The World This Week: Uber Reflects Dark Side of Silicon Valley
The cowboy culture of Silicon Valley makes people hardworking, innovative and passionate, but also obsessive, domineering and ruthless.
This week, US President Donald Trump gave an address before a joint session of Congress. He spoke largely in clichés and claimed the US was witnessing “the renewal of the American spirit.” Of course, he threw red meat to his supporters. Enforcing immigration laws was a part of Trump’s speech, and Republicans erupted in applause when he spoke of repealing and replacing Obamacare. More significantly, Trump promised $1 trillion for infrastructure, a marked difference to the 1996 State of the Union joint address when Bill Clinton declared that “the era of big Government [was] over.”
Trump was calm and composed throughout the speech. One would have assumed that the specter of what Anthony Zurcher called “a kinder, gentler president” might finally begin to surface. However, as the ancient Greeks once said, a leopard cannot change his spots. Trump went back to his high decibel rabble rousing ways. On March 4, the owner of Mar-a-Lago tweeted that Barack Obama had Trump’s “wires tapped” during the election campaign. He ludicrously claimed this was McCarthyism.
Even as bitter divisions roil American politics, Somalia is facing mass starvation. A prolonged drought has left half the country seeking food assistance and “sparked fears of a potential famine.” The last famine in 2011 killed about 260,000 people. According to the World Health Organization, more than 6.2 million Somalis need urgent humanitarian aid.
Despite such developments around the world, it is Travis Kalanick, the CEO of Uber, who takes center stage this week. Sitting between two women, Kalanick was having a jolly good time. When they got to their destination, their Uber driver told Kalanick that he was “raising the standards” and “dropping the price.” The driver claimed he was bankrupt because of Kalanick. The CEO departed by saying, “Some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else. Good luck!”
UBER, ÜBERMENSCH AND UNTERMENSCH
For the few who do not really use smartphones like this author’s parents, Uber is a mobile app — i.e. software designed to run on mobile phones. When you open Uber on your phone, you can find cars close by that can ferry you wherever you want, except perhaps the moon.
Even in India, Uber is present in nearly every city this author shows up in. Uber is cheap, convenient, comfortable, quick and reliable. Nearly everyone with a mobile phone uses it. Consumers tend to love Uber. Unsurprisingly, the company has become a global behemoth that operates in more than 400 cities worldwide. It might not be Apple, Google or Facebook yet, but it is smashing Silicon Valley success.
As per Reuters, Uber is valued at $70 billion in private markets. Uber’s business is growing, week after week, month after month. It is headquartered on San Francisco’s swanky Market Street. More than 11,000 people work under Kalanick and millions of drivers ferry passengers around for his company. As of October 19, 2016, Uber had more than 40 million monthly active riders worldwide.
Uber provides an added benefit. It is able to optimize the use of cars. Earlier, cars sat around far too long in parking lots. Customers waited for taxis endlessly and taxis hunted for customers exasperatingly. Uber matches demand with supply at all hours of the day and night. Its app is easy to use and its algorithms work brilliantly. It is yet another example of supremely impressive innovation in the peerless San Francisco Bay Area teeming with entrepreneurs, technologists and venture capitalists.
Yet, like the moon, Uber has its dark craters too. The company offers cheap rides partly because it squeezes drivers. This has been the near universal refrain from every Uber driver in India. In Ahmedabad and Gandhinagar, this author prefers to use Ghanshyambhai, an auto rickshaw driver, instead of Uber. Using Uber may be cheaper, but this author prefers to pay a bit more directly to a rather decent driver he knows well.
Even in swanky San Francisco, Uber drivers are apparently feeling the pinch. Eric Newcomer reports for Bloomberg that the cost of riding in a fancy Uber Black has gone down from $4.90 per mile or $1.25 per minute in 2012 to $3.75 per mile and $0.65 per minute today. These drivers are independent contractors who get no health care or other benefits unlike Uber employees.
Some drivers like the one who drove Kalanick are going through hard times. Some customers, employees and the CEO of Uber might say this is because such drivers could not compete. Restaurants close every day and millions of businesses fail. Those who make poor financial decisions should go bankrupt just as the drought-ridded Somalis who did not save for the proverbial rainy day deserve to starve. Übermensch win, untermensch lose. That is just the way of the world.
Of late, Uber and Kalanick have suffered some setbacks. Many Uber users were not thrilled when Kalanick joined Trump’s advisory council. He resigned only after public outrage threatened to hurt Uber. One of Trump’s executive orders barred entry of refugees to the US. Taxi drivers in New York went on strike, refusing to pick up passengers at John F. Kennedy International Airport. While taxi drivers were on strike, Uber stopped its surge pricing that raises fares when demand increases. It gave the impression that Uber was profiting off the strike if not colluding with the Trump administration to break it.
Newcomer does a thorough job of sketching some of the recent scrapes that Uber has been going through. They include illegally operating self-driving cars in San Francisco to undermining a New York taxi union strike protesting Trump’s refugee ban. More scandalously, Susan J. Fowler wrote a scathing blog post about sexual harassment and sexism at Uber. It is unsurprising that many have accused Kalanick of fostering a “reckless company culture” at Uber.
Fowler’s story offers some insights into Uber’s oft criticized culture. In her blog post, Fowler detailed how Uber’s human resources department had protected her boss who tried to get her “to have sex with him.” She encountered persistent sexism in the company, where only 3% of the over 150 engineers are women. Furthermore, it seems that Fowler was penalized and victimized for speaking up. Fowler also wrote about “a game-of-thrones political war raging within the ranks of upper management,” of projects abandoned for no rhyme or reason, of engineers living under fear that their teams would be dissolved and a constant stream of new projects with impossible deadlines. This star engineer damned Uber as “an organization in complete, unrelenting chaos.”
Yet, despite all the discrimination and chaos, Fowler is grateful that she worked with “some of the most amazing engineers in the Bay Area.” These engineers kept “each other sane, kept the gigantic Uber ecosystem running, and told ourselves that it would eventually get better.” Eventually, Fowler could no longer deal with the sexism in the organization and left when Uber’s big bosses took no action against another manager who had threatened to fire her in flagrant breach of the law for raising issues with human resources.
Many argue that the cowboy culture in Silicon Valley allows risk taking, innovation and relentless expansion. If entrepreneurs like Steve Jobs, Mark Zuckerberg and Travis Kalanick did not push boundaries, there would be no Apple, no Facebook and no Uber. Silicon Valley works because entrepreneurs have the freedom to swing for the fences and hit the home run. If they make mistakes along the way, shoot from the hip and are bit edgy or wild, that is okay.
THE DARK SIDE OF SILICON VALLEY
The April 24, 2016, edition of The World This Week examined “the cult of success and the worship of Übermensch” that pervades the US in general and Silicon Valley in particular. This cult and its attendant worship is an article of faith. Just as some believe the Gita, Bible or the Quran to be the word of god, many Americans, especially in Silicon Valley, believe that markets weigh and measure human worth most accurately. It is this belief that underpins the ferocious drive to succeed in Wall Street and Silicon Valley.
American media has made much ado about Kalanick’s “pugnacious personality and short temper,” but the issue is the culture he operates in, not the Uber CEO himself. Kalanick has a point when he tells the driver that he had to beat the competition. Like Facebook, Uber is a network business. The more passengers it has, the more drivers will flock to it. The more drivers it has, the more passengers will use Uber. The faster the company grows, the more money investors will throw at it. Kalanick is operating in a world where he will be dead if he does not win. Therefore, he rides roughshod over regulators, competitors, drivers and perhaps even employees.
In Silicon Valley, scale is the name of the game. Running a restaurant is for morons. As Peter Thiel would say, creating Facebook is the smart thing to do. This makes competition even more cutthroat than Wall Street. CEOs are wired to win. Their role models are empire builders. Venture capitalists seek out potential Googles. Those who work in Silicon Valley tend to be hardworking, innovative and passionate. They can also be obsessive, domineering and ruthless.
Today, Silicon Valley has acquired far too much power, privilege and wealth. Google owns our data, Facebook knows our lives inside out and Uber is our way to get from one place to another. This has happened because each of these companies has fulfilled deep-seated human needs and wants. Each of these companies has impressive CEOs like Kalanick and brilliant employees like Fowler. They are the big winners of the modern global economy.
Yet Silicon Valley companies are not the first ones to win bigtime. Lest we forget, the first joint stock company in the world was the Dutch East India Company. Soon, others followed such as the British East India Company. They competed to control the trade with Asia. Because they had better technologies than those who were black, brown or yellow, they soon controlled the high seas. Cannons and guns proved quite useful against the darker-skinned natives. Soon enough, these companies did rather well for themselves.
Like Silicon Valley CEOs, people like Robert Clive were meeting needs and wants of their customers. Clive began the British conquest of India to maximize profits for his company’s shareholders. A company that began by importing spices and textiles from India into the UK soon graduated to exporting opium from India to China. Thiel, Zuckerberg and Kalanick might argue this was rather good in the long run. It led to economic growth, modern education and the spread of technology.
Many would demur. They would argue that the companies that acquired colonies were good neither for the short nor the long run. Under their rule, mass exploitation and death by starvation of the natives were not uncommon. They left their colonies mired in poverty, stagnation and social stratification.
For all the inhuman exploitation of these companies, it is important to remember that they were not staffed by pantomime villains. Some fine men worked for these companies, including the author of On Liberty, John Stuart Mill. Yet this did not make these companies humane. As the European companies of a bygone era demonstrate, the quest for power, privilege and wealth can be corrosive to the human soul. Silicon Valley is no exception.
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