Navigating the Crisis Environment: an Analysis of Uber's Communication

Running head: NAVIGATING THE CRISIS ENVIRONMENT 1 Navigating the Crisis Environment: An Analysis of Uber’s Communication Strategies Cristina Dypiangco Cal State Polytechnic University, Pomona NAVIGATING THE CRISIS ENVIRONMENT 2 Abstract With the rise of the sharing economy, startup companies are revolutionizing how corporate communication messages are implemented. Organizations are now expected to take corporate social responsibility seriously by creating policies and programs that demonstrate their concern to stakeholders. This study provides an analysis of Uber’s communication messages from their Newsroom articles and official press releases to discover how this company navigates various crisis situations. Additionally, it examines how Uber’s innovative culture impacts their responses. A total of 203 Uber Newsroom articles and nine official press releases issued between October 2014 and October 2016 were analyzed to explore the types of communication messages and responses the company displayed and whether a pattern of communication existed. First, I created a timeline of Uber’s potential crises and organized the events by crisis type. Then, I categorized all of the company’s Newsroom articles and press releases. Some of the popular categories included lifestyle, partnerships, and new beginnings. Subsequently, I compared Uber’s crisis situations with communication messages they released before and after the crisis to better understand the company’s response strategies. This study provides insight on how Uber breaks the rules of standard corporate communication by responding to crises in unconventional ways. More specifically, Uber responds to crises indirectly by describing current partnerships and lifestyle activities they implement in hopes of fostering relationships and improving their reputation with stakeholders. NAVIGATING THE CRISIS ENVIRONMENT 3 Navigating the Crisis Environment: An Analysis of Uber’s Communication Strategies Literature Review According to Coombs (2007) a crisis is a sudden and unexpected event that impacts an organization and its stakeholders potentially influencing public safety, financial loss, and reputational loss. Because a company's reputation influences how stakeholders perceive the company’s credibility, crises have the ability to increase reputational threat. Fombrun and van Riel (2004) detail how organizations have “reputational capital” where companies with a surplus or stockpile of reputational capital are better equipped to handle a crisis with minimal losses than organizations who already have a limited amount available; therefore, these organizations will have a more difficult time restoring their reputation and resuming operations (as cited in Coombs, 2007, p. 164). Crisis management is the process of how organizations combat crises and mitigate the damage that occurs (Coombs, 2007). There are certain ethical responsibilities and validated accepted wisdom organizations are recommended to follow to successfully handle crisis situations. For example, it is suggested that organizations focus first on protecting stakeholders from physical and psychological harm before implementing response strategies to protect their reputation (Coombs, 2007). This includes providing stakeholders with instructing information on how to protect themselves physically from a crisis. Additionally, organizations can provide adjusting information or the care response to help stakeholders understand what happened during the crisis reassuring them that corrective action is taking place. Subsequently, post-crisis communication is implemented to restore an organization’s credibility, and it is important for a crisis response to be quick, consistent, and open. For example, a crisis management team (CMT) should release a statement during the golden hour so that an organization can get ahead of the crisis by telling their story first (Coombs, 2014b). Also, organizations should be available to the media and willing to disclose as NAVIGATING THE CRISIS ENVIRONMENT 4 much information about the crisis to reduce stakeholders’ concerns. Similarly, spokespeople should avoid saying “no comment” because this passive response may encourage stakeholders to believe that the organization is guilty. Image Repair Theory (IRT) and Situational Crisis Communication Theory (SCCT) are two theories that are often used to explain how crisis managers can respond to crisis situations while improving their reputation. Reputation repair strategies vary along a continuum to the extent that they accommodate victims, so depending on the crisis, organizations take varied levels of responsibility. William Benoit (1995) created IRT which focuses on repairing an organization’s reputation after stakeholders perceive an organization is responsible for negative action (Coombs, 2014a). An important goal of corporate communication is to protect an organization’s reputation so response strategies are implemented to defend and repair an organization’s reputation. The five image repair strategies are denial, evading responsibility, reducing offensiveness, corrective action, and mortification. It is recommended that organizations admit guilt when known, deny if innocent, shift blame, prove lack of control, and report corrective action (Coombs, 2014a). On the other hand, Coombs (2007) elaborates how attribution theory successfully links together SCCT by describing how people make judgements about the causes of events by attributing causes to internal and external factors. Additionally, this is more likely to occur when individuals and organizations are presented with negative situations such as crises. SCCT is important in not only guiding stakeholders on how to protect their organization, but also in remaining proactive in preventing future crises (Coombs, 2007). Initial crisis responsibility, crisis history, and prior reputation influence an organization’s reputational threat. Framing impacts how individuals perceive certain situations. Additionally, there are three crisis types that vary in organizational responsibility, categorized as victim, accidental, and preventable. Specific NAVIGATING THE CRISIS ENVIRONMENT 5 crisis response strategies correspond with each crisis type, and the effectiveness of each strategy depends on the crisis at hand; however, organizations should remember that strategies that assume more accountability and are more accommodative tend to be more costly for an organization. Uber Technologies Inc. In June 2010, Travis Kalanick and Garrett Camp launched the ridesharing app, Uber, and today Uber Technologies Inc. operates in over 58 countries and is valued at more than $50 billion (McAlone, 2015). Uber was established when Kalanick and Camp wanted to find a way to lower black car services, and Uber provides a taxi alternative allowing customers to simply tap a button to receive a ride (Chokkattu & Crook, 2014). Although Uber has battled rivals and regulators since its inception, this organization has successfully disrupted the market by using “technology to give people what they want” from rides to food delivery while offering a individuals a flexible way to earn money (Our Story, n.d, p. 2). Background of Uber Crises Since its creation, Uber has been involved in a variety of crises involving passenger safety, driver treatment, competition with other agencies, legal and regulatory issues, and sexist comments/ads which affects their reputation and foreshadows how they handle crisis situations. Some of Uber’s scandals stem from negligently hiring drivers and Uber’s ultra-competitive culture itself. Travis Kalanick, co-founder and CEO of Uber Technologies, has played a significant role in influencing his organization’s culture creating a risk taking environment that encourages unconventional responses. For example, Kalanick compared women to businesses that you can sell at any time and refused to take responsibility when a passenger was choked by an Uber driver. He responded to this incident by informing his public relations team to “make NAVIGATING THE CRISIS ENVIRONMENT 6 sure these writers don't come away thinking we are responsible when these things do go bad…" (Tiku, 2013 p. 10). Similarly, this mindset has trickled down to other high level executives and marketing content. For example, Uber’s Senior Vice President, Emil Michael, suggested how a million dollars could be well spent in hiring opposition researchers and journalists to dig up dirt on members of the press such as Sarah Lacy, editor of PandoDaily, who accused Uber of “sexism and misogyny” (Smith, 2014). Additionally, Uber has consistently denied reports of sexism within their organization despite implementing promotional materials that suggest otherwise. For example, a French Uber office released a new promotion on the app “Avions de chasse,” slang for fighter jets, which paired riders with “hot chick” drivers. This promotion was quickly removed; however, the Avions de chasse website includes a variety of content that objectifies women (Warzel, 2014). Additionally, one of the more prominent cases of negligence was when six-year-old pedestrian, Sofia Liu, was killed in a car crash on December 31, 2013 in San Francisco after Syed Muzaffar, 57, failed to yield to her family at a crosswalk. Liu’s family sued Muzaffar and Uber alleging that Muzaffar used the UberX app during the time of the crash. However, attorneys described how Uber was not liable for Liu’s death because Muzaffar was an independent contractor and “had no reason to be actively engaged with the app at

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