One way to get reader’s attention is to declare some activity, celebrity, business or popular style “dead.” No more growth. The hype is over. The transitory fascination revealed.
One widely published writer using this headline is Jared Brock (jaredabrock.medium.com) who in January wrote a blog declaring that Uber and Lyft are Dead.
His essay focuses on the $200 million “dark marketing” campaign the delivery companies used to defeat proposition 22 in California which would have classified gig workers as full-time employees.
The Business Model Critique
After describing the ride-hailing services efforts to kill the new regulation, he also points out their “predatory” financial strategy which is how others have characterized the firms’ business models:
Luckily, Uber and Lyft occupy a very precarious perch in the taxi universe. Like Airbnb, they’ve extracted a huge amount of value from their employees and stock investors, but what real value have they contributed in return?
If you strip it to the core, you realize the only thing any of these predator app companies actually do is build pretty-looking booking services and then weaponize colossal amounts of debt and private equity to strangle their competition, as while marketing the myth that they’re doing no harm.
The Meaning of “Dead”
But Brock has another, more fundamental interpretation of “dead” than corporate demise. More than a rapacious business model, it also refers to the absence of an underlying contribution to society. He tells the story of returning to his hometown after years away. The main street is full of chains that have replaced the local shops, cinema, and restaurants. He remarks:
And it hit me: this place is dead. Spiritually dead. Morally bankrupt. Worthless in all the ways that truly matter.
That’s Facebook. That’s Instagram. That’s Airbnb. That’s Uber and Lyft and Robinhood. Predator companies, leaders in the menace economy. They create nothing, contribute nothing, mean nothing. They just take, broker, skim, flay. They’re dead in the future, yes, but also dead to me right now, and dead to a world that wants to flourish.
When People are Left out of the Calculation
Brock’s critique is that these companies leave people and their communities out of their business calculations. Gig, not full-time employees. Rental housing, not owner occupied. National versus local solutions.
When challenged they follow the tactics one economist described as the menace economy: “the pursuit of wealth at the expense of other human beings.”
Is there a Lesson for Credit Unions?
Time will tell if this interpretation of dead accurately foretells the fate of Uber/Lyft. Brock’s concern is broader than platform technology companies. What happens when organizations become “spiritually dead, morally bankrupt?”
These are human failings, not limited to organizations built with new technology. Companies can easily equate financial performance, market appeal or innovation with sustainable success.
Credit unions were formed with a different focus: does what we do benefit our members?
Recently I received the following member assessment of a pre-pandemic merger of two strong, long-serving credit unions:
I have found no personal benefit in the combination of the two organizations.
The employees I hear from are frustrated in numerous ways and lack a sense that their jobs are still secure.
I attended the virtual Annual Meeting . . .A highly scripted meeting seemingly meant only to satisfy the requirement to hold it. Incumbent board members were re-elected by acclimation as there were no other candidates on the ballot.
I am keeping a checking account open but transitioning other relationships over to another credit union.
There are numerous examples of well-capitalized credit unions merging to benefit executives or using members’ accumulated reserves to buy out bank owners. Several very large credit unions have even adopted the fintech model of just an online platform, few or no branches. The token rhetoric for these initiatives refers to corporate growth, technology advantages and/or diversification goals, not member value.
Is the future of credit unions these cooperative merger combinations within, bank asset purchases from without, or the total embrace of digital-only? Is it possible these options are merely the last hurrah of credit unions that are already “dead”?