London Could Boot Uber Based on Reputation Issues

UBER_(1)We all know that a poor reputation is harmful to a business’ bottom line, but rarely is that connection so clear as in the case of Uber. We learned this weekend that the car service could be out business in London as soon as the end of this month, and the reason cited by regulators is “a lack of corporate responsibility.”

As The Wall Street Journal reported:

London’s top transport authority stripped Uber Technologies Inc. of its private-car hire license in the city, threatening to shut the company out of one of its biggest markets.

The surprise decision presents another obstacle for the company as it tries to pare heavy losses and right itself amid a series of scandals, probes and board infighting. The authority, Transport for London, cited “a lack of corporate responsibility” that it said could undermine public safety and security, and said it won’t issue Uber a new license when its current one expires Sept. 30.

What do regulators mean by a lack of corporate responsibility? In short, a bad reputation. You can point to a number of issues over the past two years ranging from the FBI investigating its nefarious “Project Greyball” to allegations of false advertising to sexual harassment claims, and the list goes on and on.

London is an important market for Uber, and it represents approximately 3.25 million users – nearly a third of its active user base in Europe. The annual gross revenue hit to Uber could total $400 million, about 5 percent of the company’s overall gross revenue.

Often, trying to calculate the precise damage a crisis does to a brand’s reputation is extraordinarily difficult. With Uber, we may be able to start with $400 million. The additional damage that the company has suffered by those jumping on the #DeleteUber bandwagon continues to be difficult to quantify, but it may be many times the damage that London could cause it.

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