Uber Learned That Progress in China Had to Mean Stability
To answer fears raised by taxi riots in Paris, the Uber founder told Beijing that disruption works differently in democracies.
David Senra · Travis Kalanick, Founder of Uber & AtomsThe three newspapers landed on the table face up. They were Western papers, the old fashioned kind, and across the top of the front page were photographs of chaos in European cities.
Across from Travis Kalanick, the founder of Uber, sat China's transport minister. It was around July of 2015, Kalanick recalled, just as Uber was trying to establish itself in China with the help of a trusted local partner. In Paris and other major cities, taxi drivers had staged a pan-European strike against ride sharing apps, and in Paris vehicles had been set on fire. The minister's message was plain. This is a problem, and China would not accept it.
Kalanick pushed back. He asked the minister why unrest in Western democracies should decide what happened in China. His answer, as he tells it, was that the two systems produce change in opposite ways, and that he told the minister Uber understood the difference. Kalanick described the meeting as a test of whether officials would view Uber as a source of disorder or as a business that could grow if it supported stability.
In a Western democracy, he said, politics is a popularity contest. A politician succeeds by being popular, not by delivering progress. The only time such a politician accepts progress, Kalanick argued, is when he feels threatened by disruption or instability.
China, he told the minister, was totally different. Progress there would be welcome only if it arrived together with stability. He described his phrasing as deliberately Chinese in its framing. Kalanick said, "Progress must be in harmony with stability." If Uber gave even a hint of bringing instability to China, he said, the company expected to be closed down at once. Yet so long as it built a foundation of stability, progress would be welcome.
The minister had presented the photos as a warning, and in Kalanick's account he tried to turn them into a contrast. Officials never concluded that Uber was injecting instability into their cities, he said, and for the most part the company was treated fairly by local authorities. In his telling, the disorder in the photos belonged to democracies, not to Beijing.
Questions people ask
Why were taxis burning in Paris in 2015?
In June 2015, licensed taxi drivers in France staged a national protest against UberPOP, a low cost service that let private drivers carry passengers. Drivers blocked roads and highways around Paris and other cities, and some demonstrations turned violent, with cars overturned and tires burned.
Did Uber end up winning in China?
No. In August 2016, Uber sold its China operations to its local rival, Didi. Uber exited day to day operations in mainland China and took a minority ownership stake in Didi, ending a costly subsidy war.
Why did Uber feel it needed a Chinese partner?
Foreign technology companies often found it difficult to operate, win licenses, and build public trust without a well connected domestic ally. Kalanick said Uber gave a small stake to the Chinese search company Baidu so it would have an insider to vouch for it and help it be treated more like a local company during regulatory pressure.