Uber’s disruptive business model enables drivers to work as independent contractors. Drivers use their own cars and set their own hours, providing more flexibility and less overhead compared to traditional taxi services. Because it’s typically cheaper for consumers and, due to its app, more accessible than other car services, Uber has rapidly become a global phenomenon.
However, Uber’s ascendancy hasn’t been free of backlash. Since the start of 2017, Uber has been targeted by Twitter activism, particularly through the online campaign #DeleteUber. This pressure has helped reveal an increasing number of problems at the company—and has helped lead to the resignation of Uber’s founder and CEO, Travis Kalanick.
Channeling Initial Outrage
According to the New York Times, the #DeleteUber movement began on January 27, 2017, after President Donald Trump issued an executive order suspending entry into the United States for refugees and citizens from seven predominantly Muslim countries. In response, protests began at major airports around the country. NY Taxi Workers, a taxi drivers’ union, announced a work stoppage to protest the executive order, refusing to pick up passengers at JFK Airport between 6:00 and 7:00 p.m. This action enabled drivers to join the protest.
Normally, this would lead to an increase in demand for Uber, which in turn would increase Uber’s prices. Instead, Uber turned off its surge pricing and announced on Twitter that it was doing so. Almost immediately, a Twitter user named @Bro_Pair saw Uber’s announcement, surmised that Uber was trying to capitalize on the taxi drivers’ work stoppage—and thus on the travel ban—and posted a series of tweets including the hashtag #DeleteUber.
Uber’s management said that the decision to turn off surge pricing was not meant to undermine the union’s actions, but “but a notification to users that the company would not be increasing prices at a time of high demand,” according to the New York Times. However, many users either didn’t believe this claim or didn’t care.
The issue might have faded away if a former Uber employee, Susan J. Fowler, hadn’t published a blog post on February 19 detailing her experiences at Uber. According to Fowler, her first manager propositioned her for sex. When Fowler approached the human resources department, she was told that her boss was a high performer and that this was his first offense. She later found out that many women in the company had experienced similar incidents with the manager. Fowler’s story gave new life to the #DeleteUber movement.
Investors Join the Fray
The activism on Twitter inspired investors. Shortly after Fowler’s post, some of Uber’s investors raised public questions about the company’s behavior. Mitch and Freada Kapor wrote an open letter to their fellow board members and investors, saying that they were frustrated by the continued mistakes of Uber’s management and the ineffectiveness of trying to influence the company behind the scenes.
The couple are among the most influential investors in Silicon Valley, and their public statement forced the issue. Uber’s other investors and board members now had to respond.
Due to the attention that #DeleteUber brought to the company’s governance issues, a matter that might have remained confined to the business press received mainstream attention. Uber’s board of directors commissioned a study of management. Ultimately, as the Washington Post reported, then CEO Travis Kalanick resigned. This was partially prompted by a letter from five major shareholders to Kalanick asking for his resignation.
Making Private Matters Public
Activist investors often work behind the scenes. Especially at privately held companies, they may see no reason to make public their efforts to create change. And in some cases, private activism can be effective. But at Uber, it would seem, it was not.
Activism by the general public convinced investors to intervene with management behavior, even as Uber posted spectacular growth. Uber’s investors aren’t activist investors per se. But they recognized the importance of addressing ESG issues and demonstrated how investors and activists can use synergistic energy to promote change. Twitter activism and investor-led activism may continue to be driving forces in the push toward greater ESG performance.