Motion Digest Network: Leading Urban Transformation

Last August, ride-hailing behemoth Uber conceded defeat in China, where CEO Travis Kalanick previously said the company had been “losing over $1 billion a year” to compete in, according to Reuters.

As Uber re-marshalled resources to India and Southeast Asia, it appeared a simple shift of frontiers as it focused on other ride-hailing markets to conquer. Uber’s latest battle, however, had hit much closer to home.

On Feb 2, 2017, Uber CEO Travis Kalanick announced in a company memo that he is leaving the economic advisory council that President Donald Trump had setup, according to the Wall Street Journal (WSJ). Kalanick wrote that his participation was not intended to be taken as his endorsement of either the president or his policies, but had been “misinterpreted to be exactly that”.

The decision is the culmination of intense pressure not just from outside Uber’s ride-hailing headquarters in San Francisco but from within, both stemming from President Trump’s controversial executive order on Jan 27 that effectively banned entry for nationals from seven Muslim-majority countries — Iraq, Syria, Iran, Sudan, Somalia, Libya and Yemen.

The day before his announcement, Kalanick faced a torrent of hard questions from upset Uber staff in a regular company-wide briefing, the New York Times (NYT) reported. The primary issue to most staff was why Kalanick was seen to still be willing to collaborate with President Trump despite his policies.

Kalanick had previously been vocal among tech leaders about working with the new president, arguing that it is best to be “at the table” to move forward. His stance, however, proved to be an opening for Uber’s rivals to attack the company.

Immediately after the executive order was issued, Uber effectively lowered ride-hailing rates around New York’s John F. Kennedy airport at the same time as local taxis — organised under the New York Taxi Workers Alliance — protested the executive order by way of stopping pick-ups around the airport, according to the NYT.

NYT’s report further said that this led to accusations that Uber was undermining the protest. This is inaccurate,according to the Financial Times (FT), as the lower ride-hailing rates did not kick in until after the protest ended.

Regardless, Uber’s critics seized the moment by launching a #deleteUber ride-hailing campaign that ultimately saw 200,000 Uber accounts deleted, NYT said. The taxi alliance also distributed media statements highlighting Uber’s ties to President Trump and organised a protest outside of the Uber office in New York last Thursday, NYT reported.

Even Uber’s drivers were upset at the well-publicised link to President Trump, given many of the ride-hailing drivers, like most taxi drivers of New York, are immigrants. The Independent Drivers’ Guild, a nearly 50,000-strong organisation that represents Uber drivers serving New York city, was quoted by NYT as saying “there would be no Uber without immigrants”.

Meantime Uber’s main U.S. ride-hailing rival, Lyft, gained. After announcing in a blog post that it is pledging US$1 million over the next four years to the American Civil Liberties Union (ACLU), the rival ride-hailing app saw a significant surge in interest that pushed it to the top of the downloads table, according to the Financial Times (FT).

A non-profit organisation dedicated to defending individual rights and liberties, the ACLU had led an emergency legal action immediately after the executive order was issued, Fortune reported. It successfully secured a temporary nationwide stay for parts of the executive order from the court.

The external pressure had reportedly taken a toll internally. The NYT reported that some staff members had told Kalanick of the stigma they suffered from being an Uber employee. After the Feb 1 meeting, a Google document called “Letters to Travis” began circulating internally as staff members told the CEO how the matter had affected them personally, NYT said.

Others were concerned that Kalanick’s willingness to work with President Trump may portray the company as a cynical business concerned only about profit.

In the end, the internal push seem to have nudged Kalanick into reversing his stance on working with President Trump. NYT quoted Kalanick as telling his staff that he had informed the president of his decision and wrote that “your questions and stories on Tuesday, along with what I heard from drivers, have kept me resilient and reminded me of one of our most essential cultural values, Be Yourself.”

What remains to be seen is how Uber could begin repairing the ride-hailing company’s public relations damage that has followed the controversy. The road is likely long and it may be made more difficult if Kalanick’s withdrawal is — for whatever reason — is seen by the president as a snub and non-support of his presidency.

That may very well be the case. Washington DC-based Axios quoted sources from within Uber and the White House as claiming that Kalanick’s exit from the business council was not received well by the president’s inner circle, with some saying:

“If you want to cut off your access to the White House, f@#k you.”