Amazon and Uber need to grow up
If Amazon and Uber intend to be permanent fixtures of the consumer landscape, they need to reckon with the growing power that they exert in people’s lives. Separate developments late last week suggested that two maturing technology companies don’t yet understand, or are acting coy about, their own broader impact on society.
On Thursday, Uber Technologies Inc. agreed to pay up to $100 million to resolve class-action lawsuits filed by Boston lawyer Shannon Liss-Riordan on behalf of Massachusetts and California drivers. Under the settlement, Uber will stop telling passengers that tips are included and will give drivers more warning before kicking them off the system but would keep classifying them as independent contractors.
Also on Thursday, Bloomberg identified a major problem with Amazon.com Inc.’s rollout of same-day delivery service: In six major metro areas, including Boston, that service — offered to subscribers of $99-a-year Amazon Prime — isn’t available in many predominantly black neighborhoods. The most glaring omission was in Roxbury, an enclave of three compact ZIP codes left out of a vast same-day service area extending from Boston’s southern suburbs to the New Hampshire border.
Because lots of tech firms develop great products against daunting odds, they get a pass for behavior that would get established companies in trouble with regulators or the public. Eventually, though, a successful firm stops being a scrappy startup that can focus on its own survival alone. At that point, it should step up to a greater level of corporate social responsibility.
Amazon told the Globe that delivery logistics and customer data, not neighborhood demographics, shape its decisions about which areas to serve. Yet even if there’s no explicit policy of redlining, Roxbury’s exclusion is plainly unfair. In essence, an Amazon Prime member in that centrally located neighborhood pays the same $99 for a lower level of service than a similar customer in any surrounding area.
Roxbury is “an anomaly,” Amazon PR executive Craig Berman told Bloomberg. Yet the situation demands more than a shrug of the shoulders. It calls for human eyeballs on a map, and a recognition that a company as innovative as Amazon can find a way to serve a neglected community.
The lawsuits against Uber, meanwhile, highlight a tension built into that company’s business model. The San Francisco-based company wants to run an awesomely efficient vehicle network with standardized pricing and reliable customer service. That aim doesn’t quite square with the company’s practice of treating drivers purely as solo operators who just happen to use Uber software to find passengers.
This arrangement was easy to justify in the company’s uncertain early days. But as Uber’s valuation soars past $60 billion, it’s just possible that the company can afford to offer drivers greater predictability and security.
One common thread is that both Amazon and Uber have become deeply enmeshed in the way people and goods move around today, at least in dense metro areas. Even so, older firms with a distinct physical presence make far more conspicuous targets for public officials and activist groups alarmed by yawning inequality. Walmart, the world’s largest retail chain, is a perennial target because of its labor practices; Verizon has been the subject of a major strike. Internet firms attract fewer protest signs, not least because their headquarters are so far away.
In an alternate world, tech firms could be a more egalitarian force. Amazon’s expertise in selling a mind-boggling variety of products might be especially helpful to residents of Roxbury. An Internet retailer with a vast store of data should have no trouble identifiying underserved areas with unmet needs.
As for Uber, it’s already created a way for people to earn money without having to be formally hired by someone first. Maybe the company’s crack lobbying team can also help propose a fair legal and social insurance structure for workers who aren’t full-fledged employees but aren’t mere freelancers either.
These companies are in a position to soothe the problems that fray at our social fabric — or, if they’re not careful, to aggravate them.