Communication Strategy to Improve Stakeholder Satisfaction

Louis Chavez, Simran Heer, Hagen Hyatt, Haley McCartan, Nick Schok

February 22, 2018

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Table of Contents
Executive Summary ................................................................................................................................. 4
Introduction ............................................................................................................................................ 5
Situation .................................................................................................................................................. 5
Background ............................................................................................................................................. 5
Analyses .................................................................................................................................................. 6
Customer Analysis ............................................................................................................................... 6
Driver Analysis ..................................................................................................................................... 6
Competitor Analysis............................................................................................................................. 6
Recommendation #1: Customers ............................................................................................................. 7
Increasing Intensity of Background Checks ........................................................................................... 7
Centralizing On Security Procedures .................................................................................................... 7
Values Tests ......................................................................................................................................... 7
Process and Procedure ........................................................................................................................ 7
Virtual Interview .................................................................................................................................. 8
Outcome of Implementation................................................................................................................ 8
What Is the Cost .................................................................................................................................. 8
Recommendation #2: Drivers .................................................................................................................. 8
Benefits and Increased Pay .................................................................................................................. 8
Implementing New Pay Rates for Drivers ............................................................................................. 9
Providing Benefits and Rewards for Loyal Drivers................................................................................. 9
Outcome of Implementation.............................................................................................................. 10
Recommendation #3: Competition ........................................................................................................ 10
Implementing Charitable Promotions ................................................................................................ 10
Expanding Into Competitors’ Markets ................................................................................................ 10
Unique Partner Opportunities............................................................................................................ 11
Outcome of Implementation.............................................................................................................. 11
Response ............................................................................................................................................... 11
Ensuring Safety Increases ROI ................................................................................................................ 12
Satisfying Drivers Increases ROI ............................................................................................................. 12
Learning from Our Competition Increases ROI ....................................................................................... 13
Conclusion ............................................................................................................................................. 14
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References ............................................................................................................................................ 15
Appendices............................................................................................................................................ 17
Appendix A: Budget for Recommendations ........................................................................................ 17
Appendix B: Advertisement Budget Analysis ...................................................................................... 18
Appendix C: Implementation Timeline ............................................................................................... 18
 Uber Technologies Inc. | 4

Executive Summary
The purpose of this document is to demonstrate how realigning our corporate culture
through our practices will regain the trust of the public and improve our overall image.
Last year, a #DeleteUber campaign circulated Twitter, which led to many of our
internal issues coming to light in the public eye. Three key stakeholder groups affected
by this viral hashtag were our customers, our drivers, and our major competitors. The
following information will exemplify how these stakeholder groups were innately
affected, and how we propose to execute changes that will regain public trust in the
future.

One of the biggest concerns addressed by the media is our lack of security. Our
customers are concerned about their safety when hailing a ride with our application.
To reassure this group that we are a company that values the safety of our riders, we
will implement background checks and values tests in the hiring of our drivers. This
will not only aid us in gauging the types of individuals we are interviewing, but also
ensure that we are employing the right people.

By ensuring that we have the right individuals, we can move forward on improving the
retention of our drivers by giving them better working conditions. Our drivers are
displeased with their current pay rates and their lack of benefits. To appease this
group of stakeholders, we propose that we increase the amount that drivers receive
from fare trips by 12% and include a health care package for long term employees.

With a negative image displayed in the media, we allowed competitors to capitalize on

our losses. They were able to increase their own profitability, although we still possess
a majority of the market share. To gain back the market share that we recently lost,
we suggest increasing how aggressive our company deploys marketing strategies. We
will do this by implementing innovative promotional elements internally and externally
to improve our customer service while also creating company growth.

In past years, we have concentrated only on the metrics and growth of the company’s
valuation and did not give enough attention to the internal and external problems with
our customers and drivers. Due to this, our competition has taken an apparent
percentage of our market share by putting out a public image more aligned with public
opinion.

We as a company should take a step back to reevaluate our core values and determine
ways to get the customers back on our side. By focusing on our customer, driver and
competitor problems and inserting innovative suggestions, our company will establish
a strong culture which will furthermore improve our public image.
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Introduction
We have concluded that through improving customer and driver satisfaction, our
corporate culture will realign with public opinion. This will improve our overall public
image and allow us to regain lost market share from our competitors.

Situation
Uber is a technology company that provides convenience and efficiency for riders
across the globe. However, because of our rapid growth, we left stakeholders behind as
we became the face of innovation. Last year, a #DeleteUber campaign spiraled on
social media that negatively impacted our public brand and led us to lose a percentage
of our market share to our major competitors.

Although #DeleteUber peaked in 2017, its effect on our overall image is still very
prevalent today and has caused a loss of trust with our customers and drivers. This
campaign sheds a lot of light into our internal and external issues we face with our
stakeholders and gives us a tremendous opportunity to reinvent who we are as a
company.

We will provide recommendations that will target the values our employees and
customers expect, as well as target the declining market share we face. Our
recommendations will satisfy our customers’ needs for safety, meet our drivers need
for financial security, and reverse our declining market share for a more positive
outlook

Background
Regarding this issue, we used the #DeleteUber hashtag to find the disconnect that is
present between Uber and our three key stakeholders. Consumers and drivers believe
that our company does not value them and instead only cares about profitability and
growth metrics. This essentially allowed our competitors to capitalize from our failures
and increase their own market share in the taxi and limousine industry.
 Uber Technologies Inc. | 6

In addition, we utilized Twitter to sift through one hundred tweets of the public’s
perception and found that 86% of those who tweeted about Uber had a negative view,
while only 14% had something positive to say about the company. This data search
allowed us to see that these findings are recent and very relevant, making it a key
issue we need to focus on. We assessed that our customers have trust and safety
issues, our drivers have wage and benefits issues. All of which allowed our competitors
exploit our downfalls to maximize their own profitability.

Analyses
Customer Analysis
Customers expect Uber to get them from point A to be point B safely. With all the
allegations and scandals between riders and drivers, many customers are not feeling
safe anymore. The values our customers expect us to uphold are being challenged.
Data shows that companies who use values assessments during hiring are better off in
the long run due to less confusion among employee to customer relations. With that
being said, upholding our customer’s values is something we need to do. An increase
in customer retention rate by 5% can increase profits by anywhere between 25% to
95% (HBR, 2014).

Driver Analysis
By keeping our drivers happy, we keep our customers happy. Currently, our company
is struggling to retain drivers. Per year, there is only a 4% driver retention rate,
meaning that 96% of individuals that drive for Uber are no longer driving at the end of
a year period (Lomas, 2017). The main reason for this high turnover rate is the drivers’
negative attitude towards their pay and their lack of benefits. We publicize that Uber is
an easy way to make extra income, but we fail to promote the fact that there are a lot
of added expenses of being a driver. This makes obtaining a sustainable wage
unachievable. This leaves our drivers wanting higher wages and extra benefits, such
as healthcare plans.

Competitor Analysis
Our competitors used the #DeleteUber hashtag as an opportunity to gain market
share. This demonstrates the importance of our public image and how our perception
to stakeholders influences our competition. Lyft used goodwill marketing to catch the
eye of the public and has been supporting social issues that their customers’ values
align with. For example, Logan Green, the Chief Executive Officer of Lyft, tweeted that
they would be donating $1 million to the ACLU after immigration protests. This tweet
won over a significant portion of Uber users and solidified Lyft users’ positive beliefs in
the company. This is a tactic that Uber has failed to adopt, paying for it through a
decreasing market share percentage.
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Recommendation #1: Customers

Increasing Intensity of Background Checks
We are a transportation provider that has been lacking safety and security towards its
riders. There have been several incidents that have happened in the past that is still
relevant today. Customers have accused our drivers of sexually assaulting and
harassing passengers. For instance, last week there was a post on Twitter regarding a
female passenger accusing the driver of sexually assaulting her in Boynton Beach. The
tweet mentions “Uber’s background check works! Oh wait, never mind.” As you can
see, this a major issue for our company and customers.

Centralizing On Security Procedures

We need to focus on providing stronger safety and security standards towards our
riders. We believe if the company increases its intensity towards background checks, it
will increase riders’ safety and security. The current provider for background checks is
Checkr. We suggest incorporating values tests and a virtual interview.

Values Tests
Several companies such as Amazon, Google, Microsoft, and JP Morgan use values
tests on their employees. These companies believe it's essential to identify employee’s
standards to meet their culture needs. The value assessment has been determined to
be very successful for companies for instance an Australian Bank used the
assessment and rose its employee’s satisfaction to 36%.
It's extremely important for companies to understand their employees’ attitudes, ethics
and culture. According to Harvard Business (2014) review 84% companies that screen
values have better performance than those that screen for intelligence.

Process and Procedure

We will be using the Individual Values Assessment by Barrett Values Centre to
address this issue. The survey will be run by a CTT individual which we plan on
hiring. CTT stands Culture Transformation Tools which is a professional in finding the
right employees to satisfy companies culture. The test is very easy to conduct it’s an
online survey with a list of 100 values such as goals orientation, safety and trust. The
survey can be customized to meet company’s expectations. The decisions are made by
the CTT management team to ensure that its employees follow through with Ubers
requirements. Doing so will help us find the right employees to serve our customers
and will allow us to gain back our customer trust by ensuring safety.
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Virtual Interview
In finding the right employees for our ride services, it would be valuable for us as a
company to conduct interviews. A virtual interview is a great way to determine if
someone meets the expectations not only on paper, but also in person. According to
Mercer (2014) cost of having a bad hire can result a loss 1.4 times employee’s annual
salary. The importance of interviews helps prevent high turnover and increase
probability of hiring the best candidates. The interview will be run by of CTT
Management team. This will not only benefit the company in finding the right fit, but
also form a stronger relationship between contractors and managers. By performing
this process, we will be able to detract the negative consumer views towards our
drivers and secure our customers trust.

Outcome of Implementation
With this new platform and security measurements it will provide the best safety and
security towards our customers. We will gain a better understanding of driver’s
behaviors and values while matching them to fit our expectations for our drivers.
These implementations will help us regain our customer trust and eventually grow
loyalty, but ultimately help us regain its public image.

What Is the Cost

Uber will be hiring 28 specific managers to run the individual value assessment and
conduct virtual interviews. Which will cost $980,000 in hiring the managers and 210
million for implementing the value test.

Recommendation #2: Drivers

Benefits and Increased Pay
Many Uber driver forums, such as Reddit.com and uberpeople.net, have expressed
that the benefits associated with driving no longer outweigh the costs. Some of these
added costs include any vehicle depreciation expenses, the cost of gas, and any
damages to their cars. The following image was taken from uberpeople.net and further
explains many of the added costs he incurred before even driving for our company.

After reading through many of these different forum sites, we have come to the
conclusion that many of the drivers are frustrated with their treatment by our
 Uber Technologies Inc. | 9

company. An effective way to alleviate this group of stakeholders is to implement new

pay rates and provide benefits and rewards for our loyal drivers.

Implementing New Pay Rates for Drivers

To improve our retention rate, we should restructure the price we charge our riders
and the amount that we take from our drivers. Many drivers have expressed their
anger about how we have lowered fare prices for riders, while keeping the percentage
we take from drivers constant. This change has drastically lowered the amount the
driver’s make and has begun to negatively affect their financial status.

For example, in 2017, ex CEO Travis Kalanick took an Uber ride in San Francisco with
a driver by the name of Fawzi Kamel. During this ride, Kamel and Kalanick got into a
heated argument over the fact that we recently lowered our prices. Kamel disclosed
that he lost $97,000 driving for Uber and that he “is bankrupt because of [him]”
(Krisher 2017). In response to this, Kalanick evaded the fact that they lowered prices
and instead publicly stated, “some people don’t like to take responsibility for their own
shit. They blame everything in their life on somebody else” (Bhuiyan 2017).

After this interaction, it immediately went viral and brought up significant backlash
from the media and the Uber drivers. Many drivers lost respect for our company, and
since then we have yet to fully address this consistent issue. In order to reach out and
gain back their trust, we propose that at the beginning of this year’s second quarter,
we increase the pay for drivers. We plan to do so through increasing their fare price by
12%, which will go to the drivers. We reached this 12% number through figuring out
that any number above 12% exhibited a diminished marginal rate of return and
anything below was not a significant enough amount to appease the drivers.

To promote this future change, we will send a detailed email to our Uber drivers. The
email will include an explanation of this pay increase and a note of appreciation for
their work and dedication for the company. This in turn will have little to no impact on
our overall profitability and will also appease the drivers and help maintain employee
longevity.

Providing Benefits and Rewards for Loyal Drivers

Since our beginning in 2009, we have considered our drivers as independent
contractors, rather than as employees of Uber. Legally, an independent contractor is
not entitled to receive any employee benefits. Due to the recent pay cuts, Uber drivers
have been working extreme hours just to provide for themselves and or families.

Drivers have reported these extreme hours and minimal compensation throughout
various social media platforms. For example, a women expressed "with Uber and Lyft,
driving 37,000 miles in 2014, after all my expenses (vehicle financing, fueling,
insuring and maintaining) I earn $2.64 an hour and have no health-care coverage if
injured" (2016).

These reports have led to a class action lawsuit against us, claiming that our drivers
are not being treated fairly. States such as California, Massachusetts and New York
have stated ruled that it is unlawful labor practices to let these individuals make a
profit for Uber, while receiving little to nothing in return. To alleviate this situation, we
 Uber Technologies Inc. | 10

can begin implementing different benefit programs for our loyal employees. We plan to
implement this at the beginning of the second quarter.

Outcome of Implementation
One change we should make is to provide health insurance for our drivers. Although
this may be expensive for our company to implement, the cost of providing health
insurance for loyal drivers will be significantly less than the cost of losing the class
action lawsuit.

Since our retention rate for drivers is so low, we could provide this perk only to the
drivers that have been with the company longer than six months. Our drivers feel that
they are not an asset to our company, so our goal is to appease the angered Uber
drivers, while also decreasing the turnover rate. We believe that providing these
benefits will be a step in the right direction for both the company and the drivers.

Recommendation #3: Competition

Implementing Charitable Promotions
Our company's charitable efforts have always been performed on a periodic basis.
Each year, we partner up with nonprofits, social enterprises and education
institutions to support causes that align with our company’s core values. However, the
goodwill of these partnerships has never been highlighted to capture the public’s
attention.

By inserting an in-app 10 for 10 system that guarantees a $10 donation every 10 rides
a customer takes, a sense of consistent goodwill that is currently absent will be
created. The cause to which these donations will go toward will change monthly and
will not only help in improving our public image but will also create a reason for our
customers to stay loyal to our brand.

Expanding Into Competitors’ Markets

Our competition has capitalized from the negative publicity in 2017, taking a
substantial portion of the market share that was previously dominated by Uber. In
order to regain lost market share, we are suggesting increasing the amount of positive
promotional campaigns within our competitions primary markets. By running
promotions that hone in on our company’s community properties and the positive
affects Uber has had on drinking and driving, we believe that we can regain the trust
of the public.
 Uber Technologies Inc. | 11

These promotional campaigns will utilize platforms such as, locally targeted Facebook,
billboard, and franchise advertisement. They will pinpoint target areas such as
California, New York, Florida and Illinois, markets where we lost relatively high
percentages of our market shares to Lyft and the Taxi industry.

Unique Partner Opportunities

With our customers, we are seeing a trend with the younger generations, as they are
increasingly using the app to carpool between 9pm and 2am. We view this window of
time as an opportunity and to utilize it, suggest forming partnership with prominent
companies in the food industry.

Creating these partnerships will allow us to implement a new in-app feature, giving
our customers the option to opt into a drive thru experience. They will be beneficial for
both parties involved and will be generating more income for our drivers while
improving customer satisfaction. These partnerships will create a more welcoming and
friendly customer environment, establishing a more trustworthy relationship between
our drivers and the riders.

Outcome of Implementation
With a combative landscape, where our competition is steadily gaining ground, we
need to reevaluate our strategy for moving forward in order to bounce back from our
recent downfalls. By installing a marketing plan that is molded around goodwill, our
company will both attract a new customer base and gain back 5% of market share
which we lost to the ride-hailing and the taxi-limousine industry. These promotions
will put out a positive image of a company that is focused on the people while still
allowing us to continue to experience company growth.

Response
We have come up with three recommendations that will satisfy our three key
stakeholders which will improve our public image. Within the Appendix you will find a
timeline of each step and a budget for each stakeholder group. We will reassess these
recommendations in a years’ time and measure the success of them then. By using
our customer and driver retention rates as guidelines, we will assess if they are
 Uber Technologies Inc. | 12

growing at the end of this one year’s time. This is how we will ultimately determine the
effects of our recommendations.

Ensuring Safety Increases ROI

To ensure that all our drivers are committed to the same values we are, we are
implementing hiring managers to oversee the values assessments and background
checks. Hiring 28 managers to oversee the values assessments and virtual interviews
is the lowest cost we will incur. By beginning this within our company, this lets our
customers know that we are committed to safety. The outlined budget for the process
is below.

Customers Per Year in US

Hiring Managers Salary $980,000

Expense

Barrett Values 2018 Projected Values

Centre Assessment

Values Assessment Expense $210,000,000 $210,000,000

The only drawback of this is that we would spend around $420 million in two years
assessing the current drivers along with the new ones we project in 2018. Thereafter,
we would only test drivers the first time they are being hired. Even though this is a
large investment, this is the most important cost we incur and will provide a positive
ROI in the long run. Our customers need their values met in order for them to keep
using Uber, with this assessment they are ensured that current and future Uber
drivers have the same values as them.

Satisfying Drivers Increases ROI

Aside from satisfying customers, this will be the second biggest expense we will incur
per year. With our proposal of a 12% driver wage increase, we will be giving back
millions of dollars to the drivers. Since finding this year’s statistics on the average
driver wage and how many drivers there currently are with Uber was not successful,
we must go back to 2015 to attain factual figures for each. This limits us to not having
hard numbers for 2017, but leaves us numbers that we can inflate to give an estimate
for the future.

Drivers

*Wage Expense with 12% Wage Total for NY Total for LA Total for SF
Increase
 Uber Technologies Inc. | 13

50% of Drivers $8,927,100 $4,978,575 $6,916,050

19% of Drivers $7,915,362 $4,414,336.50 $6,132,231

30% of Drivers $9,224,670 $5,144,528 $7,146,585

*Based off 2015 Statistics

*Benefits Package Expense Per Year in

US

$10,920,000 *Based off 2017 1m Driver

Estimate

Using the estimate that there are around 1 million Uber drivers in the US by the end
of 2017, these costs would jump up significantly. For example, using the year end
2017 estimate of Uber drivers, an overall 12% increase in pay would result in $27
million more being paid out to only 50% of drivers.

This would decrease our bottom line while increasing our driver satisfaction. Along
with wage increase, benefits would only total around $11 million per year. With the
size of Uber, we can take these financial hits which will increase our driver retention
rate. In the short run the ROI on these two recommendations is negative, but in the
long run we are hopeful that this will turn into greater profits.

Learning from Our Competition Increases ROI

Our competitors have gained significant market share due to our negative media
attention. The way they capitalized off of this is something Uber could use to gain back
the lost market. With the way society is becoming more involved with social issues,
Uber must take advantage of this the way Lyft did. We know that our customers look
for ethics and morals in companies more than ever now. Outlined below is the
promotion and advertising costs that we expect to incur this year as we implement
goodwill marketing.

Competitors Per Day in US

* Virtual Promotion $550,000

**Expanding Into Competitors Markets Per Year in US

15% Increase in Drivers $165,984,000

**Advertisement Per Year in US

Facebook $192,000

Billboards $7,200,000
 Uber Technologies Inc. | 14

Sports Franchise $1,125,000

* Based off 2016 Statistics **Based off 2017 Statistics

We expect this to return the lowest ROI out of the three recommendations we have
stated. The use of marketing is effective for every organization, unfortunately Uber
relies heavily on word-of-mouth marketing. While these external advertisements and
promotions will increase our brand awareness, our ultimate goal is being in the good
graces of our customers and drivers that can bring in more users and drivers.

Conclusion
In past years, we have concentrated only on the metrics and growth of the company’s
valuation, not giving enough attention to the internal and external problems with our
customers and drivers. Due to this, our competition has taken an apparent percentage
of our market share by putting out a public image more aligned with public opinion.
We as a company should take a step backward to reassess our core values and
determine ways to get the customers back on our side. We believe that by focusing on
our customer, driver and competitor problems and inserting innovative suggestions,
our company will establish a strong culture which will furthermore improve our public
image.
 Uber Technologies Inc. | 15

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 Uber Technologies Inc. | 16

Shewan, D. (2017, December 11). 7 of the best value proposition models we’ve
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 Uber Technologies Inc. | 17

Appendices

Appendix A: Budget for Recommendations

 Uber Technologies Inc. | 18

Appendix B: Advertisement Budget Analysis

Appendix C: Implementation Timeline