Uber’s Suspension Has Kicked Off a Soft Power War
It’s become apparent that with the recent suspension of Uber’s license in London, governments in Europe are finally taking the gloves off for giant tech companies. Precedents have been set in the last year which has changed the public perception of how tech companies are to be treated. With European Commissioner for Competition Margrethe Vestager at the heart of it handing down fines left, right and centre. A 2.4€ billion fine to Google over its manipulation of search engine results, a €13bn fine in back taxes to Apple or a €110m to Facebook for misleading EU trustbusters about WhatsApp. The tides are certainly turning. But what is really fueling this backlash?
This is about public perception and control. With tech giants like Google, Facebook and Apple operating on the fringes remaining almost invisible to society, that position is slowly eroding and is losing its attraction. European cities want these companies to play by their rulebook and to come out of the shadows. Their insistence to stay unaccountable in the areas of tax and policy just doesn’t fly anymore especially when they are pioneering new problems around fake news and data protection. Governments need to be seen that they are taking a stance.
London’s mayor Sadiq Khan has said that Uber is not fit and proper to run in London citing safety concerns and whilst this might be a legitimate reason what was really revoked here was their masculinity and bravado attitude. The ability to throw their weight around regardless of what accusations were thrown at them. Sadiq made a provocative statement in lieu of this, saying that “The company is a disgrace. If the company was outside the law, what could Transport for London do? But, you’ve got to play by the rules.” Pretty tough words from the man in charge of running Uber’s third largest profit centre.
But this suspension is not so much about playing by the rules but more about giving the city a timeout in order to figure out how to handle such a delicate issue of growth. Suspending Uber was just a mere formality and in this scenario and also has a lot to do with optics and the theatre of how cities and government deal with policy, innovation and change. They don’t want to be seen as being bullied on their own playground.
Dara Khosrowshahi, Uber’s new chief executive appeared in public after the suspension stating they are sorry for their past transgressions and will look to clean up their act. This feels like grandstanding, what has been going in the backrooms on both sides will be even more telling.
Whilst Uber look to send their cavalry to London to speak with TFL in order to strike a more conciliatory tone, London’s mayor can add one point to the scoreboard. There is no doubt that this is a power move on behalf of London. The real question remains is, will this new fight between the state and tech continue to be dragged out onto the streets for everyone to see, in other words, how ugly will it get? Very ugly, it’s an old-fashioned soft power showdown and this E.U. vs. U.S. war is just heating up.
Written by Ari Stein, editor of 52 Insights