The CSR Newsletters are a freely-available resource generated as a dynamic complement to the textbook, Strategic Corporate Social Responsibility: Sustainable Value Creation.

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Monday, August 28, 2017

Strategic CSR - Uber

From a CSR perspective, there are not many firms that have had a worse year than Uber. Just to mention a few 'highlights' – there was the #deleteUber campaign; the CEO caught on a dashcam screaming obscenities at one of Uber's drivers; the CEO bowing to public pressure to leave the President's advisory council; the exposure of the firm's sexist culture; the forced resignation of the CEO; and the very public boardroom battle to replace him (resolved, at last, earlier today). I might have missed some things. In short, it has been a bad year. In spite of that, as the article in the url below notes, the company is thriving:
"Uber has spent the past eight months reeling from a series of corporate scandals. Yet those have done little to deter people from hailing an Uber for rides. That became clear on Wednesday, when the ride-hailing company shared its latest financials with investors. According to the disclosures, Uber's gross bookings continued to increase in the second quarter, while its losses narrowed. Trip requests from riders also more than doubled over the past year."
If we are to believe the business case for CSR, it is hard to know where that leaves us. While Uber is still far from profitable and in spite of all its transgressions, it's performance has improved significantly throughout 2017. Specifically:
"In the second quarter, Uber's gross bookings rose to $8.7 billion, up 17 percent from the previous quarter. Uber's adjusted net revenue — or the amount of money earned after paying out its drivers — jumped to $1.75 billion from $1.5 billion over the same period. Ride requests increased 150 percent from a year ago, though Uber did not disclose the number of rides requested."
A key part of the framework underpinning Strategic CSR is the idea that firms survive and thrive by creating value for their collective set of stakeholders. If stakeholders do not care how a firm creates and delivers its product (and who it abuses along the way), but only care that the product satisfies their immediate needs, then we will get companies like Uber. In contrast, if stakeholders care about the way a firm conducts itself and seek to reward that behavior, then we will get others kinds of firms with different priorities. Either way, Uber is not the problem here – the firm's set of stakeholders (including its customers) have built a company that reflects their collective interests. If you continue to reward Uber with your loyalty in light of the problems that have been exposed this year (especially as there is a very effective, more socially-responsible competitor in Lyft), then how can we expect the company ever to change its business model? Especially when that model has worked for it so far (and continues to do so).
Take care
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Uber, Mired in Scandals, Sees Uptick in Bookings
By Mike Isaac and Tiffany Hsu
August 24, 2017
The New York Times
Late Edition – Final