State of the Art: Uber’s Lesson: Silicon Valley’s Start-Up Machine Needs Fixing

State of the Art: Uber’s Lesson: Silicon Valley’s Start-Up Machine Needs Fixing

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It adopted a more aggressive posture in dealing with forces outside the company — competitors, regulators, drivers and everyone else. By managing drivers as contractors rather than actual employees, it accelerated a new way of thinking about labor. And by repeatedly overlooking bad actors within its ranks, even when their deeds became public, it came to popularize a new heedlessness in tech — not just disruptiveness but a celebrated recklessness.

How Uber’s Brash Approach Backfired

A series of scandals have toppled executives, including Travis Kalanick, Uber’s co-founder.


Who’s to blame for all this? Mr. Kalanick, obviously, who built Uber in his own image.

But there was a crowd standing behind him, too.

First, this was a clear failure of oversight — of investors, boards of directors, partners and anyone else who could have altered Uber’s course and clearly failed to do so. Overlearning the lesson of Steve Jobs’s first fall at Apple — and of founder-led hyper-successes at Google and Facebook — Silicon Valley’s investors created a culture where founders are given carte blanche, their pronouncements and tactics elevated to the level of divine infallibility.

One reason Mr. Kalanick was granted this deference was that Uber had a lot of ways to get money. So this was also a failure of excess: There is just so much private money in the world that Uber was able to shun the public markets indefinitely, a decision held up as wise by many of its enablers, who argued that tech companies need to be insulated from stock-market investors who might not understand their businesses.

A convenient excuse. And, in retrospect, a bad strategy. If Uber had been forced to go public sooner — if it couldn’t raise billions at the drop of a hat from the likes of Saudi Arabia — it would have opened itself up to much-needed scrutiny and potential reform. Staying private created a hothouse that reinforced its worst side, and allowed it to delay building a sustainable culture with a focus on long-term interests.

How might Uber have created such a culture? First, by admitting that founders are not infallible, and recognizing that the most successful ones do best when their impulses are hemmed in by trusted lieutenants, mentors and firm boards of directors.

Fun fact: Mr. Jobs didn’t want to create a Windows-compatible version of the iPod or an app store for the iPhone; it was his lieutenants who pushed him to do it. Facebook’s Mark Zuckerberg and the Google founders, Larry Page and Sergey Brin, were guided by strong, experienced and extremely sober operators — Sheryl Sandberg and Eric Schmidt, respectively. Mr. Kalanick, meanwhile, was allowed to operate more or less solo, to micromanage a company that grew to enormous scale, and was left alone even when the firm’s problems became plain to see.

Finally, this was a failure driven by plain greed, of ends justifying means.

Over the next few days you may hear a revisionist defense of Uber and Mr. Kalanick that will go like this: Uber was fighting an entrenched and monopolistic cabal — taxi companies and their captured regulators — so it had to act more like a wolf than a sheep. Related to that, you will hear this: Uber is good for the world. If it wins, it will reduce car ownership, drive up fuel efficiency, reduce traffic, lower the cost of transportation, probably reduce accidents, almost certainly save lives.

I’ll admit, I believe some of these things. I recently wrote that the world would be better off if we had some kind of Good Uber. And yet the ends still do not justify the means, because the means are so astonishingly reckless.

In every Uber story I write, I get to a paragraph that aims to succinctly note all the recent scandals at the company. What’s notable about this paragraph is how many different kinds of problems there are to put down.

There’s the misogyny and sexual harassment detailed by former Uber engineer Susan Fowler. Then there’s the harassment of riders, epitomized by the incident in which Uber’s executives, including Mr. Kalanick, obtained and reviewed a rape victim’s medical records. Then there’s the sketchy story of Uber’s purchase of a self-driving truck start-up, Otto, that landed it in a legal dispute with Waymo, Google’s sister company.

And yet we’re not even halfway done — there’s also Greyballing (deceiving authorities who tried to shut down its service), God View (a tool that can track customers), lying to the press, ignoring regulators, or that time an executive jokingly threatened to spy on reporters.

It didn’t have to be like this. Yes, business ain’t beanbag; yes, fighting the incumbent businesses requires a strong stomach. But there were so many different problems at Uber that you’d have to be comically naïve to conclude they all stemmed from an intransigent rival.

No, there was something much more deeply amiss here — and everyone put in their money anyway, because, hey, Uber was growing very quickly, so why not.

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