Uber’s boys club is what’s wrong with Silicon Valley

Editor’s Note: On Thursday’s broadcast, Paul Solman reported on the Uber controversy stirred by one of its executives when he suggested — thinking he was off the record — that the company should investigate reporters critical of the company. “Might that be a P.R. problem?” he was asked. “Nobody would know it was us,” he replied. (Read more from BuzzFeed reporter Ben Smith, who broke the story.)

But as industry analyst Jan Dawson told Gwen Ifill, there’s more than one story casting the ride-sharing company in a poor light. “There’s this consistent picture emerging of a sort of frat boy culture at Uber.”

Meanwhile, as we’ve reported on Making Sen$e, some Uber drivers are disgruntled about rate cuts and their inability to make ends meet driving as a full-time gig.

The latest criticism of Uber, from PandoDaily editor Sarah Lacy, whom Uber executive Emil Michael wanted to target, is that the company is misogynistic.

That’s not unusual for Silicon Valley, says Making Sen$e regular contributor Vivek Wadhwa, who’s written widely about the importance of diversity in the high-tech industry. Here’s what he told Fox Business News’ Deirdre Bolton Tuesday:

This is symptomatic of what’s wrong with Silicon Valley. This level of arrogance. You’ve got this money that’s coming through the system, and regular people who lucked out and made it big. They think they’re God and can mistreat anyone they want to mistreat….

This is the type of behavior you see here, too often…. Every step of the way, women have a disadvantage over here [in Silicon Valley]. It’s disgusting to see the way they’re treated at conferences; the way men talk about them. We’re back in the 1950s over here, before the Civil Rights era. This is how Silicon Valley is, and this is why I’ve been battling it so much and arguing it needs to be fixed because you see it manifesting itself all over the place. If there were women on Uber’s board, and on its executive team, they would not have behaved this way. It’s these arrogant guys who get away with this… This happens all the time. Except in this case it blew out of all proportion because it was directed at journalists.

An Uber spokesman released the following statement, attributed to Michael after his comments were made public:

The remarks attributed to me at a private dinner — borne out of frustration during an informal debate over what I feel is sensationalistic media coverage of the company I am proud to work for — do not reflect my actual views and have no relation to the company’s views or approach. They were wrong no matter the circumstance and I regret them.

But as Vivek writes in the following column, he would have expected more from a company revolutionizing ground transportation, because ultimately, they’re hurting themselves. This essay originally appeared on the Washington Post’s Innovations blog and is reprinted here with permission from Wadhwa. He is an entrepreneur and academic at Stanford, Duke, Emory and Singularity Universities.

— Simone Pathe, Making Sen$e Editor

Uber, the leading ridesharing company, has earned the distinction of becoming one of the most hated companies in the technology industry.

One of its executives, Emil Michael, recently suggested to a large dinner gathering that his company should allocate $1 million to dig up dirt on reporters who were criticizing it. Last month, it tried to entice riders in Lyon, France, with ads pitching free pickups from attractive female drivers. In an interview with GQ earlier this year, Uber chief executive Travis Kalanick referred to his $18 billion company as “Boober” because it gained him “skyrocketing desirability” with women. The company has also received widespread criticism for treating its drivers as disposable entities.

The irony is that Uber may actually be doing humanity a service — by paving the digital trails. Uber and its CEO are doing the same work as the industrialists who built the railroads and core infrastructure that catapulted the United States into global, economic and industrial dominance in the 19th century. They exploited labor, corrupted governments, and built monopolies. They were so despised that they were called robber barons. Uber is also exploiting labor to some extent, but its disrepute is largely because of its arrogance and frat-boy behavior—not only its business practices. And this behavior is only slowing the company down.

What Uber is building is not a tangible asset such as a steel mill, railroad or oil pipeline, but their digital equivalent. It is creating an economy of scale that can connect people to transportation networks via smartphones — a new form of “frictionless transactions.”

Uber’s first innovation was in the immediate availability of transportation. Uber’s new carpooling feature has accomplished in a few months what cities, states and companies have struggled to accomplish for decades — functional shared private car usage. And now we are getting a glimpse of what is possible with Uber’s announcement of delivery services for medicines and essential goods. It can create all sorts of new economic efficiencies.

Equally important, Uber is changing the way people think about cities, transportation, and ownership and is laying a psychological foundation — a mental infrastructure — for a post-ownership society. My son Tarun lives in a region of San Francisco that is poorly served by public transportation. Buses take forever, and cabs are unreliable. So, last year, after using Uber, Lyft, and other on-demand ride-sharing services, he sold his car. These services have made it much easier for him to get around and eliminated the hassles of finding a parking spot.

Just as it required a major mental leap for people to imagine cities after horses, building the mental framework to imagine cities after cars is no simple task. That is why stoops (staircases to apartment buildings) in New York are so high: they were designed to remain above the horse manure, and that thinking has never changed. Uber has already changed our thinking about transportation; it has paved the way for dozens of competitors, who can see the winning formula at work on our smartphones. Flip through the various Uber competitors, and you’ll see software and user interfaces that are very similar to those that Uber has built. In that sense, Uber’s monopoly on infrastructure is not as defensible as those of the traditional robber barons.

And, frankly, that’s what mystifies me. You would think a company that has done such a great job building a digital infrastructure that’s hard to defend would care more than it does about projecting a friendly image and about assisting the people working for it. You would expect greater social responsibility and less arrogance.

True, the Rockefellers, the Carnegies, and the Vanderbilts — who were the most famous robber barons—also made few friends during their ascendancy. And, as Kalanick does, they had a “winner-take-all” attitude and went to extreme lengths to build their visions. In the case of the railroads, the oil pipelines, or the steel mills, often this meant taking land away from people who did not want to hand it over. Or it meant building things without proper political or regulatory approvals, because they figured that once the project had become a fait accompli, the laws could be changed to reflect the new reality.

Uber has built its business without waiting to consult with government on the legality of ride-sharing. If it had waited, the business might never have gotten off the ground. But Uber has also managed, along the way, to anger many people and alienate large swathes of both drivers and journalists. Riders have not left the company to any large degree — yet. Uber’s work remains unfinished, but its mission is an important one. Let’s hope that Kalanick can recognize that this requires a bit more maturity, dignity, and tact; that by sharing his prosperity with the drivers who are helping him build this new infrastructure, he can avoid the label “robber baron;” and that he will come sooner rather than later to put the welfare of others before that of his ambitions.

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