Recently the news has been dominated by the ‘disruptors’, Ryanair and Uber, competing for the title of the most reviled company in the eyes of their customers and their own staff.
Staff and customers alike are losing faith. Ryanair’s cancellation of 2,000 flights has left up to 400,000 customers angry at their appalling treatment and the company has been branded a disgrace by its own staff for missing a deadline to respond to demands for improved employment terms.
Uber’s list of misdemeanours, meanwhile, includes dubious business ethics, a poor relationship with drivers, sexism, and most recently the passenger safety concerns which have led Transport for London to declare Uber is not a “fit and proper” private car-hire operator; a decision that may in turn cost 40,000 jobs.
Surely such reckless disregard for customers and employees must come at a significant price to the business and perhaps even the ultimate price. Yet the business press appears to be viewing things differently.
Sky News confidently stated that "whilst cancellations cause turbulence at Ryanair...they won't bring down the airline". And the Standard called O’Leary absurd but declared this isn’t his "Ratner" moment.
For those of you too young to remember, Gerald Ratner turned a small retailer into a multimillion-dollar empire selling jewellery at affordable prices to the working class. When asked, “How can you sell this for such a low price?”, he famously answered, “because it’s total crap." The company’s shares dropped £500m in a matter of days and the rest is history.
I beg to challenge the headline writers. I think that Ryanair and Uber are in real danger of doing a 'Ratner'; being cheap is no excuse for treating your customers and staff as stupid. Such an attitude leads to a breakdown in trust and trust matters, increasingly so. Both chief executive officers could do with remembering that trust is at least as significant as price in influencing online purchasing decisions.
Edelman’s 2017 Trust Barometer explores the issues of trust in chief executive officers further. It reports: "We have moved beyond the point of trust being simply a key factor in product purchase or selection of employment opportunity; it is now the deciding factor in whether a society can function."
It goes on to say there is a lack of belief in leaders (including business leaders) who damage the stature of their institutions. The credibility of chief executive officers is falling and the public is hungry for increased regulation for business. The onus is now on businesses to prove that it is possible to act in the interest of customers, employees, shareholders and society alike.
Will Ryanair and Uber survive? I do hope so. Both have pioneered innovative business models. The Uber concept is brilliant, the app is transparent and straightforward, and whilst there have been safety issues which must not be swept under the carpet, in many respects one can argue Uber is safer than some other forms of transport (no cash and GPS tracking for example).
Ryanair is really, really cheap. It has democratised air travel, giving more people the opportunity to travel to more places, more often, and its'Always getting better' programme is getting there, with allocated seating and the ability to book connecting flights.
But if Ryanair and Uber want to be competing for the honour of being one of the most revered companies in the future, it is time for the leadership to step up and for the brands to behave responsibly, listen to their customers and treat their employees well.
Jane Asscher is chief executive officer and founding partner at 23red