Capacity in the News: Uber vs.New York City

August 3, 2015  |  Leadership, Technology Disruption

When it comes to building capacity, the leaders of the new economy seem to be masters at it. One such example is Uber, the on-demand car service company that has almost eliminated the need to stand in the rain with your hand raised, praying a cab will come by. The service recently came across some resistance in New York City, and how it handled the issue is one for the record books.

If you’ve followed the story in the news, the political victory of CEO Travis Kalanick and his savvy startup team over New York City Mayor Bill DeBlasio is a very David and Goliath-type victory. DeBlasio had introduced a bill that would have constricted Uber’s growth plans to 1% per year. The already-congested city streets needed fewer car traffic, and the plan was to attempt to limit a flood of new cars.

Uber fought back with statistics and a flood of backlash in the form of a scathing ad campaign and floods of tweets, emails, and backlash from it’s user and driver base. The demand for their service has created a fleet of 19,000 independent contractor drivers who use their own cars and a growth rate of 3% per month. Uber claimed that not only would the ban create extraordinary wait times for their customers, but that the bill would favor the struggling medallion owners of yellow cabs, capping job opportunities for more people to drive under the independent contractor model. They further went on to claim that since Uber is a technology-driven company, that it would be an attack on the growth of the technology sector altogether.

Another point? With Uber cars currently outnumbering yellow cabs listed within the city, the company’s competitor, Lyft, claimed that Uber currently owns 90% of the market. The bill would effectively lock down entry and expansion within the market with Uber having secured its market domination indefinitely.

The arguments were heard, and the bill was withdrawn.

I loved following this story because this is an example of a brand fighting for its right to grow capacity. Uber’s strong vision and mobilization of resources ensured that it would remain flexible regardless of the verdict, but it brought up strong points for the maintenance of its own growth. They remained fixed on the rights of their company to expand, and as I explain in my forthcoming book, Unleashing Capacity: The Hidden Human Resources (Charles Pinot, 2015,) their ability to marshal their resources around a current problem and emerge victorious is a great example of a strong strategy. They saw an impediment to their capacity, and they removed it.

What can be learned from Uber’s case? Whether you agree with the decision that was made on their behalf or not, there’s something to be said for how swiftly and effectively they worked to protect their corporate capacity. I’m particularly excited about how they were able to mobilize their customers to come to their defense. That’s the power of a strong brand and a model for social connectivity. When an app can utilize its thousands of customers to protect it, that’s an unbelievable example of brand loyalty. The users want the uptick in capacity as much as the company does. It’s a powerful way of doing business, and an example of how the resources connected to capacity may not just be within your employee ranks.

 

Rita Trehan is the Founder and Principal of Rita Trehan, LLC, a change management and leadership advisory firm focused on corporate leadership, emerging technology, and cutting-edge organizational design. As a seasoned top executive that has successfully transformed organizations at the Fortune 200 and beyond, she has extensive experience working with CEOs and top corporate management on process and organizational improvement for maximum profitability. A soon-to-be published author, Rita regularly speaks at industry conferences around the world. You can contact Rita on twitter at @rita_trehan and connect with her via LinkedIn. Rita’s blog can be found at www.ritatrehan.com.

back to blog >