Collateral Damage: Company Beware

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Posted on February 8, 2017

Unless you spent the last week hiding under a rock, you’re quite familiar with Trump’s executive order banning travellers from seven Muslim-majority countries. People much more articulate than me have opined on the many problems and ethical issues with Trump’s EO. But while individuals and specific groups were the intended target of Trump’s EO, businesses are learning that no one — and no company — can escape Trump’s shrapnel, even if their business has no direct relationship to the policy in question. As more and more corporate boards turn their focus to risk management practices, it appears the President of the United States is creating a whole new practice area. Companies that don’t tread carefully could emerge with a bloody nose, or reputational damage.

Case in point: Uber.

On January 30, 2017, thousands of protesters across the U.S. flooded airports to speak out against Trump’s EO. The New York Taxi Workers Alliance tweeted its support for the protests, calling on all drivers to avoid JFK Airport between 6-7pm. The Alliance pointed out the heightened level of personal risk its largely Muslim workforce faced as a result of Trump’s sanctioned bigotry.

Ninety minutes later, Uber tweeted that it had ‘turned off’ surge pricing at JFK, warning its followers that this could result in longer wait times.

Now, let’s give Uber the benefit of the doubt for a moment.

It’s quite possible Uber saw a business opportunity, and wanted to engender gratitude from its customers. Done well, Uber would be the white knight coming in to save the day for stranded travellers. If that was the intent, the execution was tone-deaf, and as a result, the reaction swift and brutal.

Within minutes the #DeleteUber hashtag took, with people sharing screenshots confirming they were deleting the app.

Clearly, Uber’s evil, right? Not so fast.

If you believe an Uber spokesperson, ‘the decision to turn off surge pricing was made specifically to avoid profiting from increased demand during the protest. The company has previously made a similar commitment to limiting surge pricing during disasters, after being accused of taking advantage of riders in times of need.’

It would appear things are greyer than they first seemed.

They get greyer still, when you consider this piece of information: hours before Uber removed surge pricing at JFK, its CEO, Travis Kalanick sent an email to all Uber employees. The subject? ‘Standing up for what’s right’. Here are some salient passages from that email:

This order has far broader implications as it also affects thousands of drivers who use Uber and come from the listed countries, many of whom take long breaks to go back home to see their extended family. These drivers currently outside of the U.S. will not be able to get back into the country for 90 days. That means they will not be able to earn a living and support their families—and of course they will be separated from their loved ones during that time.

We are working out a process to identify these drivers and compensate them pro bono during the next three months to help mitigate some of the financial stress and complications with supporting their families and putting food on the table.

While every government has their own immigration controls, allowing people from all around the world to come here and make America their home has largely been the U.S.’s policy since its founding. That means this ban will impact many innocent people—an issue that I will raise this coming Friday when I go to Washington for President Trump’s first business advisory group meeting.

Which goes to show, that in this hyper-connected world, anger is the emotion that spreads most. We want and assume the worst in everyone, and especially in big companies. Of course, Kalanick has been criticized for joining Trump’s business advisory group, but as we see in his all-staff email, rare is an issue as binary as we interpret it online. Unfortunately, that’s the world we operate in. As soon as a crisis erupts, the company is the villain, guilty until proven innocent. Days after this crisis erupted, and days after Uber clarified its position, people continued to post screenshots showing them deleting Uber from their phones.

As Kalanick discovered, Trump can be bad for business. Within three days of the crisis, with #DeleteUber still a hot meme, Kalanick sent a follow-up memo to his employees announcing that he was leaving the President’s advisory council, making it clear that he and his company did not want to tacitly support the ban. Here’s the full text of his memo:

Earlier today I spoke briefly with the President about the immigration executive order and its issues for our community. I also let him know that I would not be able to participate on his economic council. Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that. I spent a lot of time thinking about this and mapping it to our values. There are a couple that are particularly relevant:

Inside Out – The implicit assumption that Uber (or I) was somehow endorsing the Administration’s agenda has created a perception-reality gap between who people think we are, and who we actually are.

Just Change – We must believe that the actions we take ultimately move the ball forward. There are many ways we will continue to advocate for just change on immigration but staying on the council was going to get in the way of that. The executive order is hurting many people in communities all across America. Families are being separated, people are stranded overseas and there’s a growing fear the U.S. is no longer a place that welcomes immigrants.

Immigration and openness to refugees is an important part of our country’s success and quite honestly to Uber’s. I am incredibly proud to work directly with people like Thuan and Emil, both of whom were refugees who came here to build a better life for themselves. I know it has been a tough week for many of you and your families, as well as many thousands of drivers whose stories are heartfelt and heart-wrenching.

Please know, 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. We will fight for the rights of immigrants in our communities so that each of us can be who we are with optimism and hope for the future.

Travis

As Travis learned the hard way, more than ever, companies need to be in tune with, and attuned to the political sensitives of the markets in which they operate. It’s not enough to ask, ‘is this a good business decision?’ Now, to avoid scandal, or to avoid getting sucked into Trump’s orbit, companies need to ask ‘is this a good political decision?’ Companies need to game out the likely scenarios of its business decisions in the political climate. The consequences often cut deep. The business suffers if it makes the wrong political decision. In truth, we live in a world where walking back a bad decision is becoming nearly impossible. Politics has long been a bloody sport, and increasingly businesses are getting bloody noses by not being attuned to the political realities of the markets they operate in.

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