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The Graver Threat of the Growing Tech Backlash

Are techies becoming the new oilmen?

Shutterstock / Danomyte

In November, The Economist warned of a coming peasants’ revolt against the tech industry, predicting: “The tech elite will join bankers and oilmen in public demonology.”

By the close of the year, it started to look like they already had — at least in the concentrated tech hub of the San Francisco Bay Area.

On Dec. 20, protesters blocked a bus picking up Google workers near a mass transit station in Oakland, the latest in a string of demonstrations singling out the sector for rising evictions and gentrification in the region. Before the incident ended, a shuttle window shattered and tires were slashed, according to media reports.

It was just a few short months ago that activists were limiting their assaults to Google bus piñatas, rather than the real deal, and the escalating hostilities have clearly caught the sector’s attention. Some industry and political leaders are taking steps to cool temperatures before anything worse transpires — and well before anything like the “Occupy Silicon Valley” movement forecast in the Economist comes to pass.

Notably, on the same day as the Oakland protest, the influential tech coalition announced a plan “to help address common challenges in housing, education, jobs and affordability facing San Franciscans.”

But it’s unclear how much the industry can do to address these pocketbook issues — and how big a difference it would make in the public mind. Some observers believe a deeper set of resentments is cementing that could haunt the sector for well beyond the current boom.

“Tech, oilmen and bankers fund the same reactionary kooks in Washington that deny global warming and carry water for tobacco companies.” — Chris Hoofnagle, Berkeley Center for Law and Technology

Silicon Valley tends to see, or at least portray, itself as a force for good in the world. Tech companies and execs proclaim “don’t be evil” as a corporate principle, speak out for workplace equality, take stands for sustainability and build products that make lives easier (except when they don’t).

The gadget-loving public has tended to view the sector, if not exactly as virtuous, then at least a step closer to benign than Big Oil and Wall Street banks.

So what could be changing?

The rhetoric increasingly doesn’t seem to square with the reality, said Chris Hoofnagle, director of the information privacy programs at the Berkeley Center for Law & Technology.

In other words, it’s hard to see the sector as benign after a long list of revelations about worker safety shortcomings, tax avoidance schemes and privacy scandals. And it’s difficult to think of companies as virtuous when they contribute to trade groups deliberately distorting science or fund ads praising the Keystone oil pipeline.

“Many Valley companies engage in a kind of confused progressive rhetoric, but there is little reason to believe that these companies have small-l liberal values,” Hoofnagle said in an email. “The political agenda of Valley companies is not much different from the oilmen or the bankers. Tech, oilmen and bankers fund the same reactionary kooks in Washington that deny global warming and carry water for tobacco companies.”

Isolated though the cases may be, the public perception isn’t helped along when tech entrepreneurs say obnoxious things (see: Shih, Peter or Gopman, Greg) and venture capitalists propose establishing libertarian utopias apart from the normals.

But if there’s a tipping point issue in the Bay Area, a galvanizing offense that gets protesters out in the streets, it’s the spike in housing costs and evictions.

“The tech industry’s reaction has been shameful.” — Tony Robles, Senior and Disability Action

Rents rose more than 20 percent across San Francisco in the last year, but leapt between 30 percent and nearly 50 percent in the poorest neighborhoods. Ellis Act evictions, used to eject all tenants from a building to clear the way for a sale, soared 170 percent in the last three years.

Many activists and residents pin the blame on well-to-do tech workers moving into traditionally working-class neighborhoods, pushing up rents or buying up buildings that had been rent-controlled for decades. And some argue the sector that lures them here has shirked responsibility for these social impacts.

“From Google buses invading the neighborhoods, to the evictions of elders, to the very real effects of speculator-fueled evictions, the tech industry’s reaction has been shameful,” said Tony Robles, an organizer with Senior and Disability Action who joined the Oakland demonstration, in an email.

“This is an industry who prides itself on being plugged in, bringing the world together through technology,” he added. “Yet, when it comes to this very bad crisis — and one need only look at the latest eviction map and eviction statistics from the rent board — what have we heard from the tech industry, with all of their know-how, intelligence and technological brilliance?”

But the backlash does seem to have reached a volume where tech and civic leaders can’t ignore the complaints.

“We recognize we must be part of the solution.” — Ron Conway, angel investor

San Francisco Mayor Ed Lee, who has closely aligned himself with the industry, wants to ease economic inequality by boosting the minimum wage in the city. Talks are also under way to require private shuttle operators to limit and pay for the use of public transit stops, changes protesters have been demanding.

The tech industry has made a point of highlighting its philanthropy, including the recent announcement that Facebook CEO Mark Zuckerberg will donate nearly $1 billion in stock to various charities.

Finally, the organization, spearheaded by prominent angel investor Ron Conway, has established committees focused on philanthropy, tech training and affordable housing.

“The tech community recognizes that the rising cost of housing — and its scarce supply in the city and region — is a challenge we must tackle collectively,” Conway said in an email response to Re/code. “It’s an issue for our tech workers as well, and we recognize we must be part of the solution.”

“There are some who seek to pit the need for housing against the need for jobs,” he added. “We think that’s a false choice. We need both! We need to sustain this economic recovery and see that it reaches every family and neighborhood.”

Gabriel Metcalf, the longtime executive director of urban planning group SPUR, will lead the affordable housing committee. He applauded the industry for taking steps to address these issues.

“The tech community needs the Bay Area to work,” he said. “I don’t think they have more responsibilities than other businesses, but they have the same responsibilities. They’re part of this community and they have the same obligation as the rest of us: To be civically engaged in helping to solve the problem.”

But he’s the first to admit there are no quick or easy fixes for the city’s affordability challenges. In fact, since it would take years to add substantially to the local housing stock, odds are the social/app/mobile boom will go bust before any new housing policies could make a real dent in the marketplace.

Peter Cohen, co-director of the Council of Community Housing Organizations, doesn’t think’s initiative will do much to alter perceptions because he doesn’t think it’s much more than a PR exercise.

“I imagine they’ve got a posse of consultants giving them damage control advice on their public perception,” he said. “I don’t really think they have any substantial ideas up their sleeves.”

Cohen said one concrete way the tech industry could ease the affordability crisis would be to cut big checks. He notes that San Francisco’s hotel tax produces about $5 million a year that goes into subsidized housing, and said it’s appropriate to call on the tech sector for similar contributions since their workforce is primarily responsible for driving up housing costs. (Those engaged in local protests have their own long list of suggestions for tech workers.)

It’s unclear what’s exact proposals will be, much less what could ultimately translate into new policies, since the committees have yet to meet. But Conway stressed they’ll explore a wide array of options.

“There are a lot of sound ideas and proposals for housing on the table that merit consideration,” he said, “and the tech sector wants to partner with the city, the developers, affordable housing advocates and other sectors to support sound proposals that will increase the supply of housing, including below-market-rate housing, in San Francisco and the region.”

Why should any of this matter to the industry? What’s the big deal if people resent the sector, block the occasional bus or mentally file techies alongside bankers and oilmen?

There are real costs to negative reputations. Just ask Walmart.

Activists target you. Reporters dig deeper for dirt. Politicians don’t have the cover to push through your next tax break.

But most of all, customers start to view you differently.

Using tech services isn’t like using a toaster. It’s often an act of faith. Logging into Apple, Facebook, Google or Square products requires confidence that those companies will treat intimate information in an aboveboard manner, including your contacts, communications, location, medical history, shopping preferences, surfing habits and more.

“The cost comes in less flexibility,” Hoofnagle said. “It will be more difficult for tech companies to say ‘trust us’ and still get their way.”

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