The word “disruption” has been thrown around in the tech industry rather nonchalantly over the past few years. The dictionary defines it as: “a disturbance or problems that interrupt an event, activity, or process.” And one company that has come up time and time again as the epitome of this phenomenon is Uber, the private car service that has Silicon Valley in a tizzy.
Since its inception, the company’s CEO Travis Kalanick has publicly said the existing taxi industry is corrupt and there was a perception that Uber was the white knight sent to provide the community with better transit options when they wanted it. This shared economy utopia started off great, but as the company grew, it encountered multiple issues that is shattering this vision and is giving rise to utter chaos and anarchy.
This week alone has certainly been a public relations nightmare for Uber. Buzzfeed reports that a company executive sought to engage in opposition research against reporters who were overly critical about it, followed by allegations that its New York City General Manager Josh Mohrer spied on customers without their consent. And now Congress is showing an interest in Uber as U.S. Senator Al Franken from Minnesota has requested answers from Kalanick.
And that’s not all of it. But we’ll get to that in a bit.
What kind of Uber do we want?
It was in May 2010 when I was first introduced to the company that would eventually become known as Uber. It was at a San Francisco App Show event and its Head of Global Operations, Ryan Graves, was on stage talking about it. There was an idea about Ubercab (as it was known then) and the company put it thusly:
“The reality is that walking to the curb and waiting is a terrible way to get a car. Not only is it super frustrating, it’s a terribly inefficient use of your time. <insert UberCab> Now a service exists that is an incredibly efficient use of your time…
Forget about walking to the street to look for a cab anymore. Now, like the European Diplomat, you just make that request from the comfort of your home, office, gym, hotel lobby, whatever… There are cars doing nothing but waiting for your request.”
Sounds like a great idea, right? And it turned out great for the most part. In cities where I’ve been repeatedly shrugged off by taxi cabs who refused to accept my fare in exchange for a ride home, having Uber appeared to be a blessing. Having a non-judgmental car service was pretty awesome. It gave rise to people that there was a way to break free from the incumbent car services. You know that scene from Braveheart where Mel Gibson gives an impassioned speech to the Scottish warriors to fight for their freedom? Yeah, that’s what the community felt like and Uber did a pretty decent job of galvanizing the crowd to support it.
But yet, there’s something disturbing about the way Uber runs its business. This is the part where we talk about the various controversies that have come about in the company’s nearly five years of existence. It’s faced lawsuits and cease & desist letters from city and state regulators throughout the United States, taxi lobbyists, and even protests from its own drivers! Initially, public opinion appeared to be on the side of Uber as it was championing the proverbial “will of the people”. But whatever goodwill that it had fighting a unmoved incumbent soon faded away to what it is now — intense criticism over its culture and apparent lack of clarity and morals.
The glory that is Uber ushered in a new way of thinking about transportation and technology — making it better. And in doing so, other companies took to the market, including Lyft, Sidecar, InstantCab, and many others. Not surprisingly, Uber remains the market leader thanks to its incredible resources and $1.5 billion in venture capital, but it faces some stiff competition, especially from Lyft (others certainly disagree).
But instead of furthering this “free from poor car service” utopia, Uber decided to open up a new theater and wage war against Lyft. And it has become a messy one with not only drivers caught in the middle, but other competitors in the space. Just take a look at this “playbook” that The Verge obtained listing all the ways Uber could sabotage Lyft. This bears some semblance to another Mel Gibson movie: Mad Max and the Thunderdome. Instead of living peacefully to advance society, Kalanick and his team are instead waging an all-out assault on anyone even remotely deemed a challenge.
Public perception is mixed and perhaps with all the news that’s been out there around the company, it’s something Uber certainly has to work on.
Disruption: I don’t think it means what you think it means
As I alluded to earlier in this article, Uber has become the epitome of this concept of “disruption”. The tech ecosystem is filled with many of these type of companies, including WhatsApp, Evernote, YouTube, Pinterest, Snapchat, and Airbnb, In their own rights, these companies have really changed an ecosystem, perhaps for the better. Many of them have gone on to be valued for more than $1 billion, joining the so-called “Unicorn club”.
Uber is an extreme case as it is part of an even more exclusive group, which some have referred to as decacorns — those companies valued at more than $10 billion. Certainly investors like Menlo Ventures, Google Ventures, Kleiner Perkins Caufield & Byers, Benchmark, Wellington Management, and the slew of angel and individual VCs are seeing potential for the company, but are they also looking at the damage that Uber could be causing to an entire market?
Disruption is meant to re-frame an entire market or society, not to implement a Scorched Earth mentality where you begin entirely anew. The taxi industry, while not necessarily being on my favorites list, has been battling for its survival with one taxi association president comparing Uber to a terrorist group.Perhaps city regulators and the industry were onto something when they’ve attempted to slow down Uber’s progress.
The company’s efforts to become the new logistics service of the world is admirable, but in doing so, it’s bulldozing past things that are incredibly important, such as human decency. It has failed to do proper background checks on multiple occasions and when issues like a assault conviction happens with one of its drivers, Uber says that it’s not at fault, instead insisting that as independent contractors, the company is absolved of any responsibility. There are countless other “horror stories” relating to Uber drivers.
And Uber is apparently disrupting the livelihood of its drivers as well. There are periodic protests by drivers, both those that operate town cars, and those that participate in UberX, its ridesharing service. Uber claims that drivers could make upwards of $90,000 a year (or $25 an hour), some of those valued “partners” aren’t seeing the cash, with allegations being made that drivers are making less than minimum wage.
Ultimately, the one thing that Uber is definitely disrupting is its own culture. TechCrunch’s Jon Russell (and my former colleague at The Next Web) says it best with this headline: Uber’s Moral Compass Needs Recalibration. And it’s true. Uber’s culture has dwindled from caring about the community to focusing about bringing more integrations to its technology. The brash disregard for user privacy is clearly something that has become more apparent with the company — just look at the company’s NYC general manager Josh Mohrer who is currently under investigation (by the company, not by the police) for spying on a Buzzfeed reporter’s customer logs without her consent.
Uber is a Big Data company — it has a treasure chest of where we go, how much we pay, habits, when we need a ride, and much more. But just because it has the technology and the massive engagement that goes along with it, doesn’t mean that it has carte blanche authority to access it without consent. Privacy is privacy and no matter how fantastic the technology is, it mustn’t be compromised.
As Uber soldiers on amidst all of the backlash and criticism from this week, let’s look at the company’s place in the market. Because after all, while I find its cultural practices concerning, the overall idea of Uber is enticing. Kalanick’s vision has been to turn Uber into a logistics company, perhaps becoming the next-generation UPS or FedEx. And he has certainly amassed a great deal of resources, including a potential $2 billion fundraising round currently on-going.
But it needs to become a better corporate citizen and that means a dramatic shift in what’s going on. Kalanick’s vision is still his and he has said he wants Uber to be a “positive member of the community.” But that’s a lot of talk — it’s time to put words into action and turn around the company. Bring harmony to the community once again, Mr. Kalanick.