Regulators will take this personally
A version of this post originally appeared in the Cyber Saturday edition of Data Sheet, Fortune’s daily tech newsletter.
Uber’s latest public relations fiasco comes via a report of how the ride-hailing company thwarts regulators with a dummy version of its app: When a would-be inspector opens the app, he or she is tricked with “ghost cars” that will accept a pick-up request, only to cancel it minutes later.
Pretty clever. Also pretty outrageous. While some libertarian types say Uber’s actions are justified, many more seem to think the stunt is further evidence of how the company is ethically unmoored.
You can also see it as another form of “growth hacking,” a Silicon Valley euphemism that describes breaking legal or moral rules in a quest for scale. The twist in this case is Uber’s growth hack, in the form of code named “Greyball,” took such blatant aim at the government.
The question is whether this will matter. In the case of consumers, they may cluck at Uber’s antics but are unlikely to abandon the company. Indeed, when I polled dinner party companions last night, everyone had heard the recent stories about sexism, driver misery, and Greyball. All of them tut-tutted—but also conceded they would take an Uber home because, well, the service is just so darn convenient.
And so it goes with consumers. They will express outrage on social media but ultimately keep using a product they like. The government, though, could be a different story. Many regulators are likely to take this personally and retaliate with a spate of subpoenas and fines, the likes of which Uber has never seen before.
My hunch is, for better or worse, Uber will weather this like it does everything else. In the meantime, CEO Travis Kalanik, who is looking for leadership advice, would do well to consult my colleague Adam Lashinsky’s helpful set of suggestions.