There’s no doubt about it—new President Donald Trump’s executive orders caused more than a few dust-ups during his first days in the oval office. His immigration executive order banning travel from 7 countries caused mass protests throughout the United States. Many visa holders and even green card holders were detained at airports, unsure of whether they would be allowed to enter the country. As these incidents occurred, businesses were being held accountable more and more for their political “support.” However, the developments in the immigration ban forced two popular ride-sharing companies, Uber and Lyft, to consider lessons on social responsibility and how it is linked to business success.
Taxi drivers in New York temporarily stopped service to JFK airport during rush hours, to stand in solidarity with the detainees around the country being questioned by Homeland Security. In response, Uber stopped charging surge pricing and continued to send drivers to the airport, a move many people saw as a direct attack on the taxi association’s efforts, and an indication that Uber did not care about the plight of detainees. Despite Uber’s insistence that the move was not political or for increased profit, nor that it was meant to undermine the taxi strike, many, many former users deleted the app and flocked to the company’s biggest competitor, Lyft. Lyft catapulted up the free app rankings in the Apple App store, landing at #4, while Uber dropped to #13. Uber’s competitor cashed in on public outcry—without having to do much themselves.
Are lessons on Social Responsibility Really Possible?
Uber had to scramble in the wake of this boycott. The company never had a sterling reputation. That backlash prompted mass account deletions, spurred by the #DeleteUber movement. In response, Uber’s CEO backed away from Trump’s economic advisory council and denounced the travel ban. He then set aside a $3 million fund to help drivers affected by the ban. Uber still had a long way to go to regain the trust of many of its users. As you can tell, backtracking doesn’t usually go over well.
Unfortunately for protesters, however, being socially responsible is murkier than it looks. While users had been flocking to Lyft for an Uber alternative (praising the company’s $1 million donations to ACLU, non-profit fighting the order in court), higher-ups in the company had ties that flew in the face of protesters’ values. Many did not believe Uber’s ultimate stand against the executive order. It bears noting that one of Lyft’s major investors, billionaire Carl Icahn, was a Trump supporter. He was also one of his advisors. He’s was not the only Trump supporter making money off of Lyft’s success either.
This begs the question: are lessons on social responsibility really possible, especially for businesses? Organizations are made up of all kinds of advisors, philanthropists, processes, and contributors, who might not all line up with the values consumers are looking for in a company. Whether it’s fair or not, most people agree that businesses should generally try to do the right thing. This does differ depending on who you talk to. Judgements can and do affect a business’s reputation, making social responsibility concern for every organization.
In the short term, the trending hashtag compelled 200,000 users to delete the app. In the end, that might not have made a difference at all. Backpedaling didn’t help the company, but they dominated the market so thoroughly that the movement did not have a lasting effect on Uber’s business. Reputations can recover, but it took a while for the trigger to fade from consumers’ memories.
What Businesses Can Learn
So what lessons were learned from Uber’s shaken reputation and Lyft’s rise? That businesses need to carefully consider their stance on any given issue—and be prepared to accept the consequences of expressing that opinion. There is no way for any organization to stay completely neutral. There will always be people who disagree with the executives who run them. However, businesses need to face facts: social responsibility matters in this day and age, for businesses and individuals alike. Remember your business will be judged on how it reacts to a political or social movement. Remember, the judgment of the Internet can go viral in an instant—and punishment will be swift.
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Andrew Deen has been a consultant for startups in almost every industry from retail to medical devices and everything in between. He is currently writing a book about scaling up business and his experience implementing lean methodology.