A messy message: Travel firms can afford to upset supporters of President Trump
WRITING a few weeks ago, Gulliver envisioned a close partnership between the then president-elect, Donald Trump, and the bosses of tech firms; one that could remove regulation and pave the way to a future of autonomous electric vehicles.
Since then politics has intervened. Specifically, Mr Trump signed an executive order barring citizens of seven Muslim-majority countries from travelling to America. Upon the announcement of the order, the transportation industry sprang into action. New York taxicab drivers staged a boycott of sorts, refusing to pick up passengers from John F Kennedy Airport to show solidarity with those affected by the ban. In response, Uber, a ride-hailing firm, sensed a business opportunity and dropped surge pricing for JFK pickups, effectively cutting the cost of hailing an Uber from the airport.
That proved to be a mistake. Progressives across America accused the firm of breaking the strike. Some noted that Travis Kalanick, Uber’s boss, had joined Mr Trump’s economic advisory council in December. A #DeleteUber campaign was launched. More than 200,000 people reportedly removed the app from their phones. And then the real jockeying began.
Companies often try to stay out of politics for fear of losing customers. America is a polarised country, and an appeal to one side of the political divide can quickly alienate the other. But in the travel and transportation industry, the story is more complicated, particularly in the contentious Trump era. America may be split close to 50-50, but the urban professionals who comprise such a large share of the country’s travellers (and Uber-hailers) are not. Just 10% of Manhattanites voted for Mr Trump. In San Francisco, 9% did. In Washington, DC it was 4%.
In this environment, staying neutral over the biggest political controversies, such as the travel ban, can be more dangerous to a company than taking sides; losing a moderate share of the big anti-Trump majorities in these places is a bigger risk than losing a larger share of the small group of his supporters. Uber didn’t immediately grasp this lesson. But Lyft, its smaller rival, did. After the immigration order was executed, the firm quickly announced a $1m donation to the American Civil Liberties Union, which was fighting the ban. Hordes of progressive Uber users made the switch to Lyft.
Uber tried to make amends. It announced its own $3m defense fund to help drivers facing immigration issues, and then Mr Kalanick stepped down from the president’s advisory council. But the company had already lost hundreds of thousands of users. And Lyft, which has struggled to gain market share, suddenly got a new breath of life from a shrewd political move.
Meanwhile, another transport-technology visionary started to feel the pain from his proximity to Mr Trump. Elon Musk, the boss of Tesla, an electric-car company, is also on the president’s advisory council. After Mr Trump signed the travel ban, Mr Musk did what chief executives are generally supposed to do—he tried to steer a middle path. He stayed on the council but tweeted gentle criticism of the order, describing it as “not the best way to address the country’s challenges”. That tepid response led some Tesla customers to cancel their orders of the forthcoming Model 3. Again, America may be divided, but Tesla owners are mostly not. There are 28 Tesla dealerships in California and seven in New York—states that overwhelmingly rejected Mr Trump in November—but none in many of the places that most strongly supported him, such as Wyoming, Nebraska, Arkansas and Mississippi. Like Mr Kalanick, Mr Musk tried to make amends. He defended the American legal system on Twitter after the president appeared to question the legitimacy of judges who struck down the travel ban. But as with Mr Kalanick, it was too late to control all the damage.
On Sunday night, the Super Bowl shed more light on how firms wish to portray themselves in the current climate. Advertising slots during the football game are the most expensive on American television—$5m for a 30-second spot. Several companies used that precious airtime to project inclusivity in a tacit rebuke of Mr Trump. Foremost among them was Airbnb, which ran an ad titled “We Accept” that showed faces of every colour and creed and stated “We all belong”. The firm’s boss, Brian Chesky, had spoken out strongly against the travel ban, telling his employees that “it is a direct obstacle to our mission at Airbnb”. Once again, where executives might ordinarily have been squeamish about opposing a signature policy of a recently elected president, Mr Chesky may have seen a bigger risk in not speaking up. The ban not only turns off much of the cosmopolitan set who make up the lion’s share of his customer base, it also risks putting off travellers across the world from visiting America—people who might have used the firm’s services.
As if matters were not confusing enough for chief executives, the backlash can trigger its own backlash. Supporters of Mr Trump launched their own boycott of Starbucks after the coffee chain pledged to hire thousands of refugees in response to the executive order. As with protests on either side, it remains to see how successful the action will ultimately prove. After all, the Seattle-based company can probably afford to turn off some conservatives if it boosts its business among the latte-liberals.