One of our primary goals at Abbey Research is to offer our expertise to businesses and non-profits who are seeking to build or grow a successful model. Our particular case study today is the ride-sharing company Uber. It seems a week does not pass without Uber’s involvement in another law suit over their company’s policies, technology, or employee behavior. From copyright infringement to sexual harassment, they are fighting legal battles on multiple fronts.
What does this continuing legal battle say about their business model? Do these ethical or legal issues effect their bottom line? In a recent report from CBS News, Wired’s editor-in-chief Nicolas Thompson argued that Uber’s success in monopolizing the market of ride-sharing by moving quickly and addressing legal issues later has only increased their value. Had they moved slower into the market and followed the law, he noted, they might not be worth the estimated $50+ billion dollars.
It certainly seems a risky game to play, but one that has (right now) paid off for the company. We here at Abbey would argue that conducting an ethically grounded and legal business far outweighs the potential gains from moving quickly without proper research. There are many who are arguing that Uber’s brand continues to decline in value with each new scandal, but has this value impacted usage? We have yet to see a considerable decline in Uber’s effectiveness, perhaps because they have managed to monopolize the market.
Until a viable alternative can compete, Uber’s high-tech, easy-access, low-cost service will continue to thrive. At the end of the day, it would appear that the concerns of the pocketbook outweigh the concerns of the heart and mind. However, some business journalists have argued that the ultimate lesson “from Uber’s rapid rise and current legal troubles is that there’s a price for conducting business at any cost.”
Whether Uber’s legal woes do enough damage to impact their market value remains to be seen, but here at Abbey we are always concerned with balancing business ethics with commercial success.