Uber is breaking bad
Uber has built a great service. Why do they feel the need to use dirty tricks to succeed?
Tim O’Reilly has said that Uber is an example of designing for how the world ought to be. Their app works well, their cars are clean, their drivers are pleasant, and they usually arrive quickly. But more goes into the experience of a company than just an app. Corporate behavior is also part of the company’s design; perhaps not as noticeable as their Android or iPhone app, but a very real part. That’s where Uber falls down. They have increasingly been a bad actor, on many counts:
- Coercing their black car (Uber) drivers into driving for the low cost UberX service, which is much less profitable.
- Being disingenuous about the economics of driving for them. Justin Singer does an excellent job of deconstructing their claims. $90,000/year for a 40-hour work week? Think $40K. For a 70-hour work week.
- Badmouthing a competitor (Lyft) that is raising capital. As Fred Wilson says, this practice may be common, but it’s unethical and unproductive.
- Predatory (“surge”) pricing during peak hours, as much as seven times normal prices.
- Playing fast and loose with drivers’ background checks.
- And now one of their senior VPs has suggested researching and exposing the private lives of reporters who criticize them. He’s apologized, and said he never meant anything of the sort. Right. It’s not what you apologize for that counts; it’s not doing stuff you need to apologize for in the first place.
Uber likes to hide behind the shield that they’re a “technology company.” They write an app, they maintain a database, but they’re not in the transportation business. The drivers are independent business people, not employees, and the riders are the drivers’ customers, not Uber’s. That’s all well and good on paper, but it creates a huge disconnect between the company, the people doing the hard work of driving cars, and the people buying the services. It isn’t OK for Uber the company to be unaccountable to its drivers or its riders. That’s a situation that’s ripe for abuse — and abuse is what we’re seeing.
I am not grousing about Uber’s conflicts with regulators. I dislike attempts to use regulation to discourage new economic models and preserve entrenched business interests. I hate taxis, and Uber has provided a welcome alternative. Current taxi regulations (at least in the US — I don’t know about Europe) have created conditions that are hardly different from debt slavery, and are bad for both the driver and the customer. I also know how hard it is to find a taxi when you really need one. Walk from 10th Avenue in Manhattan to 2nd in the rain? Done that, and I didn’t see an empty cab the whole time. That walk convinced me that I needed to sign up for Uber.
But since that long walk, Uber’s behavior has become unacceptable. If I thought boycotts were particularly effective, I’d suggest a boycott until Uber gets its act together. I hope, though, that Uber’s investors will stop counting the dollars that might flow into their funds should Uber eventually make the big IPO, and think hard about the damage that Uber’s management is doing to their investment. It’s difficult to build a good name, and very easy to destroy it. If I had a few million dollars worth of skin in the game, that is very much what I’d be thinking about it. In many start-ups, no matter how profitable, a time comes when the investors need to step in and provide “adult supervision.” This would be that time.
If this is Uber’s vision of how the world ought to be, leave me out. Next time I need a ride, I’ll certainly be thinking about Lyft.