Does Travis Kalanick’s resignation from Uber spell trouble for the sharing economy?

Uber Releases Results Of Internal Sexual Harassment Investigation
Uber is losing money, and the shareholders who enabled Travis Kalanick for so long are finally losing patience (Source: Getty)

Does Travis Kalanick’s resignation from Uber spell trouble for the sharing economy?

Frank Pasquale, author of The Black Box Society: The Secret Algorithms That Control Money and Information, says YES

Gig workers were the first to realise something was up with the sharing economy. Promised flexibility and fair pay, they found their digital bosses were taking a bigger and bigger cut. Researchers exposed how misleading official pay figures were, because they didn't include costs like gas or insurance or car payments.

Then customers started to notice something. “Surge pricing” seemed arbitrary, and creepy tracking and rating practices shocked users.

Next, government woke up. Judges and regulators started to force firms like Uber to recognise that they were employers, not just software providers. Regulators discovered that many Airbnb properties were stealth hotels owned by the 0.1 per cent, not PR-friendly mom-trepreneurs.

But in late capitalism, workers, consumers, and regulators don't matter much. What’s damaging the “sharing economy” now are investor worries. Uber is losing money, and the shareholders who enabled Travis Kalanick for so long are finally losing patience. That’s what’s shaking up platform capitalism.

Read more: Uber chief executive Travis Kalanick has stepped down

Alex Deane, a Conservative commentator, says NO.

It’s almost a truism that charismatic individuals play vital leadership roles in business. But their significance can sometimes be overstated, inasmuch as, if the fundamentals are right, the business can not only survive but thrive without them. The most well known sharing economy businesses are now at a stage of maturity where this applies pretty much across the board. Like the rest of us, famous leaders are not indispensable: nobody’s bigger than the business.

The real challenges for sharing economy companies are reputational, regulatory and legislative, not leadership-based. Ultimately, their licence to operate in markets and the way that they are perceived matter more to the bottom line. They outdo many other startups because they generate revenue immediately, but they generate hostility and disruption to go with it.

Addressing this with strong reputation management, smart lobbying and demonstrable good behaviour (including to employees) matters more than whether a famous boss is on a panel, on TV, in print – or in post.

Read more: Is Uber chief Travis Kalanick right to take an indefinite leave of absence?

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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