In 2015, my wife, Annie Lowrey, profiled the ride-hailing company Lyft. I remember being surprised by the debate she outlined in her story. The activist investor Carl Icahn had just invested $100 million with Lyft, and he was being forced to defend the proposition that investing in the second-biggest player in a massive new market made business sense. “There’s room for two, maybe three competitors in the area,” he said.
This was not, to say the least, a consensus view. “If you really look at this thing, it’s not gonna be a two-horse race. Lyft doesn’t survive. And Travis is never gonna buy it,” Chris Sacca, an early Uber investor, had said. “This is a winner-take-all game. And Travis will take all.”
At 1:30 am Wednesday, news broke that Travis Kalanick, the CEO of Uber, was resigning amid mounting scandal. “I have accepted a group of investors' request to step aside, so that Uber can go back to building rather than be distracted with another fight,” he said in an email to the company. Icahn’s investment looks pretty good now. It turns out Kalanick will not, in fact, take all.
Uber is the most valuable private company in the world, and Kalanick’s bullheaded aggression is a big part of the reason. Both the ride-hailing giant’s extraordinary successes and its deep cultural failures reflect Kalanick’s personality and influence. It is very difficult to imagine the company in his absence. "This is shocking,” wrote technology journalist Dan Primack. “It's this generation's version of Steve Jobs being kicked out of Apple.”
The commentary today will focus on Uber, and properly so. But I’ve been thinking a lot about Lyft lately. Like many others, I’ve switched from Uber to Lyft over the past year. The decision was driven by discomfort with Uber’s obviously toxic culture. In the New York Times, Farhad Manjoo put it well:
Ride-sharing, as an industry and a civic utility, is too big an idea to be left to a company like the one Uber is now. The company that wins this industry is bound to become one of the world’s most powerful corporations. Its executives and culture will indirectly shape how we build cities, how we use energy, how we employ and pay people. We will entrust it with the safety and the security of our families, our streets, our private data and even, conceivably, the national infrastructure.
There was nothing inevitable about discomfort with Uber’s scandals driving a rush to Lyft. But Lyft, consciously or not, had correctly identified Uber’s weakness years ago. Uber was unfriendly, so Lyft would be friendly. Uber’s logo was sleek and silver and black, and so Lyft’s would be a bright pink mustache. Uber’s vision of driverless cars sounded like Skynet. Lyft painted a picture of a world with wider sidewalks and more parks.
Some of this was embedded in the company’s origins. Lyft originally distinguished itself by trying to make ride hailing a social experience. You sat in the front seat and fist-bumped the driver. Payment was made through “donations.” This was, in part, Lyft’s way of sidestepping the taxi regulations that Uber simply bulldozed past. And, to be honest, it was annoying — today, Lyft offers much the same frictionless, professionalized ride-hailing experience Uber does. But it seeded an idea of Lyft as a gentle, human company, and Lyft continued to build on that brand.
To Uber, Lyft’s business model was maddening. It took an Uber to pound through the regulations, to take the risks, to build the future. Then Lyft rolled behind with its dumb mustaches and friendly PR operation and did much of what Uber did without incurring the reputational cost.
But the wisdom of that strategy is apparent now. The risk with Uber wasn’t that it would fail at ride hailing. It was that it would lose the public’s trust. For a competitor to benefit from that stumble, it would have to be able to give anxious riders what they wanted: a ride-hailing company that really did seem nice enough, an Uber alternative you could actually trust.
This is not to say that Lyft will overtake Uber now or anytime soon. But it has consciously built itself to take advantage of Uber’s troubles, and there’s a lesson in that — one that goes beyond ride hailing.
The Uber news comes the morning after Democrats lost a hard-fought special election in Georgia’s Sixth Congressional District. Their candidate, Jon Ossoff, ran on an agenda of more or less nothing at all. His theory of the campaign was that Donald Trump is unpopular, and by running a bland and inoffensive race, he could benefit from Democratic anger without activating a Republican backlash. The strategy failed. Ossoff underperformed Hillary Clinton in his district.
Unlike Uber, Donald Trump is not ruthlessly effective. But like Uber, he has created a toxic culture that is already generating a steady stream of scandals. The Russia and obstruction of justice investigations are the first, but they will not be the last, and they might not even prove the worst. Eventually, running the government this incompetently leads to disaster.
The question is whether Democrats will be able to take advantage of Trump’s coming failures. Trump is going to leave people feeling angry and disgusted with politics. That might be enough to win back some seats, but it won’t be enough to retake Congress. To do that, Democrats will need to be an answer to voter frustration with Trump, not just an expression of it.
As of now, the Democratic Party is failing at that task. The leader of the House Democrats, Nancy Pelosi, is less popular than Trump. As my colleague Matthew Yglesias pointed out, congressional Democrats have no policy agenda of their own, and they have avoided developing one. As Georgia’s special election showed, that’s not enough. If you are disgusted by politics, the Democrats are not an answer. The party is ready for Trump to lose, but they’re not yet prepared to win.