It's hard to miss how many technology companies engage in increasingly questionable -- and occasionally reprehensible -- conduct. This is something beyond the unsavory frat bro behavior of people like Uber Technologies Inc. founder and former Chief Executive Officer Travis Kalanick. No, I mean companies whose very business models seem to be built around elements of fraud, deception and abuse of employees, partners and clients.
Maybe it is a sign of what happens when too much capital sloshes through too few startups. Whatever the underlying cause, one cannot help but notice some of the awful behavior in the venture-funded tech world. Consider these recent headlines:
-- "Court Rules It's Totally Cool for Yelp to Extort Businesses"
-- "Grubhub’s new growth hack is listing restaurants that didn’t agree to be listed"
-- "Delivery apps like DoorDash are using your tips to pay workers’ wages"
There may be any number of reasons these companies might engage in such shoddy behavior, but the most obvious one seems to be that their business models are so lame that they must do shady stuff simply to keep the lights on.
Disruption is a consequence of true innovation; that isn't the issue here. No, this points to something deeper and more troubling about the startup landscape.
Let’s consider a few of these companies:
Grubhub: The food-delivery company is in hot competition with other startup delivery companies. One of the things it's done: buy up domain names of its restaurant partners without their permission or even knowledge, thus making it hard or impossible for a restaurant to establish its own website without Grubhub's blessings. (Grubhub’s defense: It’s in our contract’s fine print.) The company also published shadow websites and misleading phone numbers of its restaurant partners to pull web traffic and phone orders away from them.
I imagine Grubhub being pitched as the Uber of food delivery (though Uber also is in the food-delivery business). One key difference: There was no entrenched local monopoly similar to taxis. Instead, there are tens of thousands of local restaurants, many of which already deliver or offer takeout. Uber and Lyft used technology to break the monopoly: Grubhub and its related divisions -- Seamless, Eat24, MenuPages and AllMenus -- instead insert themselves as middlemen between restaurants and consumers. This seems to be true regardless of whether the restaurant is a willing participant or not.
Maybe it's the big decline in Grubhub's share price that has led the company to stoop so low: the stock has fallen about 65% from its high in 2018.
Yelp: The review site seems to have morphed into what its critics sometimes characterize as an extortion racket. The company has been accused by restaurant owners of hiding positive reviews unless those establishments advertise on Yelp.