Uber was the most valuable private company in history, but the public market has not been as enthusiastic. The reason explains a lot about how the tech industry works.
But some of it should go to Silicon Valley’s cultural divergence from the business reality. Investors loved the company not as an operating unit, but as an idea about how the world should be. Uber’s CEO was brash and would do whatever it took. His company’s attitude toward the government was dismissive and defiant. And its model of how society should work, especially how labor supply should meet consumer demand, valorized the individual, as if Milton Friedman’s dreams coalesced into a company. “It’s almost the perfect tech company, insofar as it allocates resources in the physical world and corrects some real inefficiencies,” the Uber investor Naval Ravikant told San Francisco magazine in 2014.
Robert Reich explains why Ayn Rand’s ideas have destroyed the common good.
Donald Trump once said he identified
with ayan rands character Howard Roark
in The Fountainhead an architect so
upset that a housing project he designed
didn’t meet specifications
he had it dynamited others in Trump
Circle were influenced by Rand Atlas
Shrugged was said to be the favorite
book of Rex Tillerson Trump Secretary of
State’s Randa also had a major influence
on Mike Pompeo from CIA chief Trump’s
first nominee for Secretary of Labor
Andrew Posner said he spent much of his
free time reading Rand the Republican
leader of the House of Representatives
required his staff to read Rams I grew
up reading Iran it inspired me so much
that it’s required waiting in my office
for all my interns of my staff Uber’s
founder and former CEO Travis kalanick
has described himself as a ran follower
before he was sacked he applied many of
her ideas to obras code of values and
even used the cover art for rands book
The Fountainhead as his Twitter avatar
so who is iron Rand and why does she
matter line Rand best known for two
highly popular novels still widely read
today The Fountainhead
published in 1943 an Atlas Shrugged
in 1957 didn’t believe there was a
common good she wrote that selfishness
is a virtue an altruism an evil that
destroys nations when Rand offered these
ideas they seemed quaint
if not far-fetched anyone who lived
through the prior half-century witnessed
our interdependence through depression
and war and after the war we used our
seemingly boundless prosperity to
finance all sorts of public goods
schools and universities a national
highway system and health care for the
Aged and poor we rebuilt war-torn Europe
we sought to guarantee the civil rights
and voting rights of African Americans
we open doors of opportunity to women
of course there was a common good we
were living it
but then starting in the late 1970s
rands views gained ground she became the
intellectual godmother of modern-day
American conservatism this utter
selfishness this contempt for the public
this win at any cost mentality is it
roading American life without adherence
to a set of common notions about right
and wrong we’re living in a jungle where
only the strongest cleverest and most
unscrupulous get ahead and where
everyone must be wary in order to
survive this is not a society it’s not
even a civilization because there’s no
civility at its core it’s a disaster in
other words we have to understand who I
am Rand is so we can reject her
philosophy and dedicate ourselves to
rebuilding the common good the idea of
the common good was once widely
understood and accepted in America I
mean after all the US Constitution was
designed for We the People seeking to
promote the general welfare not for me
the selfish jerk seeking as much wealth
and power as possible yet today you find
growing evidence of its loss
- CEOs who
couch their customers loot their
corporations into fraud investors
- lawyers and accountants who look the
other way when corporate clients play
fast and loose
- who even collude with
them to skirt the law
- Wall Street
bankers who defraud customers and investors
- film producers and publicists
who choose not to see that a powerful
movie mogul they depend on is sexually
harassing and abusing young women
- politicians who take donations really
bribes from wealthy donors and corporations to enact laws their patrons
- shudder the government when they
don’t get the partisan results they seek
- president of the United States who
repeatedly lies about important issues
refuses to put his financial holdings
into a blind trust and then personally
profits off his office and Momence
racial and ethnic
conflict the common good consists of our
shared values about what we owe one
another as citizens or bound together in
the same society a concern for the
common good keeping the common good in
mind is a moral attitude it recognizes
that we’re all in it together if there
is no common good
there is no society
Uber was just weeks away from its initial public offering. After years of scandal, infighting and user revolt, this was supposed to be a $91 billion moment of triumph, when employees would become wealthy and the public could buy a piece of an indisputably world-changing company. The problem for Mr. Khosrowshahi, according to two people briefed on the matter, was that Mr. Kalanick wanted to be there.
As a former C.E.O. and current board member, Mr. Kalanick had asked to take part in the hallowed New York Stock Exchange tradition of ringing the opening bell on May 10, the day Uber shares are slated to begin trading. He also wanted to bring his father, Donald Kalanick. It would be close to the second anniversary of the accidental death of Travis Kalanick’s mother, and of the dramatic boardroom coup that ousted him as boss. His presence on the exchange’s iconic balcony could make both Mr. Kalanick and the corporation appear resilient.
Mr. Khosrowshahi wasn’t having it. The original plan was to fill the rafters with Uber’s earliest employees and longest tenured drivers. Moreover, some people at the top of the company felt that Mr. Kalanick was still a toxic liability, and that Uber should keep him at maximum distance as it tried to convince constituents that employees truly abided by a new motto: “Do the right thing. Period.” Mr. Kalanick’s appearance would unavoidably rekindle public memories of just howmuch of a disaster his final year was.
Besides, Mr. Khosrowshahi had bigger things to worry about than I.P.O. pageantry. Uber is losing billions of dollars annually, and he needs to convince investors that it is a promising, long-term company — even if it won’t be turning a profit anytime soon. He didn’t need the distraction at Uber’s financial coming-out party. On May 3, shortly after this article was first published online, Mr. Khosrowshahi decided Mr. Kalanick wasn’t welcome on the balcony, according to an Uber executive briefed on the plans.
The C.E.O. wants to prove that the start-up has evolved past Mr. Kalanick’s raucous, tech-bro culture — and his strategy of setting barrels of money aflame in the pursuit of growth above all else. But Uber’s past, to state the obvious about a company that is only a decade old, is simply not that far gone. Almost every instance of Mr. Kalanick’s bare-knuckled approach to capitalism illuminates something about Uber’s viability as a business today.
.. The company has little good will with consumers or regulators in multiple jurisdictions. And Uber still loses money on nearly every fare, using venture capital to subsidize rides, invest in new areas and beat back a set of global competitors that offer an essentially identical service.
Mr. Kalanick’s heavy reliance on venture funding could be problematic for a public Uber in at least two ways. Arguably, it instilled habits of indiscipline, because executives could simply ask for more money whenever they wanted it, like rich kids with no cap on their allowance.
Virgin founder Richard Branson announced he was pulling out of talks on a $1 billion deal with Saudi Arabia over the killing of a Washington Post columnist. State involvement in the killing, “if proved true, would clearly change the ability of any of us in the West to do business with the Saudi government,” Mr. Branson said.
Days later in a text message, Mr. Branson counseled the Saudi crown prince, Mohammed bin Salman, to release female activists his country had imprisoned.
“If you were to pardon these women and a number of men too, it would show the world the Government is truly moving into the 21stCentury,” Mr. Branson texted the crown prince. “It won’t change what happened in Turkey but it would go a long way to start and change people’s view.”
Mr. Branson was one of the first in a parade of CEOs, fund managers and bankers who scrambled to figure out how to preserve their relationships with Prince Mohammed after the murder of the journalist Jamal Khashoggi in Saudi Arabia’s Istanbul embassy in the fall.
Mr. Branson urged Prince Mohammed to change his ways. Others adopted a dual strategy of public condemnation while trying to continue to do business as usual. Some shunned the formality of Saudi Arabia’s high-profile investment conference but pursued informal gatherings instead.
The reason: Many have tied their companies’ future to Saudi money and Crown Prince Mohammed’s wide-ranging economic overhauls.
“This whole Khashoggi thing doesn’t mean anything,” said hedge-fund manager John Burbank, who has been one of the U.S.’s most prominent investors in Saudi stocks. “It means much less than the big, sweeping liberalization that’s happening in the kingdom.”
MBS, as Prince Mohammed is known, politely thanked Mr. Branson for his input. A few days later, the crown prince publicly denied involvement in the murder, calling it a heinous crime. The U.S. Central Intelligence Agency has since concluded that he likely ordered the killing.
American investors in Saudi stocks, besides Mr. Burbank, include Peter Thiel and hedge fund Bienville Capital Management, among others. Roughly 4% of the total Saudi market is held by foreigners.
“One person’s life doesn’t matter unless it’s MBS’s,” Mr. Burbank says. “Khashoggi doesn’t matter.” He adds that investors who have steered away from Saudi Arabia are hypocrites, because some of them also invest in Russia and Turkey.
Mr. Burbank was among the dozens of Western executives and investors who showed up at the home of Yasir al Rumayyan—chairman of Saudi Arabia’s sovereign Public Investment Fund, which the crown prince oversees—on the eve of the investor conference in October. Over platters piled high with roast lamb, towers of sweets in golden birdcages and champagne flutes of fruit juice, they toasted their relationship beneath palm trees tinted by purple spotlights, attendees said.
SoftBank CEO Masayoshi Son backed out of the conference, but he still showed up at the lamb feast. Uber CEO Dara Khosrowshahi also pulled out of the conference, but Uber co-founder and board member Travis Kalanick was at the party, along with former congressman and current banker Eric Cantor and his boss, banker Ken Moelis, and venture capitalist Jim Breyer. Thiel Capital portfolio manager John MacMahon also appeared at the dinner, and the chief executive of Silicon Valley construction startup Katerra, Michael Marks, attended the investment conference.
Matt Barnard, the CEO of Plenty—an indoor-farming startup with $200 million in backing from a Saudi-backed SoftBank fund—flew to Saudi Arabia for the conference. But he returned home without attending, a Plenty spokeswoman says.
The cost of shunning Saudi Arabia could be high. Some business partners fear losing access to the kingdom in the future if they pull out of Saudi deals now.
Ari Emanuel, the CEO of Hollywood talent agency Endeavor, is negotiating to return a $400 million investment that the Saudi sovereign-wealth fund made in his company earlier this year, people familiar with the company’s plan say.
In the wake of Mr. Khashoggi’s disappearance, Mr. Emanuel said he was “really concerned about it.”
.. “Were there mistakes made? Absolutely there were mistakes made,” said Matt Michelsen, an associate of John Burbank and a Silicon Valley investor. “But this place is changing. I saw Starbucks opening on multiple corners. There are women walking around without abayas. It’s a fundamental shift that’s occurred.”