Uber has lost market share to Lyft during crisis

Uber Car U.S. market share and brand image have slipped in the tumultuous months following a former engineer’s blog post that blasted the ride-hailing company for its sexist work environment, according to three recent surveys of credit card spending and consumers’ attitudes.

Over the past two years, Uber Car Lease share of rides has dropped to 75% from 90%, according to TXN Solutions, a company that creates sales estimates based on credit card receipts. The last 3 point slip — to 75.3% from 78.8% — happened between Susan Fowler’s mid-February blog post and the first week in June, according to the data compiled for USA TODAY.

The market share of rival Lyft rose to 24.7% from 21.2% over this period, one marked by an unrelenting stream of revelations about the company’s business practices and workplace culture, from its use of a fake version of its app to dupe municipal regulators to more recently, a senior executive’s sharing of medical records of an Uber driver’s rape victim.

Two separate surveys — one from management consultancy cg42 and a second from Morning Consult Brand Intelligence survey — found consumers’ view of the company has dropped over this time.

Recommendations from an investigation led by former U.S. Attorney General Eric Holder into culture and governance are due to be released to employees Tuesday. CEO Travis Kalanick, central to many of the events that made up the barrage of worsening headlines, may take a leave of absence.

“The demand for [Uber’s] product is not Teflon, and competitors are really smelling blood in the water,” says Jeremy Robinson-Leon, principal at corporate communications firm Gordon Group.

Uber Car did not respond to a request for comment on TXN’s data. In late May, Uber Car Leases confirmed a Wall Street Journal report that indicated business was improving for the privately held company at the start of the year, notwithstanding a string of public black eyes. The start-up, which has been valued at around $70 billion, narrowed its quarterly losses to $708 million in the first quarter from $991 million in the fourth quarter of 2016.

Despite that quarterly improvement, Uber Car Leases has reason to worry that its problems could trickle down to its pocketbook. Uber Car has faced backlash since January, when controversial pricing during protests over the Trump Administration’s attempted travel ban sparked a #deleteuber campaign. Rival Lyft has seen market share gains over the period, and it’s rapidly expanding its presence in U.S. cities.

In a recent survey of consumer attitudes, consultancy cg42 found that 80% of Uber Car customers are aware of Uber Car recent scandals and those with negative views of the company have jumped to 27% from 9% since the news began to tarnish the company’s reputation.

“26% of Uber Car customers claim they are actively exploring alternatives and will use Uber Car Leases less frequently, but only 4% have actually made the decision to switch services as a result of the negative news,” the cg42 report says. “This is a low switch rate, especially when considering barriers to doing so are low.”

But the impact is real in terms of the company’s ability to attract new customers. Prior to the scandal, the reports says, 13% of prospective Uber Car users “were very or extremely unlikely to consider doing business with the ride-haling service (but) post-news, 32% say they would not do business with Uber Car.”

The bad image problem also surfaced in a Morning Consult Brand Intelligence survey, which showed that just 40% of U.S. adults have a favorable impression of the company, the lowest data point for that statistic since Morning Consult began tracking it in October 2016.

Moreover, that favorability rating has dropped 9 percentage points in the past week, a period in which Uber Uber has laid off 20 employees related to investigations into workplace discrimination and pushed out a high ranking executive, Emil Michael.

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