Consumers, fired up by the #DeleteUber campaign on social media, are eager to show their anger toward President Donald Trump by switching allegiance to rival Lyft. But doing so may benefit prominent Trump supporters Peter Thiel and Carl Icahn, billionaires who have invested in the second-largest ride-hailing company.
Thiel, a co-founder of PayPal (PYPL), was an early backer of the president and spoke on his behalf at the Republican National Convention. Now an adviser to Mr. Trump, Thiel has been mentioned as a potential Supreme Court nominee. He invested in Lyft through Founders Fund, his venture capital firm.
The 80-year-old Icahn is one of Wall Street’s best-known activist investors and in 2015 bought a $100 million stake in Lyft. Icahn Capital’s John Christodoro represents his interest on the Lyft board. Icahn is an unpaid advisor to the Trump administration on overhauling government regulations.
Lyft has tried to put some distance between itself and its investors. “We don’t always agree with our investors and aren’t afraid to say so,” the company told CNBC. “We do respect their right, and that of every American, to freedom of expression.”
Uber came under fire last Saturday when it quit offering surge pricing after members of the Taxi Worker’s Alliance joined protests at New York’s John F. Kennedy International Airport over Mr. Trump’s executive order restricting immigration from seven majority-Muslim countries. Complaints soon flooded Twitter (TWTR), accusing the San Francisco-based company of profiting off protesting cab drivers by cutting prices, a charge that Uber denied.
Critics, however, weren’t impressed. Some Twitter users posted pictures of themselves deleting the Uber app and installing Lyft. To make matters worse, some users couldn’t immediately shed the Uber app: the company was inundated with so many account deletions that it had to figure out how to automate the process.
Uber Chief Executive Travis Kalanick had already angered opponents of Mr. Trump because of his involvement with the administration through his work on a government advisory council. However, Kalanick spoke out against the administration’s immigration restrictions in a Facebook post, calling them “unjust.” He vowed to compensate workers for their lost earnings. He also created a $3 million dollar legal defense fund for affected drivers.
Kalanick has never met Mr. Trump in person, an Uber spokesperson noted.
The controversy is affecting the ride-hailing companies though its long-term impact isn’t clear. Uber is much larger than Lyft, with a valuation topping $60 billion, while the market estimates its rival’s value at less than $10 billion.
According to App Annie, Lyft ranked 15th Wednesday in its rankings of U.S. iPhone apps, an increase from 37th place on Jan. 27. That was the day before the “delete Uber” campaign began. During that same time, Uber fell to 20th place from 11th. Lyft may have topped Uber in downloads on Sunday for the first time, according to The Verge.
Since Mr. Trump’s election, many Fortune 500 companies have run afoul of his supporters and critics alike.
Starbucks (SBUX), for instance, is in hot water with Mr. Trump’s fans over CEO Howard Schultz’s plan to hire 10,000 refugees globally over the next five years. Critics have questioned why the Seattle-based coffee chain was hiring foreigners at a time when many homeless veterans are struggling, apparently unaware of company’s work with members of the military, their families, and veterans groups.
Opponents of Mr. Trump have started #GrabYourWallet, which encourages consumers to avoid doing business with companies that have supported the president or have business ties to him. The campaign includes more than two dozen companies so far.