Pando

Uber’s customer is Softbank and its users are disposable

By Sarah Lacy , written on November 27, 2017

From The Travis Shrugged Desk

I keep getting asked to write something about Uber’s latest scandal: Its massive hack affecting some 57 million users, and its cover up of that attack.

The second shoe: New Valley golden boy Dara Khosrowshahi knew about it.

After initially saying “none of this” should have happened and he “[wouldn’t] make excuses for [the breach and the cover-up,” the Journal reported that Khosrowshahi knew about it all and played his own role in the cover-up by telling Softbank, but not his users.

Just so we’re clear: Uber’s absolute and total disdain for the real people that make it money-- whether the drivers who are reportedly developing bladder conditions because they have to hold their urine so long and drive so many hours to make a living wage, the women allegedly raped using the service and then targeted by the company for speaking out, the journalists still delusional enough to use a service that’s been caught spying on them, or the users whose privacy was again treated casually-- continues on with its new CEO. You know, the one who reports to the “ousted” former CEO who still controls the board.

Beyond that, what to say that we haven’t said already?

We’ve been telling you that Uber considers users and drivers interchangeable economic commodities with no intrinsic value since…. 2012. We’ve been reporting on a casual disregard for privacy and data since that creepy “rides of glory” post about tracking users’ one-night-stands. We’ve been pointing out at every available juncture that as long as Travis Kalanick still controls the board, the change in CEO makes almost no difference on the org chart, everyone just moved up a job.

Honestly, what more needs to be said?

Either you are the choir, and you’ve already deleted the app, or nothing I can say or Uber’s management will ever do will make you delete the app. Once we descend beneath the previously unimaginable Silicon Valley low of “obtain medical documents in order to smear a user raped using your service” and you still use the app… I mean… you are beyond all reason and humanity. At this point you have a lot in common with the kind of voter weighing whether or not a tax cut for corporations is more or less important than punishing a pedophile. That’s how much using a service (that has a nearly identical competitor in the US) means to you.

OK, maybe two things need to be said. And I’ll keep this short.

One. As subscription services have been on the rise, there’s a new way of thinking about “users” in the tech. If your user pays you, that’s your customer. If someone else pays, your user is your product.

This is what we’re seeing play out painfully with Facebook and Twitter. Twitter is watching users get abused on its platform, but refuses to aggressively crack down on abusive accounts and bots presumably because it would hurt user numbers and activity and that would hurt advertisers and its stock price.

Facebook has had to prioritize sales above truth. Facebook staffers have watched uncomfortably as its success has eroded the very sense of community it originally created.

Kevin Kelleher recently articulated this beautifully for us:

There's an important corollary to that superhero chestnut about power and responsibility: With great scale comes great destructive powers. Not desired powers of destruction, or even imagined ones. Just add a few sloppy lines of code, a few long-ass meetings where people say yeah-yeah just to move on, a few too many fuck-it-no-one-will-ever-know moments.

Now scale these micro-failures up enough and they become dangerous indeed. Google and Facebook wonder why it's now so easy to be owned by trolls with anti-democratic intentions. Amazon's warehouse jobs haven't grown more humane even as they grow more numerous. Amazon may soon face antitrust concerns, just as Google and Facebook are facing Congressional inquiries this week.

There's a quiet rustling sound throughout Silicon Valley as executives scratch their heads wondering how their simple intentions were outrun by the world-changing machines they worked to hard to build.

But that makes sense, right? “Free” always has a price, even if we didn’t imagine it would be our mental health or, yunno, democracy.

But here’s the truly fucked up thing about Uber: Its users pay Uber, and yet it still seems to consider them the product, not the customer. And not just any product, a disposable one. Even Facebook doesn’t go after rape victims.

So, if it’s not the users, who is the customer for Uber? Well, Khosrowshahi’s actions show us clearly: Softbank, the only backer left willing to write Uber the size check it needs at the price it needs. Going public is untenable with the type of scandals that keep coming out about Uber, and the pending lawsuits about everything from trade secret theft to board seats to discrimination to, now, mass data theft.

Which brings me to…

Two. There is nothing culturally good for Silicon Valley about Softbank’s Vision Fund. Because it’s so unimaginably large, price-insensitive, and plans to run the tables on every company that could possibly become the next huge thing, it could invest half a billion in every unicorn, have plenty left over, and be in keeping with its mandate.

It is the ultimate deep-pocketed, economically-apathetic “customer” for a company as morally bankrupt as Uber. We are witnessing what happens when a company who only cares about pleasing its next investor meets an investor who doesn’t care about price, morality or the actual economics of a business. An company that is so deep in this “fuck the world as long as we grow” game meets an investor who is just taking a flyer on everything growing, no matter what else is going on there.

The Valley has never seen a company as openly morally corrupt as Uber: Whether it’s threatening journalists, smearing its own users, endangering its own drivers, sexually harassing and discriminating against its staff, or allegedly stealing billions in trade secrets.

Lawmakers groan and make noises about regulation, and perhaps, as the Financial Times suggests, Uber will pay a price in Europe. But it doesn’t matter: Thanks to Softbank, all those early investors are getting rewarded for it nonetheless. So the next Uber will get funded, the next Kalanick will be rewarded for his “hustle.”

To be clear: No one is speculating that this hack, the class action lawsuits in motion, the investigations by five state attorney generals or anything else will scuttle the Softbank deal. At most, it’ll just affect the price a bit.

Why should Khosrowshahi hold himself to a higher standard than his predecessors? As they say in Silicon Valley, it wouldn’t be upholding his “fiduciary duty” to suddenly have a moral compass.