I’ve been following the trials and tribulations of Uber for quite a while. Uber was initially celebrated as disruptive and a game changer, a company that would radically transform American transportation. However, even in the beginning there were complications. Heavily licensed and inspected taxi cab drivers were up in arms at competition from an upstart free from the mandates that limited their own business model. Municipalities worried about a loss of tax revenue and a threat to public safety (in that order!).
But Uber, and CEO Travis Kalanick were celebrated as purveyors of the American Dream. Kalanick was considered to be yet another American Icarus, master craftsman, smashing tradition wholesale in favor of a new, golden dawn, where no one would need to own a car, or to drive. Just like Ayn Rand’s Hank Rearden, Kalanick was bringing a better way to us all, courtesy of Free Enterprise.
But bubbling contagion burbled just under the surface of Uber’s smooth ideal.
Reports indicate that in early 2015, Kalanick visited Apple headquarters and was personally reprimanded by Apple CEO Tim Cook for violating the terms of agreement for IOS applets. Apparently Uber had determined a way to identify individual iPhones even after the Uber app had been uninstalled–and was using this technique to track individual phones. Although Uber states that their reason for doing so was to combat fraud, this identification was an explicit violation of the Apple terms of agreement, which require an individual’s consent to be tracked. Reportedly this technology was used to identify drivers who worked for both Uber and rival Lyft.
In early May 2017, a software tool called “Greyball” was discovered by Portland City investigators. The tool, created by Uber engineers, was intended to assist the company in operating in cities where it had been prohibited, by identifying city employees and not offering them rides.
Uber’s lease program, through which Uber drivers can lease a car from Uber has been described as predatory, and Uber’s attempt to launch their own automated, self-driving auto program was significantly set back when the company admitted attempting to pilfer Google self-driving trade secrets by hiring a ex-Google executive.
Kalanick persevered through all of these scandals. Many regarded them as the behavior of a scrappy and competitive company. Only when reports began to surface of Kalanick’s sexual misdeeds was he asked to resign.
So here is a company that brazenly flaunted local regulations, violated agreements and targeted its employees, behavior which is undeniably harmful to our society. Here is a company that snookered its own drivers into leases that they can’t afford, used dishonest tactics to steal employees from other companies, and intentionally violated local regulations intended to provide safe conditions for both passengers and drivers.
Like Rand’s Rearden, Kalanick pursued a vision and the money that accompanied it.
Rand argues that people like Rearden and Kalanick make the world a better place, and that those who attempt to regulate them or who not agree with their vision are primordial savages, and that individual rights should always trump the rights of the collective.
When this viewpoint is taken literally we as a society are saddled with narcissistic and antisocial jerks like Kalanick.
I think anyone who reads “The Fountainhead” or “Atlas Shrugged” should imagine not some broad shouldered hero but Travis Kalanick. The broad shouldered hero types tend not to be narcissists and many, in reality, would not condone the types of behavior that Rand advocated.
Follow up: I’ve just read a June 21, 2017 article in the Harvard Business Review: “Uber Can’t Be Fixed–It’s Time for Regulators to Shut it Down” by Benjamin Edelman.
One sentence from Edelman’s article really sums up Uber for me:
“But I suggest that the problem at Uber goes beyond a culture created by toxic leadership. The company’s cultural dysfunction, it seems to me, stems from the very nature of the company’s competitive advantage: Uber’s business model is predicated on lawbreaking. And having grown through intentional illegality, Uber can’t easily pivot toward following the rules.”
The issue, I think, goes beyond Edelman’s argument. Uber is not an outlier. It’s not that Uber has a business model predicated on lawbreaking–it’s that antisocial behavior committed by enterprises is celebrated as smart business, and that attempts to rein in such behavior is derided as stifling regulation.