Corporate Activism: The Uber Edition

New York City Mayor Bill de Blasio really stepped in it by picking a fight with Uber. Acting as the puppet for the powerful taxi medallion owners in NYC, who despise Uber, the mayor proposed capping the addition of new Uber cars to 1%. Given the customer growth that Uber has been experiencing in NYC, a 1% increase in drivers would kneecap the company.

Uber fought back, which seemed to catch both City Hall and the yellow cab cartel off guard. Anyone who has watched Uber grow will tell you the company redefines the term being aggressive.

Making critical arguments that they were creating jobs, customers are being served that are neglected by taxi cabs, and the congestion claims didn’t match the numbers. Indeed, the congestion argument that De Blasio relied on was particularly curious because it is now clear that is based on anecdote.

In addition to a wave of advertising and protests by the very people who rely on Uber to earn income, Uber enlisted allies across the political spectrum. However, it was the use of the application as a tool for activating customers that is particularly brilliant. The de Blasio mode that rolled out provided every Uber customer in NYC with a picture of what service would look like if de Blasio successfully capped growth.

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What is different about Uber fighting City Hall versus WalMart or an energy company, is that Uber has user experience on their side. This is where De Blasio fatally erred in taking on Uber. He attempted to use worn our arguments about safety and employee rights to define Uber as a threat to the public welfare when anyone who has ridden in a yellow cab – anywhere – will tell you it is quite the opposite. The data didn’t back up De Blasio’s claim, on the surface or at that level that we just intuitively know.

de Blasio backed down and his allies are attempting to spin a victory out of this defeat. Highlighting the fact that Uber agreed to “restrain” growth to their current level (it’s hard to imagine Uber juicing growth in NYC at this point) and sharing data for the traffic study. Make no mistake about this, it was a defeat for De Blasio and only further weakens him in the eyes of New Yorkers who are already fed up with him.

This loss comes on the heels of a humiliating showing in Albany. Mayor de Blasio sought permanent control of the city school system; instead he got a 1-year extension on the current oversight agreement. He bitterly opposes charter schools, doing the bidding for the teacher’s union, which bitterly opposes charter schools, and instead of reducing their numbers he was handed 50 more. He wanted pro-tenant changes to the rent control laws, he got nothing but a 4-year extension on the status quo. He wanted changes to the 421 real estate law, for which he got bupkis. His showing within NYC politics shows much of the same. He opposed hiring more police officers, and Bratton got 1,300 new officers pushed through.

And now he just lost to Uber.

In the end, it is customers that win. For years, the taxi industry has one constituent, regulators.┬áThe regulators derived their power from the fact that there was an organized industry to regulate and did little to improve customer experience and affordability. The money generated by taxes was spread around to mass transit projects and used to enrichen organized labor, who like the taxi industry had little incentive to improve customer experience. Just ride on San Francisco’s MUNI system, a textbook example for why a municipality should not be entrusted with public transportation.

Uber and Lyft came along and demonstrated that superior customer experience wins every time. It’s not just the taxi industry that sees this threat, cities with crowded and inefficient transit systems are watching their ridership shift to ride services and as companies introduce car-pooling services the trend will accelerate. Preparing for a long battle ahead, it is obvious that Uber and their counterparts are prepared to wage a direct and aggressive battle on behalf of their interests, and because their interests align with consumers I am okay with that.

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