Moneybox

Actually, It’s a Good Thing That Travis Kalanick Quit Trump for Business Reasons

It’s been a bumpy ride.

Money Sharma/AFP/Getty Images

Reinstall Uber?

On Thursday afternoon, five days after the start of a boycott that led masses of users to delete their accounts, Uber CEO Travis Kalanick announced his resignation from President Donald Trump’s Business Advisory Council.

The council, which is scheduled to meet on Friday, includes the CEOs of a number of the country’s biggest companies, including General Motors, Pepsi Co., IBM, and Walt Disney. Those executives have been notably tepid in their responses to Trump’s Muslim ban (“not a ban,” “not for Muslims,” whatever), especially in contrast to their counterparts at Amazon, Starbucks, General Electric, and Coca-Cola—to name a few big companies not represented on the council.

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And Kalanick treaded softly at first, stopping short of condemning Trump’s order in a cautiously worded statement on Saturday. Then the boycott happened. On Sunday, he released what was easily the most strongly worded statement of any CEO on the council, calling the ban “wrong and unjust.” And on Thursday, he shored up the company’s bona fides with urban America, where it does most of its business, by relinquishing his seat at the president’s table.

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“There are many ways we will continue to advocate for just change on immigration but staying on the council was going to get in the way of that,” Kalanick wrote in a memo to employees. “Joining the group was not meant to be an endorsement of the President or his agenda but unfortunately it has been misinterpreted to be exactly that.”

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It’s the right result, if for the wrong reasons. Kalanick sets a precedent for his former colleagues on the business council: If you won’t quit Trump for the Constitution, do it for the bottom line.

The Uber boycott was built on charges of strike breaking, although its main beneficiary was Uber’s rival Lyft, which also continued driving to JFK during the strike. Kalanick, whatever his faults, issued as strong a condemnation as any business leader. And the strongest from a leader with a guaranteed audience with Trump.

Meanwhile, it’s obvious that Kalanick quit the council not because of his burgeoning disgust with the president’s policies, but because of the swift reaction from customers. What had emerged, he wrote to employees, was a “perception-reality” gap.

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Kalanick has been playing out, in public, the dilemma that opposition-minded business leaders and politicians have faced for months: Does a meeting with Trump offer influence, or just symbolic support? Or, as I put it on Tuesday, how much is a seat at the table worth, and how much does it cost?

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So far, we’ve seen conflicting evidence from those who have reached Trump’s ear.

At times, Trump’s craving for approval transforms him, chameleonlike, into a reflection of his audience. In a November audience with the New York Times, for example, Trump softened his views on global warming and said Secretary of Defense James Mattis, then a retired general, had changed his mind on the efficacy of torture. In an earlier off-the-record meeting with the Times he appeared to reveal that his anti-immigrant talk was all bluster.

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But this month, Trump reverted to his old, pro-torture stance. One of his first executive orders was to repeal an Obama-era prohibition on coal companies dumping mining debris into streams. And on immigration, his rhetoric has proved more exact than most of us imagined. Some anti-Trump conservatives, like Mitt Romney and Marco Rubio, have groveled to their old rival and have little to show for it. Collaboration-minded figures like Kalanick think they might catch his ear on one issue or another. But his impetuousness and his desire to please cut both ways.

Trump can turn, but like another preening, pursed-lipped New Yorker with a limited vocabulary, he can’t turn left. His reversion is toward corporatism—on display in his Goldman hiring spree, his kowtow to big pharma execs, the selection of Tom Price for health and human services secretary—and toward nativism. The best argument for maintaining proximity to Trump is Steve Bannon, the slob lobbyist for white America who has imposed his worldview in Trump’s executive orders. But is Bannon really changing Trump’s mind, or just channeling the president’s existing opinions?

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Which brings us back to Kalanick, and the other CEOs and politicians that aspire to Trump-whisper—or at least secure favorable treatment on regulatory or tax issues. We don’t know that Trump won’t listen. But we do know that Trump loves props. And enlisting yourself (and the good name of your company) in the service of the president, in exchange for a couple hours of face-time each month, makes you a prop.

So Kalanick may have been making a business decision when he quit, not a political one. But what if the others did too? What if a band of CEOs told him: Revoke the Muslim ban, or we’ll walk? The business threat they face from Trump is just as severe, if less immediate—from his policies on trade and immigration, and from the instability he injects into the U.S. legal system and its international diplomacy.

Their reluctance is understandable. We know they’re “scared out of their minds about being attacked” by the president. And GM, IBM, and co. are not directly dependent on consumers like Uber is. Activists can’t so easily twist their arms. But shareholders should.

If CEOs are afraid to quit for the sake of the Constitution, there’s another argument: Do it for the bottom line.

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