Why Technology Disruption Is Not Better For Entrepreneurs

While Uber’s app was obviating the need for cab companies, Kalanick (who would step down in June 2017 amid a company meltdown) turned the local taxi industry into the biggest lobbying bogeyman since Big Tobacco. A low-wage industry and its longtime institutions were labeled “trusts” and “cartels.” “My politics are: I’m a trustbuster. Very focused. And yeah, I’m pro-efficiency,” Kalanick told >The Wall Street Journal. “It’s good for everybody, it’s not red or blue.”

With Kara Swisher at the Code conference, Kalanick was even more open. “We’re in this political campaign, and the candidate is Uber. And the opponent is an asshole named Taxi,” he said. The company tried to catalyze riders to contact their local officials telling them to allow Uber to operate, no matter the rules on the books; the effort was called Operation Rolling Thunder. “We have to bring out the truth about how dark and dangerous and evil the taxi side is,” he concluded.

In Kalanick’s national crusade against Taxi, he literally hired Barack Obama’s campaign manager, David Plouffe. In a tough battle in New York, he brought in Michael Bloomberg’s former campaign manager, Bradley Tusk, and won. Tusk later founded a venture firm based on the idea that they could help start-ups with politics. Here’s how he sees it. “We beat up the entrenched interest, and we either convince the regulator the law is okay as is, or we change the law,” he told >The Information. “That playbook, while not easy, we get.” For providing this kind of service to Uber, Tusk may have made $100 million.

For early Uber investors, Uber was everything that disruption was supposed to be. You took an app, created by a small number of people in a San Francisco office, and used it to erase the institutions—formerly called businesses—that used to sit between the buyers and sellers of services. It wasn’t just a company; it was a company that destroyed the need for other companies. It was pure and uncut Economics 101, capitalism as it was meant to be. And if by eliminating much of the labor that it previously took to organize car services, the company would also generate billionaires … well, to the innovators go the spoils.

Thinking like this could pass, in the early 2000s at least, as merely “pro-efficiency,” even if it was obviously opposed to, at the very least, organized labor. Uber’s corporate behavior, expressed through the CEO and his world-beating political consultants, was meritorious. Taxi’s corporate behavior, as expressed through a multitude of small-business owners and employees, was “evil.”

People have consumer desires and more aspirational political and civic desires. You might want to drive a car that burns gas, but also support a carbon tax as part of fighting climate change. You might buy cheap eggs, but support legislation that tightens the regulations around the cages the chickens live in. But Uber’s form of regulatory arbitrage relied on making an individual’s consumer desire a civic cause. The company created a loyal user base in a legal gray area; then, when a city’s elected political leaders made a decision Uber did not like, the company would use its power to push it political messaging to its users. Elected officials became like customer-service representatives during a cable outage, desperate and nervous.

Source : https://www.theatlantic.com/technology/archive/2019/05/why-silicon-valley-loved-uber-more-everyone-else/590203/

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