Evaluation: For as soon as, Amazon loses a reputation contest


Amazon’s shock announcement Thursday that it’s canceling its deliberate growth to a brand new company campus in New York was greeted with celebration by native activists and politicians who had opposed the deal, and frustration by native officers — and various actual property brokers, who had eagerly anticipated an inflow of well-compensated tech employees.

For some, Amazon’s determination will symbolize a political failure, during which officers and native labor leaders blew a once-in-a-decade probability to convey hundreds of high-paying jobs to New York.


For others, it displays the hubris of one of many world’s most beneficial corporations, which sought billions of in tax incentives it didn’t want, after which received chilly ft when native organizers and officers objected to that largess.


However greater than something, the battle poses a problem to one in every of Amazon’s bedrock beliefs: that being beloved by prospects is all that issues.

By any measure, Amazon is likely one of the hottest corporations on this planet. It persistently ranks atop lists of People’ favourite manufacturers, and its obsessive concentrate on buyer satisfaction has created a technology of shoppers who can’t think about buying anyplace else.

Amazon can be overwhelmingly common in New York, the place polls have persistently proven majority of metropolis residents supported the corporate’s deliberate Queens growth.

However completely satisfied prospects don’t essentially translate to political energy.

Amazon acted as if its reputation — and its early help from key politicians, together with Gov. Andrew Cuomo and Mayor Invoice de Blasio — would clear a path to political concessions. However the firm miscalculated the facility of native organizers, who turned what may need been a simple development undertaking into an all-out political brawl. Amazon was caught flat-footed by the opposition, and belatedly mounted a attraction marketing campaign, taking out full-page newspaper advertisements and sending mailers to Queens residents in help of the deal.

In the long run, confronted with a alternative between preventing and fleeing, Amazon packed its luggage.

“This can be a case of serious political malpractice, greater than the rest,” mentioned Bradley Tusk, a enterprise capitalist and former marketing campaign supervisor for Mayor Michael Bloomberg.


Tusk, who now acts as a “fixer” for know-how corporations trying to break into regulated markets, mentioned that Amazon’s response to native opposition was a tone-deaf misstep.

“Amazon didn’t perceive the native politics on the bottom in any respect,” he mentioned. “They only took Cuomo’s phrase for it that everybody can be supportive.”

Amazon, which says it nonetheless plans to increase in Northern Virginia and Nashville as initially deliberate, blamed a small however vocal minority for sabotaging the deal.

“Whereas polls present that 70 % of New Yorkers help our plans and funding, a variety of state and native politicians have made it clear that they oppose our presence and won’t work with us to construct the kind of relationships which can be required to go ahead with the undertaking,” the corporate mentioned in an announcement.

Native enterprise leaders echoed that criticism.

“New Yorkers needed Amazon to come back. The individuals who stay in Queens needed Amazon to come back,” mentioned Julie Samuels, the chief director of Tech:NYC, a nonprofit group that represents the town’s tech trade. “A handful of politicians received in the way in which.”

In the meantime, de Blasio characterised Amazon as a thin-skinned weakling, saying in an announcement that “you must be robust to make it in New York Metropolis.”

This combat echoed the political drama surrounding two different tech corporations that had issue breaking into metropolis politics: Uber and Airbnb, which confronted early political opposition regardless of broad reputation with prospects.

A number of years in the past, in response to a regulatory crackdown that threatened to crush its enterprise mannequin, Uber constructed a political conflict machine, hiring armies of lobbyists and political consultants — together with Tusk — to make its case to officers throughout the nation. It enlisted customers, too, placing personalized icons inside their Uber apps and urging them to petition Metropolis Corridor for a reprieve. Airbnb used the identical ways, mobilizing its customers within the cities the place it confronted restrictive rules.

Amazon actually is aware of easy methods to combat. Final 12 months, it efficiently lobbied to kill a proposed enterprise tax in Seattle that will have raised about $50 million a 12 months for inexpensive housing and different applications.

It might have mounted the same marketing campaign in New York. Or it might have taken a web page out of the Uber and Airbnb playbook, urging Amazon Prime members in New York to contact their representatives and agitate for a deal.

As an alternative, the corporate did its lobbying in non-public, preferring back-room negotiations to a loud, public-facing marketing campaign.

“They failed to understand that this market was completely different than the others,” Tusk mentioned.

“They didn’t do their homework.”

For Uber and Airbnb, after all, the stakes of political success had been existential. Amazon’s measurement and market dominance have given it the flexibility to stroll away from even a multibillion-dollar deal comparatively painlessly. New Yorkers will nonetheless purchase their bathroom paper and pet food from Amazon, even when the corporate doesn’t have an workplace in Lengthy Island Metropolis.

Some New Yorkers who supported Amazon’s growth plans might contemplate the corporate’s retreat proof of the shortsightedness of politicians.

“I hope there might be actual classes realized right here,” Samuels of Tech:NYC mentioned. “They had been taking part in with fireplace, and look what occurred.”

However this must be a teachable second for Amazon, too.

For years, the corporate succeeded wildly by catering to buyers, and betting — largely accurately — that its sterling buyer repute would insulate it from criticism over its labor practices, union resistance and different company shortcomings.

However that period could also be over. In New York, a minimum of, there are some issues that reputation can’t repair.


Kevin Roose is a New York Occasions author.