Tech

Shira Ovide is a Bloomberg Gadfly columnist covering technology. She previously was a reporter for the Wall Street Journal.

Please stop for a minute while you're reading the latest tales of Uber's spiraling crises. Uber is not one bad apple, led by a CEO whose behavior has uniquely bordered on the unconscionable. There is plenty of blame to go around. We have all created this monster. 

The public, the press, the people who work, invest in and care about technology. We have all created this monster. 

We in the press created this monster by glorifying CEOs for being willing to buck convention, push the envelope, trust their guts and believe in themselves no matter what the doubters say. We put people like that on magazine covers. And then those same qualities land CEOs on magazine covers when the convention-bucking and envelope-pushing shifts from being an asset to a liability.

This isn't only true of Travis Kalanick, the controversial Uber co-founder and CEO who is taking a leave of absence from the company. Steve Jobs more than sometimes embodied the quality of "Toe Stepping," as Uber has called one of its core values. I don't know where the line is between companies that break all the rules and grow up to become successful, healthy members of society, and the companies that break all the rules and simply break everything and everyone in their path. I don't even know which one Uber will turn out to be. But we have all created this monster.

The monster is also created when people who start technology companies are handed unprecedented power on silver platters by the people responsible for the companies’ existence. The investors in Uber agreed to allow Kalanick to have almost unchecked power in the form of stock that gives him more power than anyone else at the company and his board. These kinds of "founder-friendly" investment terms have grown commonplace. Is it any wonder that absolute power can corrupt absolutely?

Silicon Valley Geyser
Technology startups are collecting historically large sums from investors while they are still in the cradle
Source: PitchBook

No matter how many high-profile scandals there are at Uber, Theranos or Zenefits, don't bet on this founder power changing. That's because the unchecked power of some tech founders isn't a moral failure. It's a rational economic act. 

So much money sloshes around in Silicon Valley and other tech hotbeds because most people who have at least a little money to invest want a shot at the growth potential of the next Google. The supply of money chasing tech riches is much larger than the supply of truly promising young companies. Naturally, the money will do whatever it takes for a shot at backing the startup elite.

It's an odd position for the people with big checkbooks to cater to the power-hungry men and women -- but mostly men -- who are starting tech companies. But that's the reality, and it's easy to understand from the point of view of the people holding the checkbooks.  The potential windfall if Uber becomes one of the biggest companies in the world because it took a lot of risks far outweighs the downside of Uber flaming out because it took too many risks. We are all to blame.

And we have all created this monster because everyone who works for technology companies also has a vested interest in keeping the party going. It’s like the housing bubble in the 2000s. No one wants to be the first to say this seems wrong.

I don’t blame any tech worker for keeping quiet about problems at his or her company. That’s why the shake-up at Uber is all the more remarkable; it was kicked off by a single Uber employee who was brave enough to call out a rotten corporate culture. Even people who are powerful enough to be outspoken at tech companies or in their investor bases rarely do more than privately whisper about bad behavior or fudged financials at young tech companies. They almost never say it out loud. They created this monster, too.

And in case you're reading this and thinking you aren't to blame for any of this, you are. We in the public reward bad behavior, too. We might wince when we hear about the people who assemble iPhones working under grueling conditions. We might joke about Facebook's hoovering up all the data about us, even to the point of revealing who else is seeing our shrink. We might read with horror the stories about Amazon searching its warehouse employees on the way to work, or being so bruising that people regularly cry in the office.

No Damage
Uber's revenue continues to climb amid a series of high-profile controversies
Source: Bloomberg News reporting
Note: Uber's financial figures exclude the company's former business in China.

For the most part, however, we don't stop buying iPhones, surfing Facebook or shopping on Amazon. Nor, it seems, are people voting with their wallets about Uber. Bloomberg News has reported that Uber's stratospheric revenue growth has continued so far this year.  

Uber may move past the latest of its many crises without much of a scar. Or it might not. But let's remember that what happened at Uber isn't an accident. We allowed it to happen. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

  1. There may be stresses on Uber's business that aren't visible to outsiders, such as trouble keeping or retaining high-value employees, or drivers shifting to Uber rivals.

To contact the author of this story:
Shira Ovide in New York at sovide@bloomberg.net

To contact the editor responsible for this story:
Daniel Niemi at dniemi1@bloomberg.net