Uber's Makeover

Ride-hailing app Uber reworks its image in Germany

Man ordering a ride in Poland
If only Uber could appear in Germany the way its cars appear from the app. Source: Uber

Uber has an international image problem and fixing it in Germany, a country whose citizens values their privacy to such a high degree, might be harder than the company thinks. The ride-hailing service app company’s data breach in 2016, which led to private data being stolen from 57 million customers wordwide, and their attempted cover up did little to boost their reputation.

While the head of Uber’s Europe division Pierre-Dimitri Gore-Cotry did not disclose how many Europeans, or Germans, were affected by the hack in an interview with Handelsblatt, he thinks the company’s change in management – CEO Dara Khosrowshahi replacing Travis Kalanick – and a shift in values will make all the difference in appealing to overseas customers.

“We want to move from a phase of rapid growth to a phase of responsible growth,” Mr. Gore-Coty told Handelsblatt. One effort to appeal to the eco-friendly Germans is by introducing UberGREEN to Munich’s streets in 2018, which connects riders with electric cars. Solutions similar to UberGREEN will help reduce air pollution and severe congestion in highly-populated cities, Mr. Gore-Coty claims.

But not everyone is interested in the new and improved Uber. In September, London’s transport authority issued a huge blow when they declined to extend Uber’s city license saying drivers’ needs are neglected. With half of Uber’s turnover generated overseas, Great Britain and France are two of the company’s most important markets. The company is currently negotiating with regulators to get its license back.

“Germany still has laws and regulations that date back to the 1960s.”

Pierre-Dimitri Gore-Cotry, Uber’s head of Europe, the Middle East and Africa

When it comes to Germany, things are even trickier: Governmental red tape and the taxi lobby’s legal action against the company after it first launched led to Uber quickly retreating from Hamburg, Frankfurt and Düsseldorf.

Today the company operates related-services through UberX, Uber-Black and Uber-Taxi in Munich and Berlin, but these services are growing more slowly than predicted. “It is not a problem of demand,” Mr. Gore-Coty says: More than 400,000 people have downloaded the app in Frankfurt even though no service is available. According to the Europe head, the real problem is two-fold: a shortage of qualified drivers due to the difficulty of obtaining licenses in Germany. Although the German government shared plans to create a clearer legal framework for businesses in the sharing economy, no concrete changes have been announced.

“We agree with the objectives of the German regulations,” Mr. Gore-Coty says. “But Germany still has laws and regulations that date back to the 1960s.” The government, he says, needs to take today’s “technical conditions” into account. And these changes, without a doubt, would be of interest to many mobility service providers trying to break into the German market. Similar to Uber, local competitors, like German start-ups Door2door and Wundercar, are embracing mobility trends that provide alternatives to car ownership, and remain throttled by red tape.

But no one is ready to give up on the market: Setting up in Germany holds appeal thanks to the country’s powerful automakers, like BMW, Daimler and Volkswagen. And Uber is hoping to pair up with one or two, like they did with Volvo, to find ways of using their self-driving cars and other vehicles to “complement” the company’s ambitions.

Overall, Uber’s new marketing makeover seems to focus heavily on improving urban mobility. The scandal-hit company also announced they are joining the international association of public transportation (UITP) to better align their interests with public transport authorities worldwide. Plus, Mr. Gore-Coty thinks Uber Pool, a cheaper car pooling option offered in London and Paris, could alleviate traffic congestion and provide Germany’s public transportation a bit of relief. Not a bad strategy for a company that had a less than ideal entrance into the German market and could use face time with local regulators.

Grischa Brower-Rabinowitsch and Markus Fasse reported this story for Handelsblatt. Christine Coester adapted it for Handelsblatt Global. To contact the authors: brower@handelsblatt.com, fasse@handelsblatt.com.

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