Bradley Tusk: Uber’s gentler approach makes it seem weak to its foes

Uber
CEO Dara Khosrowshahi
Uber

• Regulation critic Bradley Tusk, who is also an Uber
  shareholder, has some strong opinions on New York’s new
  regulations that cap the number of ride-share drivers.
• He believes that Uber’s kinder, gentler approach these
  days could be interpreted as weakness by Uber’s traditional
  rivals.
• But an Uber insider tells us that times have changed,
  and Uber’s view on its former rivals has changed with
  them.

Political-campaigner-turned-regulation-critic Bradley Tusk —who
is also an Uber shareholder — has some unsolicited advice for
Uber CEO Dara Khosrowshahi: Uber’s kinder, gentler image
isn’t a good thing when it comes to a “bare knuckle fight” with
would-be regulators who want to limit Uber’s business.

“Effectively, if you want a CEO who is chosen because he is calm
and smooth and avoids conflict at all costs, that may work really
well in certain parts of the business. But when it comes to a
sort of bare knuckle fight with the city council, you really have
no chance at all,” Tusk tells Business Insider.

Tusk’s comments are in response to new
rules approved earlier this week in New York, when Mayor de
Blasio achieved something he had been wanting to do for three
years: limiting the number of ride-sharing cars operating in the
city.

Tusk’s viewpoint poses interesting questions for tech startups
fighting incumbents in heavily regulated industries.

Is there still a time and place for Silicon Valley’s famous
resistance to government regulations? The most extreme example of
that attitude is Uber’s brash former CEO Travis Kalanick, who
fought them with gusto. But companies like Airbnb, FanDuel, Bird,
and the bevy of self-driving car companies are all having their
own stand-offs with city and state regulators. And in the years
before Kalanick’s spectacular fall from grace,
he was widely praised in the Valley for his tactics in taking
on the old-school incumbents…and winning.

In fact, in 2015 de Blasio tried to do this same thing, and limit
the number of ride share drivers. But Uber engaged in an all-out
assault of protests that was so powerful, it became the blueprint
for how tech upstarts could combat would-be regulators.

It also catapulted the take-no-prisoners political operative who
orchestrated Uber’s counter-regulation campaign, Tusk, into a
sought-after star helping other tech upstarts fight regulators.

Bradley Tusk
Getty
Images/Steve Jennings

Tusk was paid in Uber stock to help Kalanick navigate New York’s
notoriously thick taxi regulations in those earlier days. Those
shares of Uber, paid in lieu of Tusk Strategies’ usual fees, were
believed to be
worth $100 million in 2017. 

Tusk cashed out some of his Uber shares earlier this year, when

SoftBank invested in the company and bought up equity from
existing shareholders. However, he still owns a
significant chunk of shares in Uber, he said. 

But he says he’s never met Khosrowshahi, much less advised
him.

Still, he has some advice for Uber’s current CEO.

“What I would say to him: there’s a lot of areas where a kinder,
gentler approach makes sense. But taxi is a cartel. Uber only
exists because Travis and team were tough enough to take them on
and fight them tooth and nail in every city in the United
States,” Tusk said.

“And if you don’t do that, they are going to re-emerge,” he
warned. “They didn’t become nicer people or kinder people. 
Or, just because you have a better reputation than Travis, they
are all of a sudden going to treat you differently. More likely
they are going to see you as weak and they are going to come
after you.”

Do nice guys finish last?

And yet, just because tough tactics worked in the past doesn’t
mean they are necessary for the future, argues a person familiar
with Uber’s New York operations, who requested anonymity to
discuss the company’s internal deliberations on this latest city
council ruling.

Spencer Platt / Getty Images

“A lot has changed since 2015 in terms of driver and rider
sentiment and how they feel about Uber has declined
significantly. If this was a political campaign, Uber doesn’t
have a base anymore,” this person said, adding that Uber has
suffered a 30%-plus drop
in reputation, even among riders.

That drop would have “weakened” the company’s ability to rally
protesters, should they have tried a repeat of the tactics used
in 2015. 

Also, under Khosrowshahi, Uber doesn’t view the taxi
industry as the all-out enemy anymore, this person said. 

The company particularly has sympathy for the the drivers
themselves hurt by the rise of ride-sharing, the person said. Six
of them
have committed suicide in New York, blaming Uber for
destroying their livelihoods.

Plus executives believe that Uber, under Khosrowshahi, has won
back the good graces of regulators in London and Buenos
Aires, and that this is a better strategy than campaigning
against them in the long-term. 

Internally at Uber, executives nowadays didn’t see much of a
threat to their long-term business by capping the number of ride
sharing vehicles on the road at current levels in New York for a
year, this person said. They don’t believe that New York will
become a model for other cities instituting caps, as Tusk warns.

Meanwhile, even if Uber has moved on, Tusk has no shortage of
takers that want his brand of fight. He’s currently working with
electric scooter rental company Bird and daily fantasy sports
firm FanDuel.