The editors of the Wall Street Journal are complaining about the management shakeups at Uber:
Uber said Tuesday that CEO Travis Kalanick will take an indefinite leave from the company he built, a day after chief business officer Emil Michael stepped down. The moves followed a unanimous vote by Uber’s board—which consists of private investors—to adopt reforms to its “workplace culture.†The San Francisco-based startup enlisted former U.S. Attorney General Eric Holder’s law firm Covington & Burling after several women complained that Uber executives ignored sexual-harassment allegations.
Workplace culture often flows from the top, and the internal analysis seeks to correct lapses in executive judgment. In 2014 Mr. Michael floated a plan to dig up details about the private lives of journalists critical of the company. Earlier this year Mr. Kalanick was caught on camera berating a driver.
Yet Uber would never have achieved what it has if not for Mr. Kalanick’s hard-charging attitude. The company has had to break through regulatory barriers backed by the taxi lobby in city after city, and it didn’t do that by bowing at the first sign of resistance. Uber’s innovation has greatly improved the lives of millions of urban travelers, and that breakthough has in turn invited competitors like Lyft, Via and Gett. There’s no guarantee that Uber will emerge as the Facebook of this pack.
Let’s go to the box scores. Uber requires regulatory intervention simply to exist. You can argue whether the regulations should have existed in the first place but that’s a fact. And it’s not a “growing pain”. That Uber’s corporate culture is malignant isn’t a growing pain, either, unless you assume that sexual harrassment is the only way a start-up can operate. Not growing pains, either.
Add that none of the ride-sharing companies is operating at a profit. That sounds to me more like failure of business model than growing pains. Maybe “disruption”, the Silicon Valley shibboleth du jour, just isn’t as great a strategy as the geniuses think it is. Keep in mind that Amazon, the paradigm of disruption as a business model, just doesn’t make much money in retail. They’re making a fortune because they created a brand new product category.
Could it possibly be that innovation is more important than disruption as a business model and that innovators and disrupters are different sorts of people? Don’t tell the editors of the WSJ that. They’re hoping for a big IPO.
