This week, America witnessed the successful hunting down and bagging of a major company’s CEO. Too many of us seem to be just fine with it. But we shouldn’t be.
That leader was Uber’s chief, Travis Kalanick, who announced on Tuesday that he was stepping down from the company he founded.
Let’s get something out of the way to start: Kalanick is not a saint, and he did indeed bring much of his personal problems on himself. He will also likely live out the rest of his life as a very wealthy man, so we needn’t cry (literally or figuratively) over his fate. And Uber certainly is not the perfect company with a spotless ethical record.
Still, what happened to Kalanick, and by extension Uber, this week should bother every freedom and innovation-loving person in America and the entire world.
Don’t be fooled by all of Kalanick’s personal missteps and Uber’s ethical issues. They absolutely aren’t excusable, but they’re also not all that different from what dozens of other companies and CEOs face every day.
The real reason Kalanick was taken down and Uber remains in so much trouble is because it has enemies. And those enemies have power.
Most of us are familiar with who those enemies were and how they responded. Taxi companies across the world have long been one of the most politically controlled and regulated industries ever since they were just horse-drawn livery firms.
In return for undergoing often extensive licensing requirements and fees, local governments protect those taxi companies. It’s a deal made in crony capitalist Heaven—except that it often leaves people who needed rides, reliable service, and affordable fares in a commuter’s purgatory.
In many ways, the licensed taxi industry is essentially a public-private partnership wherever you go. So when you come for the cabs, you come for the government too.
When Uber came on the scene, and skirted these licensing rules by officially branding itself a “ride-sharing” business as opposed to a taxi company, those companies and taxi driver unions protested and lobbied their government friends to restrict and even ban Uber from their localities. That effort yielded mixed results, but the constant political and regulatory harassment was and is a reality for the company.
And the news media played a big role in this harassment too. At first, the media provided Uber with billions of dollars in virtual free advertising, with regular reports explaining and publicizing the startup. Then, newspapers, TV networks, and websites eventually started to report frequently on every Uber misstep, criminal incident involving an Uber driver, and almost any complaint coming from or on behalf of its employees.
Uber and Kalanick soldiered on and, thanks to it becoming the most well-funded tech startup in history, it was able to fight back with an aggressive political and media strategy that included a well-documented P.R. and policy war room.
Then, the targeted response to Uber changed. As every truly astute political observer in America knows, attacking a person is always a more effective way of economic harassment than targeting a company or an industry as a whole. In a tactic right out Saul Alinsky’s 13th rule in his book “Rules for Radicals,” Uber opponents moved to “pick the target, freeze it, personalize it, and polarize it.”
So the most effective attack on Uber finally gained steam when Kalanick himself became the target. That attack hit hardest by the release of a video he did not know was being taken that showed him arguing with an Uber driver, and coming off as mean and elitist.
Considering the nature of the video, some experts believe Kalanick was set up by that driver and goaded into an argument that would make him look bad on tape. Set up or not, the video had a punishing effect on Kalanick that finally began the process of his personal undoing at the company. He became too much of a liability for the company and its investors, and they finally ousted him. In the end, it took less than six months from the day the video went public for Kalanick to lose the top job of a company he founded and had run for eight years.
Again, tears need not be shed for Kalanick and his personal situation now. And while Uber may never become something similar to its investors’ grandest imagined dreams, Internet-based ride hailing technology certainly seems here to stay. However, everyone who wants to see innovation in improvements in government-protected industries from health care to infrastructure should at least be a bit worried.
After seeing what happened to Kalanick, who could blame the next innovator in highly government protected industries like mass transit, medical care, or energy from shying away from making a big splash? Is it any wonder that so many of our greatest innovations in America over the past 20 years have come in the relatively non-government protected areas like consumer electronics?
One could argue that one such intrepid innovator is Elon Musk, who is indeed starting to push the envelope in areas like mass transit and energy. But the key word here is “starting.” Not even Musk’s super-popular car company Tesla has made a significant dent in the entrenched auto industry’s sales. His SolarCity business is an even smaller blip. And his efforts to actually tunnel under the highly regulated streets of Los Angeles are bold and exciting, but haven’t really started yet.
If and when any of those factors change, it’s a good bet Musk may get something similar to Kalanick’s treatment.
That’s the real shame here. Also somewhat shameful is the way too many of Kalanick’s peers in the tech world are silent about the forces he faced, which ultimately defeated him. Perhaps his former colleagues will just quietly learn from his story and avoid his mistakes.
However, the rest of us should at least be a little more aware of why this particular innovator became such a hated target. And if that awareness grows, maybe those entrenched powers in business and government will find it harder to stop the next disruptor who comes down the line.
Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.
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