Uber and Lyft Are Dead (They Just Don’t Know It Yet)
$200 million + Dark Marketing can buy you a law, but it can’t bury corruption
$200 million + Dark Marketing can buy you a law, but it can’t bury corruption
During the 2020 election chaos, a major story flew somewhat under-the-radar in most of the country — Uber and Lyft bought themselves a law.
The two companies, along with DoorDash, Postmates, and Instacart, wanted to pass a ballot measure called Proposition 22, a law designed to classify their drivers as independent contractors and not employees worthy of living wages, paid time off, full benefits, health insurance, pensions, unemployment benefits, and other essential labor rights like collective bargaining. How do you sell that to the voting public?
It was one of the greatest marketing campaigns in American history.
Welcome to the World of Dark Marketing
“Dark Marketing is the latest trend in digital marketing and it’s changing online advertising like no other trend ever did. Dark Marketing is the combination of highly fragmented, segmented, and extremely personalized retargeting marketing campaigns. Industry leaders are shifting towards covert strategies to specifically target the young…” — Ankit Sharma
It was an unfair fight from the start
In addition to sending their top executives on a media marketing mega-tour — in which they threatened to leave the state if they didn’t get their law — the two companies invested more than $200 million on radio, print, digital, billboard, and mailer ads, in addition to hiring dozens of lobbyists and academic researchers to back the supposed benefits of denying workers full employment status.
It’s notoriously hard to win a yes in California ballot measures — PG&E dropped more than $40 million in 2010 and still lost — but Uber and Lyft had another advantage besides money in their fight against widest-spread wellbeing: the apps themselves.
In the weeks leading up to the vote, the companies turned their own apps into round-the-clock marketing machines; spamming their customers, bombarding them with push notifications, threatening price increases and longer wait times, while simultaneously claiming drivers would lose their jobs and that it would do irreparable harm to the corporate business model.
This really begs the question: If denying workers the rights of employees is the only way for workers to keep their jobs and keep the company profitable, is the rideshare business model ethical?
Clearly, smart companies only spend nine-figure sums if they expect to reap an even larger return.
Lyft and Uber not only spammed their customers, but they also inundated their employees with dire warnings about what would happen to their jobs if Prop 22 were to fail. Drivers had to click OK before they could continue with the app and do their job. That’s right: forced marketing. There’s a definition for this sort of behavior: political coercion.
In the end, grassroots workers’ rights groups didn’t stand a chance against two companies with a combined market cap of $112 billion, and the rideshare giants Dark-Marketed their way to a yes.
After the law passed, they went ahead and raised their prices anyway.
Uber’s CEO was gleeful on an earnings call, saying:
“Going forward, you’ll see us more loudly advocating for new laws like Prop 22.”
They’ve set a terrible legal precedent that other states are sure to follow, but it also sets a perverse marketing strategy precedent for tech companies to manipulate democracy in the future.
It’s Not Just Rideshare Drivers Who Will Suffer
Now that the app companies have purchased their law, gig drivers live in a no-man’s-land between being real employees and true independent contractors. As one driver rightly pointed out:
“[We] are now neither employees, guaranteed rights and benefits such as healthcare, nor true independent contractors, since we can’t set our own rates, choose our own clients, or build wealth on the apps. We’re given no family leave, no paid sick days, and no access to state unemployment compensation. Most importantly, while we’re already prevented from unionizing under federal law, the measure also makes it nearly impossible for California to pass laws protecting drivers who organize collectively, a fundamental right that companies undermine to silence worker power.”
Let’s be honest: The gig industry is a clever innovation, just the latest weapon for corporatists to strip employees of income, benefits, rights, and power, and deposit it all directly into the pockets of big tech shareholders. Last week, the U.S. Department of Labor finalized a ruling that will be a boon to gig companies… and will cost American laborers at least $3.7 billion per year.
We can expect many more companies to exercise de-employment as a shrewd tactic to boost their stock price: taxi drivers, truckers, delivery drivers, call centers, farm laborers, home health care professions, marketers, graphic designers, even teachers, nurses, doctors, lawyers, and accountants.
There’s really no end in sight if you can pay to disempower your own employees.
But There’s Good News: These Companies Will Lose the War
Even in states and nations where Uber and Lyft do prevail in the courts, it’ll be an expensive and costly fight every single time. Not only will these companies have to spend a boatload of cash in every state to lobby politicians and convince voters that having underpaid workers is somehow good for society, but winning will simply embitter residents on a political level, losing the apps huge amounts of goodwill every single time they market their lies.
Even if Uber and Lyft win hundreds of these battles, it will eventually become clear that the war was a Pyrrhic victory at best. Because, despite their best marketing efforts, the truth just isn’t on their side.
The Menace Economy
Acclaimed marketing professor Scott Galloway has a great name for businesses like Lyft and Uber. He says they’re part of the menace economy, which he defines as “the pursuit of wealth at the expense of other human beings.” He includes Facebook and Robinhood in that constellation, and I’d certainly add Airbnb.
The reality is that many modern companies flay a heavy slice off the backs of their employees, workers, or independent contractors, and give them as little as possible in return. Now, they’re willing to bend and break democracy to get it. Even though these companies employ some of the best marketers on the planet right now, history will ultimately reflect very negatively upon the founders, executive leadership, and major shareholders of these companies.
My grandparents enjoyed lifetime employment at living wages, worker’s rights, and a hefty pension. Today there are more than 57 million gig workers in America, many of whom are struggling to make ends meet, while billionaires metastasize their wealth around the globe.
The reality is that every worker — and every human being in our global family — deserves a real safety net. There is a truth that no amount of misleading marketing can erase: We are only as rich as our poorest neighbor.
Luckily, Uber and Lyft occupy a very precarious perch in the taxi universe. Like Airbnb, they’ve extracted a huge amount of value from their employees and stock investors, but what real value have they contributed in return?
If you strip it to the core, you realize the only thing any of these predator app companies actually do is build pretty-looking booking services and then weaponize colossal amounts of debt and private equity to strangle their competition, as while marketing the myth that they’re doing no harm.
How long before gig drivers become aware of the fact that they can start their own co-operative competitor apps, abandon Uber and Lyft en masse (perhaps shorting its stock on their way out the door), and earn the full value of their labor?
In the Prop 22 battle, fear-driven Dark Marketing drove customers and employees to narrowly vote against their own long-term best interests. How long before a desperate inability to provide for their families drives enough drivers to change their minds?
You can beat the big guys now
Unlike the monopolistic enterprises of the past (from Standard Oil to Walmart to the Big Three automakers), people no longer need huge physical infrastructures to compete with digital-only companies that try to bully their employees.
Many of today’s largest (and largely asset-less) tech companies were started by young entrepreneurs in their garages (Amazon), bedrooms (Airbnb), and college dorms (Facebook.) Uber and Lyft’s employees — and gig workers in general — don’t need to amass fleets of cars in order to compete with their predatory bosses. They just need to figure out how to organize themselves and put up a fight. There’s a marketing opportunity in there, too: to tell the truth about the predator companies, and to give our best work to the up-and-comers who are building truly ethical businesses.
If slavery taught us anything, it’s that injustice is inefficient. Humanity, if it can maintain any sense of morality, will crush the gig economy in time. Society will eventually discern and innoculate itself against Dark Marketing, if not regulate it as we do with cigarettes.
So get excited
As consumers become more conscious of predatory tech companies, and employees realize they’re trapped in the menace economy, it’s only a matter of time before both parties rise up and cut out the middle-men altogether.
When they do, workers will simultaneously become employees and owners — they’ll finally be stakeholders in their own economic destiny, which will lead to new and exciting innovations without the need for undemocratic terror tactics. In the end, it could be a wonderful story worth sharing.