The Young Turks in the Silicon Valley like to brag about creating “disruptive innovation.”
In short, they devise as innovation or technology that establishes a new market and creates new values that upend established markets and values.
There’s nothing new about that. It has been going on for centuries with the pace picking up at the dawn of the Industrial Revolution, shifting into higher gear when Henry Ford rolled out the Model T, and moving into overdrive with the race to the moon spawning endless new technologies as well as rethinking things such as how to drink fruit juice in the form of Tang.
In general, disruptive technology is usually considered good.
Those pursuing it almost always encounter roadblocks in the form of market rules and regulations. Such was the case with Henry Ford who fought his epic court battle against the Selden Patent that required what was then a draconian $15 per automobile sold making it expensive to mass produce.
Uber likes to cast itself in the same vein as the Henry Fords of the world. They take on what they consider are unjust rules and regulations to deliver lower priced goods and services that are easier to access. But before you start lauding such behavior on a wholesale basis, what Uber does is entirely different than what people like Henry Ford, Steve Jobs or Bill Gates did.
Uber has taken the approach that it is OK to ignore regulations and laws on a wholesale basis and deal with the consequences that often include heavy fines after they occur.
They have used such an approach to up end taxi service to generate $2 billion a year.
Money, by the way, allows you to thumb your nose at the government and get away with it. For decades independents running jitney cabs to provide transportation to underserved areas or parts of cities where taxi cabs refused to go in locales as varied as Los Angeles to Kansas City were successfully prosecuted and put out of business. It essentially protected taxi franchises/monopolies and propped up cab fares.
Uber, with a mountain of investment cash they have deployed to hire lobbyists, court politicians and recruit a small army of lawyers, have essentially started a new trend that’s embraced by Young Turks of the Silicon Valley to simply ignore government regulations.
Before you applaud this as the greatest thing to happen to economic growth, a way of pushing back excessive government control or as being inevitable consider two things: Park City in Utah and labor abuse.
This past weekend, Uber Chopper service was raking in the dough charging $200 for one-way helicopter rides from Salt Lake International Airport to the Sundance Film Festival in Park City.
Uber spokesman Taylor Patterson was quoted as saying, “We’ve seen a ton of interest, (a lot of) people are really excited about it.”
Well, at least wealthy jetsetters were really excited about it. That wasn’t the case for people living near the field where the helicopters were landing and taking off. Nor were the sandhill cranes that normally populate the field happy about it.
Summit Count Sheriff Justin Martinez responded to hundreds of complaints by saying he would arrest or ticket pilots that didn’t comply with zoning laws that govern the use of land. The issue went to court where a judge declined to issue a restraining order until a more extensive court hearing this week.
Try to operate a de facto helipad in your backyard and see how far that gets you.
Uber embraces a business model that not only tramples on the property rights of others so they can make big bucks, but also ignores environmental considerations. Imagine an “old school” helicopter service trying to schedule helicopter flights with a complete disregard for environmental concerns.
Then there is Uber’s wholesale ignoring of labor laws.
They are getting taken to task on this one in a class action suit filed in California. Uber argues its drivers are independent contractors and that they are just providing an app and not running a ride sharing business per se.
Uber has gone as far as telling riders they don’t have to worry about tips as it is included in some charges. But instead of that tip going to the driver it is pocketed by Uber.
It’s easy to generate $2 billion a year on $10 billion in annual ride bookings if you do things like confiscate tips, don’t have to provide and maintain a fleet of vehicles, don’t follow environment and general government rules or skirt labor laws.
So why is it OK in many people’s mind for an upstart tech firm like Uber to ignore the environment, disregard rules and regulations, and take advantage of labor by financially using them by even going as far as stealing their tips but not a Wall Street firm?
Uber likes you to think they are driven by social good in the form of lower ride charges and more frequent pickups than taxi services. But in truth they are concerned about the same exact thing the Wall Streets firms that many Americans seem to loathe — making money by the shipload.
And they do so by running roughshod over the environment and workers.