An alternative interpretation of Uber’s rebranding

Here is a German version of this article.

Uber

When Uber two weeks ago presented its new branding, the company’s CEO Travis Kalanick explained the changes and elimination of the widely recognized “U” icon with the company’s evolution from being “everyone’s private driver” to becoming a transportation network; one not only for moving people, but also for food, goods, and “soon maybe much more”. It’s a reasonable explanation supported by marketing theory – an evolving company might need a rebranding to update and upgrade its perception among the public.

However, there is another possible interpretation of the move and the departure from the iconic design elements that people around the world would recognize: By giving up on the branding that everyone associates with Uber’s – in many parts of the world controversial – people transportation services, the company might try to change the narrative. It does not want to be seen anymore as the company fighting to out-compete the taxi incumbents and being embroiled in legal battles all around the world. Because this turned out to be extremely challenging. Applying the successful US-strategy of aggressive, ethically questionable and rule-breaking behavior has not led to the same success in many other markets. There Uber often plays the role of an obscure (and often illegal) niche player. Europe is just one example.

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Generally, succeeding with building a worldwide network of niche on-demand transportation options for people within a few years is nothing but a remarkable success. But not for Uber. Uber is special. With a total funding of staggering $10.41 billion and a valuation of $62.5 billion, Uber cannot settle for the niche. Uber needs market domination, in all important and large markets of this planet. Clearly, when it comes to driving people around, that won’t be happening for the foreseeable future. Because what Uber is attempting to do is harder than hard.

To illustrate this point, here is a list of factors that impact whether Uber can properly expand its on-demand people transportation business. The more of these aspects apply, the better for the company’s prospects. The less, the worse the chances.

  • Existence of an inadequate taxi market (too expensive, lack of supply, lack of apps, occurrences of scamming, lack of comfort and amenities, unreliability, language barriers etc.)
  • Absence of an aggressive taxi lobby which puts obstacles in Uber’s way as much as possible
  • Lack of alternative means of public transport (the less alternatives to getting an Uber, the better for Uber)
  • Absence of a young competitor which ends up dominating the market (see China)
  • Existence of dense urban areas
  • Availability of people who would be willing to drive for Uber rather than earning money in other ways
  • Positive public perception of the Uber brand
  • Trust of drivers in Uber (that they are being paid, that they won’t end up in prison)
  • Trust of potential passengers in Uber’s cars and drivers
  • The right political environment (can sometimes be influenced through lobbying, but tough)
  • The right legal environment (= Uber’s services not being illegal)
  • A reliable technical and logistical infrastructure (mobile coverage, smartphone penetration, payment providers, traffic situation, general safety, accessibility (of roads, addresses))
  • Absence of specific cultural norms which would be obstacles to Uber’s operations

The more of these factors don’t apply, the harder it is for Uber to put a dent into a country’s transportation market.

Considering these circumstances, one does not need to be a skeptic to acknowledge that even an insanely expansive and driven company like Uber will, for the time being, struggle in many countries. Often, Uber is at best condemned to be one transportation option among many others. Although with more urban-chique and a popularity among cosmopolitans and the upper class, but not with the kind of large-scale impact on the general transportation market which Uber’s mission and strategic goals require.

With that in mind, turning Uber as fast as possible into the international transportation network for everything would give the company the opportunity to continue its dynamic growth story and to increase the metrics which everybody with a financial interest in the company finds important. And it would take some pressure off of Uber to win in the people transportation market.

So the rebranding could be seen as a an offensive move but also as a defensive move. In the end, it might be both.

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