The Silicon Valley morality escape clause

Posted 5 July 2017.

​By Simon Lendrum - Managing Director, J. Walter Thompson

​Endless commentary tells us that today, brands should stand for something good – it helps them stand out, millennials gravitate towards good corporations, and it’s the right thing to do post-GFC when everyone lost their moral compass.

By that reasoning, Uber should be up for sale on Trade Me with a dollar reserve. Here is a company where casual sexism has long been an issue; where data privacy has been an oxymoron; and where drivers are abused by the company, both by punitive practices and literally by the (now former) CEO himself. But Uber’s garage sale is far from a reality. Instead, valuations of the company are still in the US$50-$70bn range based on 2016 net revenue of US$6.5bn and continued growth in bookings – meaning a whole lot of people are prepared to ignore foibles such as sexual harassment if they get cheap cabs.

Why? Why does Uber get a free pass when the likes of United get swift punishment for poor behaviour?

There’s an argument that suggests Uber’s degenerate side has been protected through private ownership – had it been publicly listed we’d probably have seen more volatility in stock price as a consequence of each PR debacle. But I think there’s a Silicon Valley effect in play here too. It seems to me we have two sets of moral standards: one to which we expect ‘traditional’ businesses to adhere, and one that provides multiple escape clauses for tech companies. This double standard needs explanation.

Technology companies deliver products and services that garner excitement and attention. The 19th century thinker, James Allen, asserted that “there can be no progress nor achievement without sacrifice”. Silicon Valley seems to have embraced this with gusto. If the product or service is great enough, don’t worry about the side effects. The gig economy that Uber represents has run roughshod over concerns around employee rights and fair pay, with a Trump-esque approach to narrative.

Like-minded companies have even joined forces to ensure a consistent message supports their pursuits – The On-Demand Economy is a formal group established to ‘provide an unbiased platform to meet influential industry participants…discover, celebrate, and learn from this innovative new industry that is redefining commerce by making lives around the world easier and more convenient’. There’s a word missing there. In reality, it’s about making ‘some’ lives easier, whatever the consequences. Consumer demand for convenience is enormous and seems to override concerns about good corporate behaviour.

A similar defence appears at other Silicon Valley behemoths. Recent concerns around inappropriate content on social platforms, and placement of major brands alongside such content, is explained away as the cost of progress. We’re in a different time, the argument goes, and the vast content we all enjoy could not be possible if monitoring were universal. In short, if you’re expecting Google and Facebook to protect us from inappropriate usage, you’re a Luddite. This is simply the sacrifice we must make in exchange for the progress the tech giants deliver. The reality is that the vast majority embrace the good, and tacitly ignore the not-so-good, because we attribute a different set of rules to endeavours we see as transformative. But this should be no excuse for moral bankruptcy.

It’s nothing new, either. The British East India Company dominated trade in centuries past, providing rich resources to consumers and arguably re-shaping the world around it. Conversely, it also became synonymous with oppression, exploitation, and tyranny. Undoubtedly, those who benefited deemed such sacrifices worthwhile, but the cost to humanity was dear.

As the board of Uber implements changes recommended by a recent report into company practice, they would be well served to learn from the past. To ensure the business endures it must deliver value not only to its consumers, but also to employees, and the communities and economies within which it operates.

Establishing a brand purpose that goes beyond product description is critical. Doing so would provide a filter for behaviour, process and action that is sympathetic both to the profit motive and the desire for good corporate citizenry that would enable Uber to rise above the Silicon Valley bubble and be judged alongside other long-standing corporations in accountability and contribution to society.