third of Americans had never even heard of Uber, Lyft or any of their competitors.

 

15% of American adults have used ride-hailing apps

So while the folks at Uber can breathe a sigh of relief that their millennial loyalists do not appear to be deserting them in droves, in a growing and dynamic market there is no room for complacency, and even established, trusted brands can find themselves vulnerable. Just ask Frank Winfield Woolworth.      


Jon Meakin

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