The big, shiny disruptive brands are losing their Teflon shield.
Both were called out on their poor management practices – Ryanair after a massive scheduling boo-boo that downed more than 2,000 flights and 300,000 customers, Uber after losing its TfL licence to operate in London.
The lesson for both has been that pushing down price can only take you so far. There’s more to a brand than its price tag. It’s time to stop pandering to greed and put service and substance back in the driving seat.
Ryanair boss Michael O’Leary isn’t in the habit of saying sorry but even he had to fess up and eat humble pie when it came out that the airline had messed up their pilots’ holiday roster.
He seems to have forgotten they need time off from their stressful jobs while we conveniently forget it's ultimately our demands as consumers that fuel the flight schedule.
We’re all complicit in bolstering these brands. We know they take the piss, yet we clamour for more.
The bottom line is just that. We want everything to be cheap as chips and to hell with the workers.
How else do you explain 750,000 signatures on a petition to have Transport for London reinstate Uber’s licence?
Never mind that the $70bn valuation company was left grovelling after some harsh criticism while simultaneously deciding to aggressively take on TfL in the courts to appeal the decision. Taxi for Uber? No way.
TfL branded the company not “fit and proper”, writing that its conduct indicates “a lack of corporate responsibility in relation to potential public safety and security implications”.
But that didn't seem to dent Uber’s support from Londoners keen to keep their cheap, if not cheerful, cabs running.
Meanwhile, the taxi app’s new boss Dara Khosrowshahi’s acknowledgement that his company’s culture has to change just might give Uber its London lifeline and open the door for a fresh licence application.
These disruptive brands have been allowed to thrive up until now thanks to an unholy alliance between consumerism and deregulation, but the regulators are handing in their invisibility goggles and starting to fight back.
Jonathan Taplin wrote in his book Move Fast and Break Things that Google “will do whatever it wants without asking permission, and the results will be so awesome that nobody will complain”.
That might have been true once upon a time. In June this year the EU hit Google, now a subsidiary of Alphabet, with a €2.4bn fine after ruling that it violated anti-competitive rules with its online shopping practices.
The fine is the largest financial penalty ever given by Brussels for a monopoly abuse case and followed an investigation that lasted seven years.
Our ravenous hunger to have everything cheaper and faster – the tech disruptors’ advantage over the old guard – has led to corners being cut all over the place and an unhealthy ‘anything goes’ culture.
In the rush for our latest fix, who hasn’t been guilty of turning a blind eye at least once? The feeding frenzy in Primark on a Saturday where parents load shopping baskets with a pile of kids tops for as low as £1 each is quite the experience. What could the profit component possibly be in a £1 top?
How these price points stay low is the elephant in the room of disruption businesses where ethics and labour standards quite clearly fly out the window.
We have to face an unpalatable truth, and if we want to change, we have to be the change we want.
Scratch the surface and you’ll find the true cost of your cheap clothes: slave wages for foreign factory workers.
Take Bangladesh. More than four million people work in the country's garment industry which accounts for 80% of foreign trade. H&M, Asda, Tesco, Primark and M&S all do their shopping there.
Nazma Akter, founder of the 37,000-member Awaj Foundation which fights for labour rights in Bangladesh, said in the South China Morning Post: "Consumers in [the west] have a big responsibility. They get things so cheap. They have to think about how these companies are doing business.
“The multinationals take our blood and our sweat. Consumers need to know where their clothes are coming from and what the working hours and conditions are. We need to look at the living conditions, not the working conditions."
Vivienne Westwood has been promoting the notion of Buy Less, but it’s a tricky concept to sell to consumers always on the hunt for more for less.
A big problem for price disrupting brands is that the only answer they can see to consumer demand is a constant price reduction. Made a cock-up? No problem. Just apologise and lower prices even more.
Ryanair is currently advertising one million seats discounted to £9.99 one-way from October to February. Flights from as low as £7.99 are available between the UK and some destinations and a one-way flight next week from London Stansted to Grenoble, southern France, next week was available for £5 at the time of writing.
It’s a boot sale and they know we can't resist a bargain. They rely on us to overlook company ethics and prioritise our purse strings while their priority is to keep those planes flying fully booked at whatever cost.
Ryanair boasts three characteristics that have yielded ever higher passenger numbers. It's cheap, it's reliable on the whole (up until now), and it knows how to make a virtue of publicity, whether good or bad.
In the space of a week, each of these pillars of strength has begun to bend under the strain of a self-inflicted problem that has put the company on a collision course with thousands of its workers. And here’s where it may be missing another trick.
Instead of making life hard for the people who work for it by using a high proportion of sub-contractors who can have little loyalty beyond their pay packet, companies like Ryanair and Uber could try nurturing their workforce, encouraging them to become brand ambassadors.
As Michael Brito, Head of US digital at LEWIS, says: “Engaged employees are an asset to any brand.”
Recent research by LEWIS showed that employees in the companies they surveyed had a genuine appetite to act as ambassadors for their companies and brands, but employers need to make it easier for them online.
That might all be a step too far for Uber and Ryanair, whose own pilots have called the airline a disgrace. Maybe it’s down to the consumer to get the ethics ball rolling and be the change after all.
It’s tough, but the only way to beat this price drug is to go cold turkey. We may end up paying more, but at least we don’t end up paying the price of abuse.