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Does Being Ethically Challenged Matter in Silicon Valley? November 19, 2014

Posted by Peter Varhol in Technology and Culture.

Investor Peter Thiel offers the opinion that ride service Uber is Silicon Valley’s most ethically challenged company, even before one of the company’s executives was quoted as saying it might hire private detectives to find and publicize dirt on journalists who criticize its business practices (the company CEO eventually delivered an apology in 14 tweets, which is just plain silly).

According to various reports, Uber doesn’t play well with local and regional regulatory agencies, treats its drivers poorly, and plays various dirty tricks on competitors. To some extent, friction with a startup in a new market is likely to occur, whether because of a new business model (anyone remember the controversy caused by open source software before it became widely accepted?) or because of legal or regulatory limitations.

I will likely never use Uber, for a variety of reasons (such as not frequenting places it serves), and it certainly appears that the company breaks the boundaries of accepted good business practices and regulatory statutes. But I don’t think that will in any way drive whether or not it succeeds. Its success will be driven primarily by its being able to service customers (riders) in a fast, clean, and courteous environment.

Of course, the legal and regulatory environment plays an important role here (Uber remains banned in certain German cities), and the company’s legal arguments in response are pretty ridiculous (“The Hamburg court rejected Uber’s arguments that the ban violated Uber’s professional freedom or European freedom to offer services.”) But rather than claim an absolute right that doesn’t exist in society, why not work within the legal framework, or work with authorities in a collaborative way to adjust that framework and experiment with new models? The regulations exist for a reason, usually what was once a good reason, so it makes sense to bring about change without negating the law.

I’ll also opine that it seems like the company has intentionally cultivated an arrogant, likely inappropriate business atmosphere. It’s almost certainly not a place where I could work. But that probably only has a small, if any, impact on its probability of business success.



1. dgeaston - November 19, 2014

There is a lack of congruence between the ethics of “rockstar” businesses and founders and the branding of a new generation of socially oriented entrepreneurs who give as much as they take. Consider the norm of once you are in the door you can “pivot” yourself into unlimited deals and start-ups despite behaviors and failed businesses. The the silicon valley ecosystem is influenced by History, Culture and Context — all we have to do is retell the stories of the legends from garages and dorm rooms and research labs where the constraints of what is ethical and what is marginal is superseded by innovation, valuations, investments and sheer genius.But why should Silicon Valley be any different than Wall Street.

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