Captain Renault: “I’m shocked—shocked—to find that gambling is going on in here.”
Croupier: [hands Renault money.] “Your winnings, sir.”
Renault: “Oh, thank you very much. Everybody out at once!”
For the past several years, Uber has defined how the world sees the modern tech company—brilliant and customer-focused, but also amoral, ruthless, arrogant, and destructive (to say nothing of sexist). Now, as it seeks to redefine itself, Uber also has the chance to redefine the business of technology, and to upend the unstated assumptions and incentives that led the company, and the industry, to this point.
It may have been Susan J. Fowler’s definitive unveiling of pervasive sexual discrimination and reckless disregard of good management practices at Uber that set in motion the ouster of Travis Kalanick, but the roots of the company’s troubles are far deeper.
The design of a system shapes its outcomes, and Uber, like all too many Silicon Valley companies, is the result of a winner-takes-all economic system. Networked market platforms tend to result in monopoly; the returns to the winner so far outpace the returns to the second-place finisher that cutthroat business practices that subordinate everything else to “winning” come to seem like good business.
Until recently, that approach paid off for Uber. Four times the size of Lyft, its more idealistic, worker-friendly rival, Uber is given more than ten times the value by investors. Long before Susan Fowler’s Medium post became an internet sensation, those investors had heard reports about sexual misconduct by Uber executives, whom the company protected because they were “high performers”—the kind of people they thought they needed to maintain the company’s dominant position.
Investors had learned about Uber’s blatant disregard for customer privacy when the company proudly revealed its malfeasance: They’d been following journalists’ progress to a meeting via the “God view” made available to Uber’s employees. Those investors had remained silent as it became clear that, like Volkswagen, Uber had manipulated its software to deceive regulators—an unseemly practice that nevertheless was part of Uber’s effort to establish its service in as many cities as possible, as quickly as possible. Those investors had watched as Uber’s promises to provide its drivers with good wages were whittled away, saddling them instead with subprime loans to buy new cars that had turned them into 21st century indentured servants. They had seen the dashcam video in which Kalanick berated an Uber driver who had just told the CEO that he had been driven into bankruptcy by a company-provided lease he could no longer afford. Those investors had watched, they had applauded, and they had bellied up to the bar for more of Kalanick’s aggressive, reckless leadership. It was only after public outcry began to harm the prospects for an Uber IPO that the board and investors took action.
The saddest thing about Uber is that it isn’t an exception. It is what we get when we tell companies that creating shareholder value is the primary goal of an organization. Creating real value for customers, workers, and society becomes secondary to creating value for investors.
At their best, capital markets are the circulatory system of prosperity, nourishing people, companies, and communities. At their worst, they are a great spider sucking the life from the real economy.
Even the most idealistic of companies are caught in the web of the great spider. In a recent conversation, Jason Goldman, one of the earliest employees of Twitter, told me how he believed the company had lost its way during the run-up to the IPO, when investor demands for a rapid ramp in Monthly Active Users led Twitter to focus on growth at all costs, rather than delivering new capabilities that would really benefit its users. Even Google, which famously held itself to the standard “Don’t be evil,” has been charged by European regulators with putting its thumb on the scale of search to favor itself over competitors.
Customers are also complicit. We also heard stories of Uber’s bad behavior, and despite January’s #DeleteUBER campaign and a meaningful swing to Lyft and other smaller alternative services, too many users continued to use Uber. In the end, lower prices, convenience, and inertia trumped any moral concerns about the company’s business practices.
Laura Baldwin, the president and COO of my company, O’Reilly Media, likes to say that “your customers are your conscience.” We have neglected our duties as Uber’s conscience for too long. Customers, not just investors, must hold companies accountable. Despite the housecleaning, will Uber really change? More important, will we change what we ask of the companies we patronize? We get the companies and the economy we ask for.
Cleaning up Uber’s internal HR processes and becoming a female-friendly company is only a down payment on what needs to happen. The opportunity for rethinking the company is huge. Uber must commit to making life better for all of its workers—not just those inside its walls, but also its drivers, who are an inseparable part of the service it delivers.
Great companies invent more than new products or services, or great customer experiences. They reinvent the way people work within their organizations. They create new jobs and the economy of the future. Apple taught us to prioritize design and user experience, and inspired hundreds of companies that spread those values throughout the world. Google gave us data scientists and site reliability engineers. So far, Uber has given us …techbro culture and a mercenary attitude toward cost reduction and civic partnerships? Not a legacy I’d want to be remembered for.
But now, Uber has a chance to change that story, and set a positive example for the next generation of tech companies. Imagine if the company decided that its guiding principle was the idea that people and machines can work together to deliver amazing real-world experiences.
Think about it for a minute. A decade ago, could you imagine that your smartphone would let anyone summon a car and driver—that individuals providing taxi service in their own cars could find you within minutes on any random street corner, a needle in the haystack of the city, and whisk you to your destination along the fastest route, with no training required? Uber isn’t just using technology to make people cogs in a great machine. They are partners with the machine, working together to deliver amazing service—and they should be rewarded for it! That’s the key design pattern of what I have called the “next economy”: use technology to empower people to do things that were previously impossible.
And as Uber explores a future of self-driving cars, its executives and investors should be asking themselves questions such as: How might our platform make it possible for our driver partners to own and profit from self-driving cars? and What other services could human workers deliver once driving itself is done by machines? Uber’s experiments in delivering flu shots on demand point the way. That is the future they should be aiming toward, not one in which everyone who works for the company is demeaned in pursuit of “disruption” and “world domination.” Shared prosperity should be the goal of every entrepreneur and every established company.
We are entering a future in which the old definition of the job is fading away, and a new social contract is coming into play. Lifetime employment and union wages are long gone. What will we replace them with? A workforce of ill-paid workers with no safety net and the prospect of being replaced by machines? If we go down that path, expect political and economic upheaval. As Andy McAfee, coauthor of Machine, Platform, Crowd, said to me, “The people will rise up before the machines do.”
Uber is in a unique position to pursue a different path, in which we use technology to enrich and transform our entire society, building a better world for everyone.
A transformative technology platform like Uber comes along only every decade or two. The personal computer, the world wide web, the smartphone – and now Uber. It is the most visible face of a game-changing paradigm by which the smartphone becomes “a remote control for the real world,” as Matt Cohler, an early Facebook employee turned venture capitalist, so insightfully put it when describing his investment in Uber.
For so long, the digital revolution was something that happened on screens, in a world of its own. Now, digital infuses the whole world, transforming everyday services, and increasingly shaping our entire economy. The question of how to redeem Uber is thus the question for all of us: What kind of world do we want to live in?
Winner takes all is a very bad recipe for an economy. An economy is like an ecosystem: a virtuous circle of life. When an ecosystem is out of balance, everyone suffers. In a balanced economy, well-paid, well-treated workers have the money to be customers for a rich community of businesses. Everybody prospers, not just a few. It is not “winner takes all,” but “we all win.”
So yes, do some serious housecleaning of Uber’s flawed management team and rotten HR practices, but don’t stop there. Uber can be a great company, a defining company of the next age of computing, but only if its leaders take seriously the obligation to create a better world for everyone who works for the company, and for all of society, not just for themselves and their investors.
Tim O’Reilly (@timoreilly) is the founder and CEO of O’Reilly Media, and the author of the forthcoming book, WTF? What’s the Future, and Why It’s Up to Us, due out from Harper Business on October 10. Disclosure: Susan Fowler is the author of a book, Production-Ready Microservices, that is published by his company, O’Reilly Media. WIRED Opinion publishes pieces written by outside contributors and represents a wide range of viewpoints. Read more opinions here.
