- The Upstarts: How Uber, Airbnb, and the Killer Companies of the New Silicon Valley Are Changing the World
- Brad Stone
- Little, Brown and Co.
It is tempting to think the #deleteuber movement launched last month in New York – a hashtag and cry for punishment that flowed from the ride-hailing company's perceived closeness to U.S. President Donald Trump – became a global movement so quickly because everything is amplified in Trump's America. But it's not merely because Uber appeared to break a taxi strike during the peak of protests against executive orders curtailing immigration from seven predominantly Muslim countries, and not because, until last week, Uber's chief executive, Travis Kalanick, was on a White House business advisory council.
Thanks to the great timing of Brad Stone's new book, The Upstarts, curious readers will discover the company has a long history of creating reasons to delete your account.
Stone's book is ostensibly about two companies, Airbnb and Uber, that have blown up just about every existing relationship in the hospitality and taxi industries by unlocking the economic value of underused assets (amateur drivers became cabbies and people with spare rooms became amateur hoteliers).
While Stone – a technology reporter for Bloomberg – hasn't cracked the culture of either startup as he did with Amazon in his previous book, The Everything Store, which revealed that crying at your desk was a part of everyday life inside the online retailer, The Upstarts features lots of new details about the tactics Airbnb and Uber employ. The book reads like several long magazine features stapled together, with chapters generally alternating between the two companies, although Airbnb gets less space in the narrative.
While Stone somewhat disproves the myth that Airbnb is the "nicer" of the two upstarts – showing how the companies often mirrored each other's tactics as they raised billions, while hosts and drivers were often underpaid or left to fend for themselves in legal fights – Airbnb CEO Joe Chesky is nowhere near as compelling an antagonist as Kalanick.
True, Stone admits there are things to admire about Kalanick, and early on, he does some work to humanize the hard-charging California native, who was already a startup millionaire when he co-founded Uber, albeit one who claims to have been burned out by brutal experiences with his first two businesses.
His first company, Scour.net, an early search engine that enabled peer-to-peer sharing (and therefore copyright violations) was sued into bankruptcy by the music, television and movie industries. His second company, Red Swoosh, based on a data-transfer technology, had no real revenue and few customers.
Rather than be humbled, these experiences seemed to radicalize Kalanick; Stone recounts incident after incident where he turned a potentially constructive meeting with a more powerful player into a confrontation that minted a new lifelong enemy. He's portrayed as a man who will end friendships, break business arrangements and outmanoeuvre regulators and politicians who oppose him.
Uber and Airbnb's willingness to charge past long-standing restrictions on their businesses often seemed to end in tragedy or scandal. The way they shrug off legal, ethical, public relations and financial challenges is almost awe-inspiring. But not uplifting. (Kalanick once explained his actions thusly: "This is the way of the world, and the world isn't always great.")
Take the ugly mishandling of the 2014 death of six-year-old Sophia Liu, run down by an Uber driver who was checking his phone for new fares; Uber's first instinct was to deny involvement, not to comfort the family or promise to do better. Eventually there was an apology, but it was too late to contain the damage.
In one prophetic line, Greg McAdoo, a partner at venture capital giant Sequoia, describes how way back in 2009, his colleagues were concerned with the legality of Airbnb. What he told them would come to equally apply to Uber: "These businesses either work or don't work based on whether or not they are good for consumers."
And there's the rub. Uber's current troubles seem to stem from its slipping hold on the affections of its users; Mobilizing that people power has been the company's ace in the hole in many of its epic struggles with city politicians and regulators. With #deleteuber, the tables have turned.
In the middle of the Trump fiasco, Kalanick wrote a blog post that said, while he would tell the President what he thought of the ban, he did not say he would distance himself from the administration. As the week stretched on and approximately 200,000 accounts were deleted, representing millions in potential lost revenue, Kalanick changed his tune and left the council.
Uber's progress is still fragile: It was beaten by a rival in China and is handcuffed by strong regulations in large parts of the European Union. That leaves Stone's book without much of an ending. Kalanick still offers up a grand vision, in which, thanks to Uber, car traffic in cities is slashed in the next five years. "Our cities are going to given back to us, our time is going to be given back to us," he declares.
In the book's epilogue, one of the few places where Stone offers his own perspective, he writes that it's "up to us to hold them to their promises."
Shane Dingman covers technology for The Globe and Mail's Report on Business.