Using the proliferation of newly GPS-enabled mobile devices to enable taxi hailing and beat out stagnant incumbent providers was always going to be a big win for consumers. It provided a better service than existing cabs were going to be able to do for at least several years—cutting out lots of unnecessary overhead in the system.
Had it been built differently, it could have been a better company and honestly I’d like to believe maybe even a more valuable one in the long term. Maybe it would have given up short term hypergrowth—but as the standard bearer, it could have helped the whole market get on this path, instead of just landgrabbing.
It could have championed fair pay and a national minimum wage—incorporating it into its brand. Would that have cut into its growth? Maybe—but in the long run it would have created happier drivers and a base of more loyal customers feeling better about their brand.
It could have made HR, diversity and employee experience a priority from the start. There’s no reason why a culture needs to fall apart at the seams in a hypergrowth startup. The damage done to the company’s brand do to internal scandals and mismanagement was an economic reality that was the result of really short term thinking.
It could have made accountability around driver behavior more of a priority, but instead it pulled out of cities that required higher levels of screening.
Instead, we got one of the most lucrative startup investments of all time from a company built off of a legion of drivers unable to make a living wage after expenses, without benefits, and not even classified as employees even when they work for the company for full time hours.
But, the VCs did their job—as designed. It’s a tricky subject, because VCs only exist to make money—not really to oversee the running of these companies as beneficial to the world, unless it gets so bad that it affects the economic outcome.
Not only that, we have other portfolio companies to worry about. So, the extent to which any one VC would be openly critical of another’s portfolio company or the investors behind it is limited by the fact that you’ve got other companies that need their late round money. I have a portfolio where 50% of the investments have founders that come from diverse backgrounds—and yes, I want them to get money from all of the still-active funds on Uber’s cap table that benefitted from the IPO.
So, the extent to which any one fund will call out the other funds on the cap table that sat quietly on the sidelines for three years after Sarah Lacy called the company out in 2014 is going to be somewhat limited. The company’s misogynist culture was well documented before Susan Fowler tipped the scales in 2017 and I don’t recall a single investor saying anything about it up to that point.
What if the early investors—some of whom had decades long reputations for being on the forefront of social issues—had made all of their companies sign diversity pledges and been active and public from day one instead of quiet for seven years? Perhaps I’m being too cynical, but when the problems get this big, I think I’d rather hear “I could have done more” than “I tried”.
Everyone is documenting through e-mail screenshots how they invested or didn’t invest in the early days of Uber—showing off their access to the early deal as a badge of honor, but where are the screenshots of the 2014, 2015 e-mails to the team showing their concern about the journalist harassment issues, driver earnings, or privacy concerns?
The too little too late around Ubers culture created a missed opportunity to build an empowering industry leader on social issues—because, at its core, matching drivers to more work is a good thing. Everyone could have done more and until we acknowledge that, this will keep happening.
What if all of the early investors in Uber had, as part of their criteria, a vetting of how serious the company was at creating a healthy culture and a company that would be an impact trendsetter—either because they believed that was the best way to create sustainable economic benefits, or because that was required of them by their investors?
That’s who really should be driving this—because that’s who the bosses of the VCs are. If all of these foundations and endowments that fund VCs start asking about what their social impact screens are, because they want to make sure their money is improving the world, VCs will start behaving differently.
What if the kind of portfolio diversity, became a sought out feature that LPs look for and not just a nice to have—not just from diverse managers, but from everyone? How many LPs are asking the top tier funds what they’re doing to enforce and oversee values and culture from a board perspective?
Does any fund that invested in Uber fear not being able to raise their next fund because their underlying companies might not perform well around these other criteria? Nope.
Until the underlying money starts shifting, we’re going to see more of the same—waiting until the problems get really bad, only calling things out when the cats are out of the bad and it’s politically safe to do so, and championing business models that come at the expense of workers and economic equality.