Unstable Platforms

How Uber’s business model gains and loses legitimacy

Presentation structure: one guiding question per slide, then evidence-based answers with concept definitions and APA 7 page citations.

Main translation frame: legitimacy = legitimidad; business model narrative = narrativa del modelo de negocio.

Core source: Howcroft & Leaver (2025).

1) What is the core puzzle of the paper?

The paper asks why Uber looked like an unstoppable innovator, then quickly appeared fragile after legal, social, and market shocks. The authors argue that success depended on a legitimacy narrative that became vulnerable when hidden practices became visible.

Concept: Business model as narrative (modelo de negocio como narrativa) means strategic storytelling to align stakeholders.

(Howcroft & Leaver, 2025, pp. 369-370)

2) How do the authors define organisational legitimacy?

They use Suchman’s classic definition: legitimacy is a socially constructed judgment that an organization’s actions are appropriate within shared norms, values, and beliefs.

Concept: Organisational legitimacy = legitimidad organizacional.

(Howcroft & Leaver, 2025, p. 371)

3) Which types of legitimacy matter most for Uber?

Three types: pragmatic (does it benefit me economically?), moral (is it socially acceptable?), and cognitive (is it taken for granted as normal?). Uber’s model depended on all three, not only financial metrics.

Translations: pragmatic legitimacy = legitimidad pragmática; moral legitimacy = legitimidad moral; cognitive legitimacy = legitimidad cognitiva.

(Howcroft & Leaver, 2025, p. 372)

4) Why do business model narratives matter for start-ups?

For start-ups with limited history, narratives reduce uncertainty, attract capital, and justify growth. But narratives are selective: they foreground desirable elements and keep other practices in the background.

Concepts: disclosed practices = prácticas divulgadas; undisclosed practices = prácticas no divulgadas.

(Howcroft & Leaver, 2025, pp. 373-374)

5) What did Uber publicly disclose as its positive model?

Uber framed itself as sharing-economy innovation: driver opportunity, consumer convenience, and efficiency through digital matching. It emphasized cross-subsidies and network effects to scale and dominate.

Translations: sharing economy = economía colaborativa; cross-subsidization = subsidio cruzado; network effects = efectos de red.

(Howcroft & Leaver, 2025, pp. 378-380)

6) What were the key undisclosed practices behind growth?

The authors stress two hidden foundations: dependence on favorable capital conditions to sustain losses, and operation in legal gray areas to accelerate expansion and become “too big to ban.”

Translations: legal grey areas = zonas grises legales; too big to ban = demasiado grande para prohibir.

(Howcroft & Leaver, 2025, pp. 371, 380-383)

7) How did labor strategy support scale but weaken moral legitimacy?

Classifying drivers as self-employed reduced employer obligations and costs. Algorithmic management controlled behavior while keeping labor formally external, increasing flexibility but intensifying legitimacy risks.

Translations: self-employed workers = trabajadores autónomos; algorithmic management = gestión algorítmica.

(Howcroft & Leaver, 2025, pp. 383-384)

8) What triggered the legitimacy crisis after 2017?

Legal rulings, regulatory pressure, and scandals made controversial practices visible. That undermined moral legitimacy and fed financial doubt, producing weaker investor confidence.

Examples in the paper: UK worker-status ruling, Greyball controversy, and major trust failures.

(Howcroft & Leaver, 2025, p. 385)

9) How did moral damage translate into market outcomes?

As legitimacy eroded, funding became harder to justify: valuation expectations fell, fears of “down rounds” grew, and the IPO underperformed sharply (including a 17.6% drop in the first two trading days).

Translation: down round = ronda a la baja.

(Howcroft & Leaver, 2025, p. 386)

10) What is Uber’s “Catch-22” in the authors’ argument?

The same undisclosed practices that drive growth and pragmatic legitimacy also generate moral controversy. Once exposed, sanctions and reputational costs weaken investor enthusiasm, which then threatens growth itself.

Translation: Catch-22 = dilema sin salida.

(Howcroft & Leaver, 2025, pp. 387-388)

11) Why does this matter for Applied Geopolitics?

The case shows platform power is territorially contested: labor law, regulatory capacity, political lobbying, and data governance differ across jurisdictions. Platform expansion is therefore a geopolitical process, not only a market process.

Suggested translation: platform capitalism = capitalismo de plataformas; regulatory fragmentation = fragmentación regulatoria.

Inference based on the paper’s cross-jurisdiction legal and regulatory analysis (Howcroft & Leaver, 2025, pp. 383-389).

12) Which concepts should you keep in Spanish for class discussion?

Recommended glossary (EN → ES):

Organisational legitimacy → legitimidad organizacional

Business model narrative → narrativa del modelo de negocio

Disclosed / undisclosed practices → prácticas divulgadas / no divulgadas

Network effects → efectos de red

Algorithmic management → gestión algorítmica

Too big to ban → demasiado grande para prohibir

Catch-22 → dilema sin salida

(Howcroft & Leaver, 2025, pp. 371-388)

Reference (APA 7)

Howcroft, D., & Leaver, A. (2025). Unstable platforms: Uber’s business model and the challenge of organisational legitimacy. Accounting Forum, 49(2), 369-394. https://doi.org/10.1080/01559982.2024.2309018