Why Uber can no longer hide behind the fuzzy warmth of the 'sharing economy'

Laurence, CEO

This article originally appeared in The Drum.

Uber is the ultimate guilty pleasure. Like all Uber customers, I love the convenience and value but I am acutely aware of the unethical stench around the brand.

Its executives appear to be assholes by their own admission; they threaten female journalists, their platform has created another unsafe environment for lone women around the world, they lobby politicians to ride roughshod over established livelihoods. And now their drivers are turning on them.

Just over a week ago, Uber drivers in London won a crucial legal battle after a tribunal ruled they are ‘workers’ who are entitled to the minimum wage and holiday pay. Judge Anthony Snelson, who led the three-person tribunal panel, was robust in his critique.

The notion that Uber in London is a mosaic of 30,000 small businesses linked by a common 'platform' is, to our minds, faintly ridiculous.

He added that any organisation resorting in “its documentation to fictions, twisted language and even brand new terminology, merits, we think, a degree of scepticism”.

Uber, which has about 40,000 drivers in the UK, said it plans to appeal against the ruling. But it is not the first-time Uber has been involved in lawsuits over the employment status of its drivers. In April, a Californian court ordered it to pay a $100m settlement to almost 400,000 drivers in California and Massachusetts.

Uber could be forgiven for thinking that, until now, the strength of its service would allow it to get away with all this douchebaggery. The sheen of a Silicon Valley unicorn and the positive associations with the ‘sharing economy’, coupled with consumers’ desire for their service continues to outshine the negatives.

However, as last week’s ruling shows, the tide is turning. It is exciting and relieving to witness the checks and balances we have designed into our society asserting their influence.

Capitalism will always create new business models with novel relationships between businesses and their stakeholders. True to their test-and-learn mentality, companies like Uber are making the game up as they go along.

Our governments and judiciaries are very publicly making sure they play nicely. In doing so, they are clarifying a distinction between the true sharing economy (where brands enable people to share their capital, like Olio sharing unused food) and the gig economy where companies create platforms enabling people to sell their own labour.

And with this, public opinion will shift. Consumers are becoming increasingly savvy and care more about the corporate reputations behind the brands they use. Brands like P&G and Unilever are spending more talking directly to consumer.

Consumers are becoming more aware of the web of influence and responsibilities that brands have (as seen in the recent Unilever vs Tesco spat). Much has been written about the stakeholder theory of management, in which companies succeed by taking responsibility for all stakeholders, not just financial shareholders.

Our own research for the Brand Experience Index shows that a brand can’t succeed by only solving people’s problems (the ‘do’ facet). Increasingly, brands must be clear on their purpose and values (think) and care about the emotional associations they create (feel).

Some of the new disruptive companies are already evolving their business practices. Through activities such as its community commitment, Airbnb is managing to keep the best of its business model, while encouraging its stakeholders to act more responsibly.

Uber is currently around 50-66% cheaper than London’s black cabs. If this period of negotiation results in a service that costs a little more, but doesn’t come with added guilt, everyone would win. It would be lovely to arrive seamlessly at my next destination without a nasty taste in my mouth.