26 November 2014

Uber needs to mind its manners


“This won’t turn out to be as peachy as it looks,” said my cabbie as he dropped me off. He was finishing a conversation that I had begun shortly after he picked me up on Pall Mall in central London. We were now pulling up at my favourite pub in Hammersmith, so it was a good £20 worth of conversation.

The topic we were discussing was Uber. Have you tried broaching that topic in one of London’s black cabs lately? I wouldn’t recommend it. But my conversation took place back in the earliest days of summer, when Uber was starting to worry the taxi cabs but remained the darling of just about everyone else.

It was disruptive. It was innovative. It was going to change the business of hailing a taxi.

Much of this is true. In fact, that simple little app has proved to be one of the most disruptive market forces of 2014. It has set governments against unions, regulators against innovators, and entire states against the app’s founders. But you can’t keep a good idea out of a free market, and so by mid-summer, London followed in the footsteps of the coolest American cities, and embraced Uber. Indeed, it became a verb in lightening speed. “How are you getting there?” Answer? “I’m Ubering. Obviously.”

The benefits were clear at a glance. It was a slick, easy, reliable service and it invariably worked out cheaper than one of London’s famous black cabs. Plus, you can play your own music. How else would you leave the house on a Friday night? Indeed, such was the level of excitement around Uber that we could hardly believe our luck when its founder, Travis Kalanick, accepted an invitation to address the Institute of Directors Annual Convention in October this year.

The theme of our conference, held each year at London’s Royal Albert Hall, was Gamechangers. Travis Kalanick did not disappoint. I interviewed him on stage and it was clear that he had all the passion and tenacity you would expect to see in a seasoned entrepreneur. He also had the humility and experience of someone who hasn’t always enjoyed success. It was at our conference that he announced the new ride-sharing feature coming to London’s Uber cars, and as he talked us through the science, the philosophy and the economics of this latest innovation, nobody could have accused him of not believing in the broad benefits of his company’s service.

And yet, some of the magic of Uber’s success has been forgotten of late. It’s been replaced in the media with negative stories about the company’s macho and aggressive corporate culture. Indeed, over the last few weeks a string of articles have undermined Uber’s remarkable story, and they’ve undermined too the idea that the company represents a model that could bring huge benefits to society. The most infuriating part is that Uber hasnobody to blame for this but itself.

In the beginning, Uber was happy to be seen as the aggressive upstart. It was the face of disruptive innovation, but the disruptive behaviour wasn’t just on display in market forces. Kalanick famously described his competitors, the existing taxi industry, as “assholes”. The company has also been accused of unconventional attacks on rivals such as Lyft, a company whose funding round Uber was accused of seeking to compromise, and just last week a senior executive was recorded “thinking out loud” about using private investigators to dig dirt on hostile journalists. In other words, this global enterprise came into being with a predisposition towards a “get out of my way” form of capitalism.

It is not hard to see how this mindset developed. After all, launching a tech start-up is notoriously difficult and uncertain, and breaking into a fiercely protected market would bring out the fighter in any of us. But there comes a point when the scrappy underdog becomes a dramatic and powerful force not just in markets, but in societies and even whole countries. Uber’s impressive success and the company’s unrelenting progress have left some cities telling the company to stay away, even before an application to operate his been submitted. In addition to taxi protests and organised opposition, some cities have banned Uber completely and even Germany had a short-lived nationwide ban. I’m not saying that the forces of opposition are right, or that Uber is wrong to be pushing boundaries, but faced with such opposition the company should have realised that it needed to pay particular attention to who its friends were, and to who they were collecting as enemies. The same technology and the same kind of society that enable Uber to exist as a product also ensure that reputations are established fast, and that public perception is not something to be treated lightly.

I appreciate that it must be difficult to manage a company that’s grown as fast as Uber. During the Summer, when Uber’s London office was in expansion mode, the company would routinely finish the week with twice as many staff as it had started with, such was the pace with which the business grew. Some growing pains and PR blunders can be forgiven. Indeed, the company has changed its narrative in recent months, not least after Kalanick hired Obama’s 2008 campaign manager, David Plouffe, to handle his communications. These days, Travis talks less about competitors and more about his backstory. But this is about more than just one company’s lack of diplomacy. Uber has been hailed as one of the finest examples of disruptive innovation in recent years, and it could just as easily be tarred as the ugly reality of the new economy.

For those of us who believe in the power of competition, innovation and market forces to bring about mass prosperity and a rise in living standards, the hostility mounting against Uber and its brand of disruption should be of huge concern. For what it’s worth, I still believe Uber will get it right. I believe that their approach has the potential to deliver a lot more than cars, and I’m still an advocate of the tenacity and risk that have brought them such success. But it’s clear that they’re not taking everyone with them, and whilst there will always be those who oppose the forces of change, adding to their numbers by alienating the public is a careless and self-inflicted wound.

There’s nothing inherent in the digital economy that requires or creates an aggressive or divisive form of capitalism. There’s nothing in it that says you shouldn’t respect your customers or offer secure employment. Indeed, plenty of us believe that competition, innovation and creative destruction have the potential to bring enormous benefit to economies and to individuals. At a time when faith in markets and enterprise is so troublingly low, proponents of a new way of doing things can’t simply find faster routes to the top or forge new ways around old rules. If people get the sense that the digital economy is just another incarnation of the same kind of capitalism they hold responsible for the recession, then we’ll have missed an opportunity to win an argument that still rages.

Christian May is Head of Campaigns and Communications at the Institute of Directors.