Ubers legacy hangs in the balance: Digital robber baron or respectable innovator?

Uber, the leading ridesharing company, has earned the distinction of becoming one of the most hated companies in the technology industry. One of its executives, Emil Michael, recentlysuggested to a large dinner gathering that his company should allocate $1 million to dig up dirt on reporters who were criticizing it. Last month, it tried toentice riders in Lyon, France, with ads pitching free pickups from attractive female drivers. In aninterview with GQ earlier this year, Uber chief executive Travis Kalanick referred to his $18 billion company as Boober because it gained him skyrocketing desirability with women. The company has also received widespread criticism for treating its drivers as disposable entities.

The irony is that Uber may actually be doing humanity a service by paving the digital trails. Uber and its CEO are doing the same work as the industrialists who built the railroads and core infrastructure that catapulted the United States into global, economic and industrial dominance in the 19th century. They exploited labor, corrupted governments, and built monopolies. They were so despised that they were called robber barons. Uber is also exploiting labor to some extent, but its disrepute is largely because of its arrogance and frat-boy behaviornot only its business practices. And this behavior is only slowing the company down.

What Uber is building is not a tangible asset such as a steel mill, railroad, or oil pipeline, but their digital equivalent. It is creating an economy of scale that can connect people to transportation networks via smartphones a new form of frictionless transactions.

Ubers first innovation was in the immediate availability of transportation. Ubers new carpooling feature has accomplished in a few months what cities, states, and companies have struggled to accomplish for decades functional shared private car usage. And now we are getting a glimpse of what is possible with Ubers announcement of delivery services for medicines and essential goods. It can create all sorts of new economic efficiencies.

Equally important, Uber is changing the way people think about cities, transportation, and ownership and is laying a psychological foundation a mental infrastructure for a post-ownership society. My sonTarun lives in a region of San Francisco that is poorly served by public transportation. Buses take forever, and cabs are unreliable. So, last year, after using Uber, Lyft, and other on-demand ride-sharing services, he sold his car. These services have made it much easier for him to get around and eliminated the hassles of finding a parking spot.

Just as it required a major mental leap for people to imagine cities after horses, building the mental framework to imagine cities after cars is no simple task. That is why stoops (staircases to apartment buildings) in New York are so high: they were designed to remain above the horse manure, and that thinking has never changed. Uber has already changed our thinking about transportation; it has paved the way for dozens of competitors, who can see the winning formula at work on our smartphones. Flip through the various Uber competitors, and youll see software and user interfaces that are very similar to those that Uber has built. In that sense, Ubers monopoly on infrastructure is not as defensible as those of the traditional robber barons.

And, frankly, thats what mystifies me. You would think a company that has done such a great job building a digital infrastructure thats hard to defend would care more than it does about projecting a friendly image and about assisting the people working for it. You would expect greater social responsibility and less arrogance.

True, the Rockefellers, the Carnegies, and the Vanderbilts who were the most famous robber baronsalso made few friends during their ascendancy. And, as Kalanick does, they had a winner-take-all attitude and went to extreme lengths to build their visions. In the case of the railroads, the oil pipelines, or the steel mills, often this meant taking land away from people who did not want to hand it over. Or it meant building things without proper political or regulatory approvals, because they figured that once the project had become a fait accompli, the laws could be changed to reflect the new reality.

Uber has built its business without waiting to consult with government on the legality of ride-sharing. If it had waited, the business might never have gotten off the ground. But Uber has also managed, along the way, to anger many people and alienate large swathes of both drivers and journalists. Riders have not left the company to any large degree yet. Ubers work remains unfinished, but its mission is an important one. Lets hope that Kalanick can recognize that this requires a bit more maturity, dignity, and tact; that by sharing his prosperity with the drivers who are helping him build this new infrastructure, he can avoid the label robber baron; and that he will come sooner rather than later to put the welfare of others before that of his ambitions.

About Author

Vivek Wadhwa is Vice President of Innovation and Research at Singularity University; Fellow, Arthur & Toni Rembe Rock Center for Corporate Governance, Stanford University; Director of Research at the Center for Entrepreneurship and Research Commercialization at the Pratt School of Engineering, Duke University; and distinguished visiting scholar, Halle Institute of Global Learning, Emory University. He is author of ”The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent”–which was named by The Economist as a Book of the Year of 2012. Wadhwa oversees the academic programs at Singularity University, which educates a select group of leaders about the exponentially growing technologies that are soon going to change our world. These advances—in fields such as robotics, A.I., computing, synthetic biology, 3D printing, medicine, and nanomaterials—are making it possible for small teams to do what was once possible only for governments and large corporations to do: solve the grand challenges in education, water, food, shelter, health, and security.

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