Is Uber Too Disruptive to Fail?

We live in the era of “walking back,” politicians walking back a remark, speed-hungry reporters walking back the news. But is “walking back” even possible? Last Friday, Emil Michael, senior vice president of business at Uber, suggested that the company throw a cool million toward hiring a team of researchers and reporters in order, according to Buzzfeed, “to dig up dirt on its critics in the media—and specifically to spread details of the personal life of a female journalist who has criticized the company.” Through a spokeswoman, Michael released a statement in response, explaining that “The remarks attributed to me at a private dinner . . .  do not reflect my actual views.”

And this afternoon, in response to Michael’s remarks, Uber’s CEO Travis Kalanick unleashed an oddly unapologetic apology by tweetstorm:

Kalanick has not shied away from a polarizing reputation. He can behave, gleefully, like a feral frat boy dreamed up by Ayn Rand; his mission statement runs to some variation of “you know, push a button and get around San Francisco like ballers.” Perhaps having former Obama strategist David Plouffe as company vice president of policy and strategy has changed his game. But the undeniable fact of the current imbroglio, and the issue for Uber going forward, is that Michael’s remarks actually do represent a common perception of the company’s approach.

Uber has had myriad complaints against it, the least of which were complaints about surge pricing from Uber users. Start with the livelihood of taxi drivers, a professional cohort not known for a glamorous lifestyle. (Ask your next cab driver about cleaning up vomit.) Some of Uber’s drivers complain bitterly about its work policies. One recently told the reporter Avi Asher-Schapiro that the company operates “like an exploiting pimp … They cut prices whenever they want. They can deactivate me whenever they feel like it, and if I complain, they tell me to f*ck off.” Uber claims that there is no need for its drivers to have a union, that the company simply asks them to trust that it will act in their best interest. (This could remind a person of Henry Ford.)

The company has been accused of pushing drivers into subprime loans. It’s also had to deal with class action suits over tip-skimming. 

But, up to now, these complaints have hardly slowed Uber’s ride. An important reasons is that American politicians love Uber: the disruptive spirit of innovation, the job creation, the free-market values revved up and rolling. The Republican Party launched a “Support Uber” petition in August, in part to chase the youth vote. Reince Priebus, Chairman of the Republican National Committee, expressed hearty admiration of the company. In a statement, he said, “When new companies and new technology come along, it’s not the government’s job to protect the old way of doing things. Government shouldn’t pick winners and losers. They certainly shouldn’t block innovation, which can make life easier and more affordable, just so an existing monopoly isn’t threatened. When legislators over-regulate, it’s consumers who pay the price.”

And politicians sure like the company’s bridge-to-the-future ideology. Last week, the Washington public affairs firm Hamilton Place Strategies released a report analyzing “the regulatory and market implications of the drastic increase in Uber use by Members of Congress.” Namely: In 2010, Congressional use of Uber represented 0% of the market share in 2010. In 2014, it represented 61% of total Congressional rides.

Many today are saying that they’re disgusted by Michael’s sexism, that Kalanick hasn’t gone nearly far enough, that they’re deleting the Uber app. But the fact is, Uber seems to consider itself above rules and repercussions. And in some ways, it may be. How many other times in history has Congress used a service before regulating it?  The rules are different for Uber. Which leaves things, for the time being, up to the consumer—and let me tell you, when it’s cold, and damp, and late, and you need a ride …