Uber's CEO: Innovators Shouldn't Have To Ask For Permission Or Forgiveness
from the just-innovate dept
We’ve written a bunch about the disruptively innovative transportation company Uber, which has been running into regulatory issues with multiple local regulators. Andy Kessler recently had a fantastic interview with Travis Kalanick, Uber’s CEO, concerning the regulatory battles he keeps running into. If you’ve followed Uber over time, very little in the interview will be surprising. It tells of Kalanick’s past — he was sued for $250 billion at one point for running Scour.com, an early file sharing site — but also of his belief that these regulations are protectionism for legacy industries.
One bit that struck me however, was his response to Kessler posing an expected question concerning Uber’s penchant for launching first and dealing with the regulatory fallout later (well, and reaping the publicity rewards of complaining about being stifled by regulations):
When I suggest to Mr. Kalanick that Uber, in the fine startup tradition, was using the “don’t ask for permission, beg for forgiveness” approach, he interrupts the question halfway through. “We don’t have to beg for forgiveness because we are legal,” he says. “But there’s been so much corruption and so much cronyism in the taxi industry and so much regulatory capture that if you ask for permission upfront for something that’s already legal, you’ll never get it. There’s no upside to them.”
I think this is actually pretty important. There’s been plenty of talk about the importance of permissionless innovation and permissionless creativity. That is very important. But, somehow, we rarely talk about the flipside, which is that those engaged in creating wonderful and innovative things also should be proud of what they’re doing, rather than feeling like they need to ask forgiveness for upsetting the apple cart. Disruption is a messy business, but in the end it creates tremendous benefits for nearly everyone (except those who relied on the old way, and refused to change). It’s great to see a company like Uber leading the way.
Filed Under: forgiveness, innovation, permission, travis kalanick
Companies: uber
Comments on “Uber's CEO: Innovators Shouldn't Have To Ask For Permission Or Forgiveness”
The established power is always hard to crack regardless of where it is (economical, political, territorial etc). Sometimes you’ll see violent conflicts to break down those powers and allow innovation. Other times they’ll simply break under the weight of their own incompetency to evolve with times. This is but a symptom of a larger problem with our very Governments. It was fairly hard to break the power of the old aristocracy and form the current Governments. Then these fruits of such innovation have become old, enshrined in the power and they forgot their origins, they let themselves be corrupted.
I’m not sure how things will develop but it’s quite clear that a minority has captured each and every sector of our current society. And thus we’ve reached a barrier, we’ve become stagnant or at least we (and I mean we generically speaking) are evolving much slower than our potential.
How can it be fixed?
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You are asking how can the entrenched powers be convinced to give up their powers. Probably only through a sever crisis, and hope it does not cause a violent revolution. The only example of voluntary giving up of power I know of was the resignation of the Japanese shogunate when they realised that they could not deal with the influence of the west.
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For some reason this reminds me of Animal Farm.
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A completely Open and Free peer-to-peer mesh network of all devices able to transmit data.
If Uber had timidly asked if the legacy players would let them on the playground, we’d be saying Uber who??
The huge splash they have made time and time again in the media, followed by politicians making claims that are just completely detached from reality and show the public the emperor is naked and is deep in the pocket of the legacy players.
The legacy players are completely terrified of Uber, and I like it. They might need to look at updating their model to appeal to people who prefer the Uber model, rather than forcing the world to adapt to how it was done 50 years ago… there is a couple other industries that could benefit from this… the acronyms escape me for the moment.
Giving consumers a real choice is always a good thing, look at what the cable co did in the land of Google Fiber… much faster speeds, much lower prices… but only in that market because they fear the loss of the market.
Once people taste the freedom that fiber can give they will be unable to claim cord cutters aren’t real.
I just wish more places would ask/beg/bribe Google to come and wire the neighborhood.
Established power, or?
For a critical take on Uber’s business model, check out Tom Slee’s rant against “Peer-to-peer hucksterism”
Choice quote:
Re: Established power, or?
Well, everything that article finds wrong in Uber and AirBnB could be addressed with openness and transparency. Those companies try to become billion-dollar-businesses instead of offering the most honest services technically possible.
Fare prices can vary? The fare price should be displayed at the time you book it, so if there are several Ubercabs near you, you order the cheapest.
Accountability? Log everything in the client and the cab’s devices, and there are known ways to prevent/detect/correct data tampering. Then users should be able to comment and rate the cab they used.
Same for renting rooms. Rate, photos, comments, you should see a maximum of information about the service before you buy it.
But those features are good for the customer, and bad for the middleman, who tries to gross as much money as possible. So they’re not really serving the public well, because if, say, a driver eats every twelfth passenger, then Uber might decide to hide that, to keep it open for business.
That’s why those services can’t work as companies, only as Free/Libre/Open things that live on the Internet. They’re not just comunities, nor just software. It’s the use that makes them. Maybe the right word is network. Just a network, with a special purpose : cache information between people buying and selling one service.
Re: Established power, or?
Very interesting. I’ve always been a bit uneasy with the stuff I hear about Uber and their business model. Seeing that it’s run by an Ayn Rand-worshipper brings a lot of clarity to that. It’s hard to think of another person in American history who has caused more harm, more damage, and more outright evil, in America and throughout the world, than her.
Re: Re: Established power, or?
Wow… I’ve no idea where that came from. I’ve heard that name, but cannot connect it with a single instance of actual harm, damage or evil. Care to elaborate?
Re: Re: Re: Established power, or?
Well, for starters, just about every single horrible, evil, abusive thing you’ve heard of happening in the last few decades in the name of “capitalism” can be laid at her feet.
Adam Smith, the father of capitalism, was actually a moralist first and an economist second. His work was heavily concerned with not only finding efficient ways to manage an economy, but also with ensuring that they were good ways, in the moral sense. Read his work sometime, look carefully at the ideas he espouses, and ask yourself, “would a person promoting this policy today be accused of being pro-communism by modern ‘capitalists’?” and you’ll be surprised how often the answer is yes.
What changed? Ayn Rand got published. She took what’s essentially The Philosophy of the Two-Year-Old and wrapped it in a bunch of eloquent, romantic words to make it look like a worthwhile moral compass. (Seriously. Look at how much of her philosophy can, without exaggeration or hyperbole, be summed up in the words “I don’t want to and you can’t make me!”) And the heroic ideal that she held up as a model, an ideal path to be followed, was drawn heavily from the character of a sociopathic murderer who she idolized. (See http://michaelprescott.freeservers.com/romancing-the-stone-cold.html for details, since actual links posted in comments tend to get caught in the spam trap here.)
If you want to see why capitalism changed from the moral system proposed by Smith to the ugly, cruel monster we see today that remains capitalism in name only, where narcissism is the highest virtue and the system rewards and encourages people to act like sociopaths, you need look no further than Ayn Rand’s influence. It’s rather telling that the Library of Congress’s study on the most influential books on American thought found the Bible in #1, and Atlas Shrugged a close second.
It’s hard to think of another person in American history who has caused more harm, more damage, and more outright evil, in America and throughout the world, than her.
Re: Re: Re:2 Established power, or?
If you want to see why capitalism changed from the moral system proposed by Smith to the ugly, cruel monster we see today that remains capitalism in name only, where narcissism is the highest virtue and the system rewards and encourages people to act like sociopaths, you need look no further than Ayn Rand’s influence.
I’ve never been a fan.
Re: Re: Re:2 Established power, or?
Also, Rand’s vision of how the world should be is not a universally accepted vision.
P2P Foundation’s blog: “The Commons as a New Paradigm for Governance, Economics and Policy”: “Here in Europe, there is a burgeoning interest in the commons as a vision and framework for remaking political culture and everyday life.”
Imagine if actors had to ask for permission from the Actor’s Guild in order to act in a movie, if independent filmmakers had to ask for Hollywood’s permission to create and release films, if musicians outside of a label or music society’s umbrella needed the seek the latter’s permission, if software developers had to kowtow to Microsoft and Apple and video game developers needed Nintendo, Sony and Microsoft’s go-ahead.
Unfortunately for Uber, they have the misfortune of trying to run their business in a heavily-regulated and monopolized industry. Their story exemplifies why so much power in the hands of the few is so dangerous. If there were just one or two major companies in any particular field, the government will act to protect those interests against would-be competitors, because by the time that a company has such a (government-enforced) monopoly, they’ve practically become an outside branch of the government itself. Think Facebook.
NY, for example, guards their taxi cab services jealously — they’re viewed as a much-needed revenue generator. So if another cab service comes along, it would be eating away at their revenue (not to mention the monitoring system they’ve established). The state is going to act to protect their interests …and that means prevent competitors from gaining a foothold.
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Think Facebook.
You’re offering Facebook as a government-protected monopoly? There are WAY better examples out there. Facebook could vanish as quickly as MySpace did before it, and the government would (appropriately) do nothing.
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I guess you’re not aware of the onerous links between Facebook and government, how closely the latter monitors social media for political dissent and copyright infringement. Oh yeah, they paid a big fat zero in taxes. How’d they get away with that? And even if Facebook were to shut down tomorrow, another site would step up to fill the void.
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And even if Facebook were to shut down tomorrow, another site would step up to fill the void.
Yeah that’s kind of what I was saying. As for the government, I can certainly believe they’re way too cozy with Facebook, but that doesn’t mean the govt is protecting them from competition.
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Maybe not but they’re certainly protecting them by not making them pay any income taxes. Many other big businesses paid very little, whereas the American taxpayer didn’t have it so easy. It makes no sense that multi-billion dollar companies such as Facebook, GE, Apple, oil/gas companies, etc. pay such a low percentage.
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Maybe not but they’re certainly protecting them by not making them pay any income taxes. Many other big businesses paid very little, whereas the American taxpayer didn’t have it so easy. It makes no sense that multi-billion dollar companies such as Facebook, GE, Apple, oil/gas companies, etc. pay such a low percentage.
Maybe, maybe not. Many economists believe that the corporate income tax is a bad idea. But either way the corporate tax system we have now is clearly borked.
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“Imagine if actors had to ask for permission from the Actor’s Guild in order to act in a movie”
Why imagine what actually happens. Unless the movie does everything how the Guild wants they can bar people from appearing.
“if independent filmmakers had to ask for Hollywood’s permission to create and release films”
See ‘This Film is Not Yet Rated’.
“if musicians outside of a label or music society’s umbrella needed the seek the latter’s permission”
You’ve never looked at the DMCA takedowns sent to YouTube have you.
“if software developers had to kowtow to Microsoft and Apple”
App Store Approval anyone?
“video game developers needed Nintendo, Sony and Microsoft’s go-ahead”
But they have to.
While the government loves to spin a narrative about how things they do are for our own good, how is allowing the “market” to stagnate good for citizens? We know it works for corporations, they can offer the lowest possibly quality at the price they want to get… what will a consumer do use a competitor? There are none.
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Agreed. How in the world did the original post you’re replying to here get an Insightful flag?!?
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I think the 2nd portion of the post is insightful about the protectionism in the marketplace for legacy players.
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“Why imagine what actually happens. Unless the movie does everything how the Guild wants they can bar people from appearing.”
True, but only in Hollywood features.
“See ‘This Film is Not Yet Rated’.”
Applies only to theatrical releases. Yes, Hollywood may as well have a monopoly over theatres.
“You’ve never looked at the DMCA takedowns sent to YouTube have you.”
That’s actually copyfraud abuse. Still, independent musicians don’t need the labels’ permission in order to create and distribute their own music.
“App Store Approval anyone?”
Only if you’re using their walled garden.
“But they have to.”
Only if they want to release for one of the major platforms. The market is wide open, both for console and especially PC development. There’s nothing to prevent others from releasing their own consoles — in fact there’s going to be several alternatives to the big three this year.
However, now that you bring it up, it’s good to remember what happened when the console industry was dominated by Nintendo during the 8-bit era. Let’s just say they were very, uh, strict.
“While the government loves to spin a narrative about how things they do are for our own good, how is allowing the ‘market’ to stagnate good for citizens? We know it works for corporations, they can offer the lowest possibly quality at the price they want to get… what will a consumer do use a competitor? There are none.”
I never implied that it was good for the markets to stagnate. I’m in favor of Uber running their business in peace, but State-enforced monopoly continues to hamper their efforts, because the State wants to be in a position to control that revenue stream and set prices (read: price gouge).
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Yes, because the legitimate businessmen running Uber would never engage in price gouging, right?
Oh, wait, what’s that you say? They doubled their rates in NYC during the Hurricane Sandy evacuations, in violation of anti-gouging laws, and then tried to use Randian nonsense to make it appear as if they were doing a good thing and helping people by illegally ripping them off like that?
Oh well, so much for that theory.
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Oops, wrong link. Try this one.
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Is that so?
… Perhaps you need to do a little more research to back up your assumptions?
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Reminds m of that episode from Southpark where people start buying that one wheeled vehicle where you have to literally stick a thin in your arse and suck some other end with your mouth to operate it (also, it’s called IT). People say it’s uncomfortable and weird but it’s better than going with their shitty airlines. At some point Govt agents raid the IT company and seize everything saying the airlines generate jobs and money and they have to prevent them from failing.
Yeah.
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The sad thing is that the underlying basis for that episode is true.
As that great innovator Bernie Madoff said:
“Innovators Shouldn’t Have To Ask For Permission Or Forgiveness” — and he added, “the only problem is getting control of the regulators so they look the other way”.
Look, no one can argue with a truism, BUT now that you inform this guy ran “an early file sharing site”, it explains why you promote him and his pirate philosophy so much. You’re always promoting those who after quick and unearned riches. Okay, he may have mildly reformed since pirating, but he’s not letting go of the loot.
However, he’s simply saying that The Rich are entrenched and have an effective monopoly, just as I say in various phrasing. My conclusion is that only way to fight The Rich is by class war — they start and profit from it, while everyone else at most only gets them off our back — so we need societal attitude that sees The Rich as thieves and keep them from getting too much money and power. It’s as American an idea as was kicking out the inbred inherited entrenched tyrants back in 1776.
The way to do it in this case is with effective regulation, using the moral basis that the already Rich should have to pay increasingly steep fees to stay in (besides steeply progressive income taxes — and BTW, a key point is the difference between wages and income, the latter being unearned: if only there were an economist here who could and would explain that), anyway, new and small companies should be heavily favored in the regulation of this or any other biz.
BUT YET AGAIN, Mike complains but doesn’t have anything to propose.
Economic policy is QUITE easy if you keep in mind that The Rich are thieves and bullies. Suppress the entrenched interests and everyone else is freer.
Take a loopy tour of Techdirt.com! You always end up at same place!
http://techdirt.com/
Where arrogance meets ignorance to discuss what they’ll do with someone else’s 100 million dollar movie.
Re: As that great innovator Bernie Madoff said:
Unrelated to the article, but can I just say ‘thank you’ for your little ‘signatures’ at the bottom of your posts?
Soon as I see one of those I know you’re once more off the deep end, and can be safely ignored, saving me time, sanity, and potential annoyance.
So really, thanks for helping me and others by providing such an easy to spot ‘ignore me’ sign.
Re: Re: As that great innovator Bernie Madoff said:
What you said.
Re: As that great innovator Bernie Madoff said:
You never propose shit, yourself, you two-bit hack. All you ever do is down-cry the people that bring problems to the fore as if it’s their job to do more than shine a light on the problem. YOU are part of the problem, complaining that someone else needs to come up with a solution, do all the work for you. Get off your lazy ass and start using your brain for more than a cushion.
Greed isn't sustainable
And that’s as much for Uber as for the morons trying to prevent it from working/existing.
What regulations? What fines? You can’t prevent people from doing things. It would work like this: When you need a taxi, you flash a QR code that directs your smartphone browser to a webpage (which forwards the content, that’s actually on TOR or FreeNet or something) that locates you and tells you how far the nearest free taxi is, so you can order it to come pick you up.
But that’s not going to sustain Uber. It’s just going to help people do more things more efficiently. What’s that again? Oh, right, the definition of progress.
The State won’t let Uber do their things, so what, do them without Uber. DIRECT, distributed, encrypted, onion-routed, mesh-networked P2P between clients and merchants. The regulations prevent Uber from doing business as middleman, but they don’t prevent people from building the service such that the System just can’t shut it down.
Also, what’s preventing Uber from raising VC to buy the abolishment of those regulations? It’s not like the prices are unknown. If they want to play within the system, they need to buy the rules. It’s in the rules. So, play by the rules or change the game.
Cab Driving
I’ve made two abortive attempts in my life to drive a cab, and it is amazingly corrupt. A handful of people control the licensing, and rent for your cab in Austin, TX for example is $90.00/day or $60.00/12-hour-shift for a car they most likely bought wholesale from a wrecking yard and repaired – hardly the purpose of having these laws that require cabs to be late model cars.
Imagine what nice cars would be cruising around cabbing if not for the monopoly on licenses. $2700.00/month will buy a mighty fine ride.
Permission to innovate? WTF?!
If nothing else, the described scenario clearly demonstrates the need to perfect the art of asking for ex-post-facto forgiveness-with-extreme-prejudice when dealing with entrenched bureaucracies and their functionaries.
The cab industry obviously purports a ‘culture of intolerance’ with an entry lever beyond the average entrepreneur. In large cities like Chicago and NY the cabs are so ratty and unreliable that anyone who can afford it calls for a shared ride limousine. The limo business is so popular and cater to the more influential such that they even have their own special pick-up lane at the airports. (imagine the investment that took)
A limo driver faces much of the same problems of the cab driver in that they have to work 20 hour days to make good wages as an 8 hour day only makes the minimum. Its not unusual for a contract limo firm to have a small fleet of sedans and stretches with a close to or over a million miles on them.
I like the Uber business model where all the prices and fees are arranged before the ride. I can see where a corrupt cabbie cab firm would not like that as outright price gouging or indirectly via extended route abuse is not unusual.
Uber should also consider a shared limo ride option price comparison also. Possibly with some indication on how long the driver has been on duty (which will be impossible but its worth mentioning). I think Uber will find the regulatory atmosphere to be much clearer in the limo industry.
As for cutting out the middle man do not underestimate the value of an experienced travel agency in terms of planning the destination, method of route and purchasing the myriad of travel tickets. This is not the middleman being referred to (in the Uber article) but someone with value to add will find a way to insert themselves into the transaction its SOP. Hopefully value will drive the market.
Until ego gets in the way
What concerns me is when the disruptors/innovators then become the power block and fight to hold on to their positions.
Steve Jobs is a good example of a disruptor who didn’t want to be disrupted himself and was able to amass a legion of fanboys champion to his products based on an image.
I think when the little guys become powerful themselves, they then game the system to work in their favor. I would prefer to have a world of little guys rather than have an company/industry becoming too big, but the way we finance companies tends to reward companies that grow bigger and bigger and that absorb competitors and that stifle anything that might upset their control/ownership.
Re: Until ego gets in the way
I’ll go even further and would like to hear more people talk about how innovation will eliminate their own business models and how when that happens it will be time to disband their organizations and form new ones based on the new wave of innovation and disruption.
I do anticipate that will happen with Facebook. Google is getting into so many different businesses that maybe it will ride out the coming changes, though I am not sure why Google needs to remain Google. And Amazon seems also to be diversifying enough to survive the near future at least.
But we’ve seen Microsoft and Dell get left behind and Apple now appears to be at least a little vulnerable. I think all of that is good. Not because I had anything against any of them but it’s a good sign of evolution. It used to be admirable for companies to be “built to last” but now perhaps we can ask “why?” Is the corporate model the best one moving forward or can we look at organizations, ownership, and branding differently now?
Re: Re: Until ego gets in the way
Also, if you think about political revolutions throughout history, most of them overthrow the powers-that-be and then become powers-that-be themselves.
I think it’s in the nature of human beings to hang on to what they have when they get it, so I’d like to see more focus on how to avoid concentration of power/control/ownership. It’s a much bigger issue than upstart tech companies unsettling more established industries. When the tech companies get big enough they begin to resemble the companies/industries they displaced.
Re: Re: Until ego gets in the way
One thing that is especially good about the Kickstarter way to fund a project is that in most cases it is project-based, not company-based. You are asked to support a particular project rather than an on-going company.
If you like the team that created the first project, you might be inclined to support whatever else they come up with in the future, but for each Kickstarter project, the concept is defined and may or may not continue after the project has been completed. Everything can be disbanded after the offers are delivered, and the creators can go on to other things if they want. It also goes along with our increasingly freelance-based work force.
Re: Until ego gets in the way
Here’s just one example. If you have created a disruptive product that has a market, would you really need to complain about what one media outlet said about you? And are your potential customers so easily influenced that they won’t buy from you after one bad review? And isn’t it good to at least have your numbers right?
Ego can color decisions.
Elon Musk: The NYT Review Of The Model S Cost Tesla $100 Million – Business Insider: “In an interview with Bloomberg’s Betty Liu, he said the damage from the review could cost Tesla a hundred million dollars. Liu did some quick math and realized that would mean 1,000 cancelled orders for the Model S.
“Musk quickly clarified to say that it was ‘probably a few hundred,’ not a thousand. That’s still bad! He says the $100 million estimate is more around total value and brand damage.”
My favorite industrial book is a novel about the theory of (manufacturing) constraints: Dr. Eli Goldratt, The Goal, A Process of Ongoing Improvement. In its field it has quite the following. Although its written as a novel its taken as an underground bible for problem solving in the manufacturing industry.
Its common that the boss of a firm would pass out books to the whole department, have a meeting and ask pointed questions about it like: ?why the product(s) manufactured were never named? (the book wasn’t about any particular product but how it (anything) was made).
Its a great ‘just do what you think must be done because your boss wont let you before he gets the credit’ kind of thing. (kind of on topic, related?)
Ann Rand is still on the reading list, only got through the first few chapters its in the box of undead duds but I expect to pick up on it someday.
The future of disruptive technology
I like to speculate about a business environment where new technologies and new forms of manufacture and distribution come out so rapidly and are copied so quickly that the whole idea of putting together huge companies goes out the window. And if there is no opportunity to make a killing with an IPO, that changes the dynamics of the entire VC and financial industries.
I’d like to see small projects and small organizational groups become the norm, where as much as possible every consumer is his own source for his needs. And when he can’t do it in his own house, what he needs can be acquired locally or online without any middlemen taking a cut. I’d like to see property/business ownership flattened as much as possible. While some people may possess more expertise, training, and/or talent than others, if all of that is collectively shared, then whatever one person can do well benefits everyone and nearly instantaneously.
The Internet is allowing us the opportunity to replace some of the organizational benefits that once were held in-house in large organizations. But you still have companies such Facebook, Google, Amazon, and the like who want to amass that big data in-house rather than simply putting out in the public domain. Of course, as that data is accumulated, and if it is available for everyone to see, we have privacy and security issues which are being bigger problems by the day.
Re: The future of disruptive technology
Also, it seems that if you have a system that truly facilitates efficiency and sharing, there would be relatively little opportunity/reason for wealth accumulation and inequality. Competitive advantages would disappear as much as possible in the ideal system. Whatever develops in one place immediately becomes available in another. You would remove risk and misappropriation of everything if the system is fine-tuned enough.
You wouldn’t necessarily have to force people to share. You’d just create a system where sharing was immediately facilitated. Nothing left to arbitrage.
Re: Re: The future of disruptive technology
It’s fun to ponder disruptive technology eliminating economic classes.
One sided
With a taxi service there are other problems that are created. I think he needs to make sure he abides by the regulations as much as possible.
Complaining about it only for his publicity.