The story Silicon Valley leaders tell about their industry is one of complete transformation. Although many businesses advertise their products and services as revolutionary, it’s Silicon Valley making this concept a central part of the industry’s identity. Elon Musk isn’t just any old CEO, he’s the kind of mad scientist innovator whose image is pulled right out of comic books. Uber and Airbnb aren’t just a type of taxi or renting service respectively, they’re revolutions against standing taxi and renting services.
But is Silicon Valley’s disruptor status earned? The creeping political and economic reality suggest Silicon Valley is significantly less a transformative force than their marketing would have one believe.
The recent Uber and Theranos scandals are a good example of this. Uber was meant to revolutionize the taxi industry yet has been beset by repeated scandals of their own, providing little reason to believe they will be the model of taxis in the future. There are the long-standing complaints about Uber failing to recognize their drivers as employees or the company’s disregard for regulation. Now Uber faces additional scandal for its treatment of women employed by the company and the “Hobbesian” conditions of its corporate office more generally. For Theranos’ part, their entire business model was essentially built on marketing alone. While Uber at least has drivers that physically exist and drive customers around, Theranos’ blood analyzing machines didn’t work. There was literally no product to be the future of healthcare. Uber and Theranos were meant to be model of Silicon Valley disruption and this highlights the scandals even more. Elizabeth Holmes was supposed to be the next Steve Jobs and Uber had become so well recognized as to become a verb (i.e., “I’m going to Uber to the airport”).
But it is important to note that despite their high-profile, Uber and Theranos are not lone bad actors. Lyft may be riding a wave of good press but it has joined Uber in fighting regulations across the country. Lyft also does not classify its drivers as employees—because employees would have to be paid more and would be entitled to certain benefits that contractors are not. Further, women working in the Valley have reported that Uber’s treatment of women at their corporate offices is not an isolated case within the industry. Silicon Valley has long had problems retaining and employing women. The innovation promised by the disruptors of the Valley are meant to benefit everyone but come at the exploitation of the employees who make the services and products possible in the first place.
Outside of service industries, Silicon Valley companies manufacturing goods fare no better. When Elon Musk decries an attempt to unionize a Telsa factory as the work of outside agitation, he shares more in common with a traditional car manufacturer like Nissan than an actual disruptor. Apple long moved manufacturing away from regulatory oversight, environmental concerns and humane labor laws—to say nothing of the company’s refusal to pay taxes and move cash overseas. Far from making the company an outlier, it only reinforces how normal they ultimately are by joining the ranks of “traditional” American industries such as auto manufacturing, pharmaceuticals and banking in tax avoidance and hostility to workers.
Corporate behavior is only one half of the story. Uber still cannot turn a profit. Theranos was outright sued by some of its own investors in 2016. Snapchat may have had a notable opening, but share prices have already begun to fall. Twitter, a platform given unprecedented advertising for being the platform of choice of the President of the United States, still cannot make money. Apart from a handful of companies that existed before the dot com bubble burst, the companies of Silicon Valley are not particularly successful on their own terms. This has made their own stockholders and investors nervous.
This instability has been disastrous for the people working at those companies—what gains do exist will inevitably go to the top. The attempt for these companies to turn a profit at any cost has harmed their own employees (even those they do not recognize as such) while the leadership of these companies are reimbursed handsomely. This was no better embodied by Kalanick’s words towards one of his own drivers, “You know what, some people don’t like to take responsibility for their own shit. They blame everything in their life on somebody else.” The irony, of course, is that the Uber driver did not lower wages in an attempt to make one part of the company more profitable, it was the leadership at Uber—Kalanick was the responsible party.
More broadly, the recent numbers released by the Bureau of Labor Statistics showing productivity growth is still sluggish at around 1%—a number productivity growth has remained around since 2007—provides little reason to believe Silicon Valley’s disruptor status. If the innovations coming out of Silicon Valley were meant to turn existing industries on their head, the low productivity growth suggests no real revolution of the workplace has taken place. The obvious point of comparison is the explosion of productivity growth from the end of WWII until the early ‘70s. But even the smaller limited period of growth in the late ‘90s and early aughts is a useful point of comparison—when computers were significantly slower, less mobile and did not provide access to the same amount of services as the modern smartphone does. This implies the transformation resulting from information technologies has largely already occurred. Anecdotally, one could look at a basic computer certification’s requirements to see the amount of legacy systems that are still required to be learned to provide basic computer maintenance in the existing corporate landscape as illustrative of this. Modern disruptors are not changing the underlying systems insomuch they are making them more efficient.
In the response to the Uber scandals, there will be a concerted effort by the other companies of Silicon Valley to paint Uber as unique. But this is largely not the case—across the political and economic spheres, it’s clear the problems of Uber are also problems shared by the industry at large. Silicon Valley disruptors are ultimately traditional companies and the expression of their disruption will only ever be within the bounds of the economic and political system which it occupies. This means the pursuit of infinite growth with the most debilitating costs, those social and financial, shifted onto average employees. However, the tools of information technology still make the possibility of genuine transformation possible. But that transformation won’t come from someone pitching themselves to venture capitalists as the Uber of anything.