Even investor and media super-villain Peter Thiel has made fun of Silicon Valley power players’ tendency to invest in what they themselves like. “VCs often have a blind spot for things,” he said in 2014. “They overvalue things they use. They undervalue things they don’t use. Uber is overvalued because investors like riding in Town Cars.” (Thiel, for his part, invested in Uber’s rival, Lyft.)
But plenty of companies have experienced founders and do things VCs like. What set Uber apart—and the reason it generated the Uber-for-X phenomenon—was its marketplace model.
The company used computers to restructure the driving labor market (“corrects some real inefficiencies”). Why have a dispatcher send cabs all over a city when an algorithm could do the same thing—with no labor cost or organizational infrastructure, and probably with better results? The cab companies, with their own complex institutional histories, were suddenly irrelevant. Drivers drove and riders rode—and the only thing necessary to connect them was an app on a phone. The model didn’t just make financial sense to people trained to think in Silicon Valley in the 2000s; it made ideological sense.
While Uber’s app was obviating the need for cab companies, Kalanick (who would step down in June 2017 amid a company meltdown) turned the local taxi industry into the biggest lobbying bogeyman since Big Tobacco. A low-wage industry and its longtime institutions were labeled “trusts” and “cartels.” “My politics are: I’m a trustbuster. Very focused. And yeah, I’m pro-efficiency,” Kalanick told The Wall Street Journal. “It’s good for everybody, it’s not red or blue.”
With Kara Swisher at the Code conference, Kalanick was even more open. “We’re in this political campaign, and the candidate is Uber. And the opponent is an asshole named Taxi,” he said. The company tried to catalyze riders to contact their local officials telling them to allow Uber to operate, no matter the rules on the books; the effort was called Operation Rolling Thunder. “We have to bring out the truth about how dark and dangerous and evil the taxi side is,” he concluded.