Early last week on Tuesday, the Better Business Bureau awarded the ride sharing service Uber with a failing grade as a result of surge-pricing and the company’s lack of response to the dilemma. Since then, it has spurred a wide controversy as to why the service did not become accredited. In June, Uber declared that they had raised over a billion dollars in primary capital and had been evaluated to be worth 17 times that. While debate has ensued as to whether or not Uber is actually worth nearly 18 billion dollars, it did come as a surprise that the startup could not muster higher than an F rating with the Better Business Bureau.
At first glance, it was believed that Uber received the poor ranking from the Better Business Bureau because of the controversy surrounding their price-surging system. Basically, Uber implemented and enforces the policy which patrons have found increasingly frustrating. The quoted rates for travel are increased dramatically during times of potentially heavy traffic such as holidays. The surge in rates multiplies the overall charge. Uber claims that the practice is valid because it helps keep cars on the road during busy times and will eventually level out prices entirely once even more cars sign up to give people rides. The company also claims that there is a level of transparency to the price-surges and riders will be made abundantly aware that the practice is in effect, sometimes even having to agree to the multiplied rates before riding.
Despite the immediate response that the Better Business Bureau awarded Uber with a failing grade as a result of the surges, that may not necessarily be the case, though it may have contributed to it. A great deal of all of the negative rankings on the Bureau’s website relate to billing and pricing issues, many of which directly correlate with price-surges. The bad rating, however, resulted from Uber’s inability to properly respond to complaints and close them out. This is largely why Uber was not accredited, even though the practices perceived as dicey as of late probably did not help.
The Better Business Bureau outlines on their website a long and detailed list on how to obtain and maintain accredited status with them. It specifically outlines that businesses must be transparent, honorable, and responsive to their customers. That is where Uber got bogged down because they were not timely or even responsive to many of the complaints against them. The Bureau requests that businesses promptly respond to all claims made against them. The outline also mentions that all businesses should be entirely open to resolving problems that are occurring as a result of a pattern, which would clearly be the case for Uber.
The Better Business Bureau’s award of a failing grade to Uber may or may not prove a detriment to the startup. For years, the internet has been in wide debate as to the validity of a BBB accreditation, often accusing the Bureau of being an unfair business in itself by assessing fees to different aspects of being accredited. In any case, the mark of trust that they apply to any business is nationally recognized by consumers and will likely affect Uber in its early stages of expansion.
By Brett Stewart