Jun 16, 2017
Companies Cannot Be Apolitical Anymore
By Nora Shepard and Belinda Nam
Uber CEO Travis Kalanick announced this week that he’s taking an indefinite leave of absence after a scandal-ridden year. Sexual harassment allegations and accusations of a hostile work environment have followed the ride-sharing giant for months now after former employee Susan Fowler released a blog post about her year working there. The damning post detailed when her boss sexually harassed her and how the company systematically ignored her complaints. But the trouble really started back in January, when #DeleteUber started trending after Uber enacted surge pricing during airport protests at New York’s JFK International Airport. Uber was accused of trying to turn a profit during a crisis, especially since New York City cabs were offering free rides at the same time in solidarity with the protesters. The backlash was so strong it prompted the CEO to step down from Trump’s advisory board.
Typically, businesses can (and want to) opt out of participating in politics. They want to appeal to as many people as possible, so it doesn’t make sense for them to come down firmly on one side or the other in a political debate. Increasingly, however, consumer pressure is rendering that choice obsolete for a variety of reasons. We have expanded our expectations around acceptable business conduct — delivering a stellar product is no longer good enough. Public companies are being forced to come down firmly on various issues in this hostile political climate. Consumer dollars are powerful, and holding them hostage in big numbers sends a powerful message — pick a side, or we won’t pick you.
Is this good or bad? Short answer: yes.
Companies, above all else, care about making a profit. If customers are threatening to revoke their dollars if the business contradicts their values, it makes sense that these businesses are responding. Uber’s ruthless business model has been seen as heartless more than once. First, during the JFK protests. Then more recently, Uber increased surge pricing during the recent London attack at the same time London’s black cab services were giving rides for close to nothing or free. When companies enter the political space, it’s more difficult to focus on the product they’re selling. That said, when customers twist businesses’ arms, products and workplaces become more representative of the society at large — and after all, a capitalist society is nothing if customers don’t use their dollars to speak out.
This type of consumer behavior is not solely in response to Trump’s administration. Consumers have more options than ever before, and they are choosing to spend their time and money at businesses that coalign with their values. We believe, in a way that’s somewhat revolutionary, that the way a business conducts themselves is just as important — if not more important — than the product they’re delivering. Consumers are holding themselves accountable to look deeper at what the company is doing internally in order to decide whether it’s a company worth supporting. Customers are demanding to know what the diversity is like within the company, whether they pay their labor fair wages, and whether they have a social conscience.
Businesses are not participating more in politics merely because our society is seeing a more extreme right and left, though that is a contributing factor. Media and news seep into every aspect of our lives. 24-hour news cycles make their money by running advertisements, and companies who run ads on those kinds of channels implicitly endorse whatever is airing on the show at the time. Can a company truly stay out of politics if it’s advertising on a political show? Amazon experienced this first hand this past spring when their employees demanded the online shopping giant stop advertising on Breitbart.
Just this week, Uber’s David Bonderman made a sexist joke while trying to address their sexist work culture. Thirty years ago, something like that probably wouldn’t have registered on most people’s radars. These days, though, anything can be news at any time. A scandal of any magnitude is not likely to be glossed over, and it’s allowed customers to dig deeper — for better or for worse.
Social media has also changed what we want to see from a company. It’s no longer rare that a public figure lets us peek into their personal life — it’s a requirement. Twitter means that we expect a company to engage in a running dialogue about topical issues. Already we can see how this can get sticky, and fast. A business doesn’t just have to worry about their official social media accounts. Employees, upper level management, and CEOs all represent the company on their personal accounts. Customers see all of their postings and hold them accountable for their words in a way that has simply never been relevant before. It may not even be possible anymore for a business owner to stay out of politics since the personal and political seep together so frequently.
Social media has given us a new lens to view in real-time how consumers respond to businesses acting political. People debate highly anticipated Super Bowl commercials every year on social media. A 30-second advertisement during the commercial break of the 2017 Super Bowl set a business back around $5 million. Considering the cost allows us to better understand what’s truly at stake for businesses when they decide to be political. Some businesses, like Coca-Cola, Airbnb, Budweiser, and Audi, released topically political commercials during the Super Bowl. Controversial ads always spur mixed reactions. When Coca-Cola, for example, sang “America the Beautiful” in multiple languages during an ad in both 2014 and 2016, #BoycottCoke started trending on social media. These businesses were aware of the risks of consumers boycotting their products, but ultimately decided to air these advertisements to let people know what their political beliefs are.
It’s impossible to know whether a company becomes publicly political to appease to their existing customers or to attract the kind of customers they want to serve. (Which came first: the chicken or the egg?) If a company’s established base insist they endorse a certain political value, the CEO might feel trapped into agreeing with their base. On the other hand, perhaps a CEO decides to make their political beliefs public because they don’t want to serve customers who don’t agree with them. It’s not inconceivable to imagine a business owner who fiercely believes in their values, and that they would use their position of power to push for a society that aligns with them.
If a business owner were to use their platform in this way, can we even fault them for it? Everyone has a platform of some kind which they use to announce their views. But a business owner, especially one for a company as large as Amazon or Uber, has a responsibility for more than just themselves. If their employees or loyal customers feel uncomfortable, do they have a obligation to respond to complaints? Or is it more important they stay out of political matters in our capitalist society?
Millennials in particular believe that tolerance is a necessary value for people to have, and they are more likely to buy from a company if they believe their values align. We have seen this in action more than once this year alone, like when 200,000 people deleted Uber after the surge pricing incident and turned to Lyft, a business that donated $1 million dollars to the American Civil Liberties Union, or when people pledged to support Starbucks after they made a global commitment to hire 10,000 refugees by 2022. It’s been suggested that a cultural shift toward individualism has inspired every generation to become more tolerant than past generations, and our businesses are taking note.
A potential downside of this new dynamic is that there is no longer a safe space from politics. Businesses that used to be completely uninvolved with politics are now forced to be involved. But then, this is no “normal” political climate (or is it the new normal? Too soon to tell). Previously politically apathetic citizens are now in the political frontlines — from all sides of the political spectrum.
It’s becoming increasingly clear that opting out of politics is simply not an option. Not for businesses, not for anyone. It’s up to us to craft a political world we’re proud to live in, and money too often speaks louder than words. With that in mind, maybe it’s a good thing that politics is bleeding into business. At the very least, it’s perhaps inevitable.
NewFounders is a coalition of leaders using innovation to reconnect people with politics.
