Naughty And Nice Unicorns: Which Startups Are Getting Coal In Their Stockings In 2016?

Billion-dollar startups were chock-full of kindness and controversy this year. These are our picks for the best deeds and worst offenses.

Naughty And Nice Unicorns: Which Startups Are Getting Coal In Their Stockings In 2016?
[Photo: Flickr user Torbakhopper]

Every year, we cook up a list of who’s been naughty and who’s been nice among the billion-dollar startups known as unicorns. This year was a relatively quiet one, but it wasn’t without its fair share of goodwill toward consumers, in addition to the usual malfeasance and misconduct. Fast Company looked at the latest ranking of 183 unicorn startups provided by CB Insights and cross-referenced it against some of the year’s biggest startup news.

Below is our list of the best deeds and worst offenses of 2016, committed by the most hotly followed companies. (Don’t worry—we’ve checked it twice.) Read on to see who’s getting coal in their stocking this year.

NICE

Vice Media: Known for underpaying its fleet of trust-fund millennial writers, last year Vice Media agreed to voluntarily recognize the union of its editorial workers as they sought collective bargaining. This year, Vice has continued on the nice track, offering up a plan to hire former inmates into apprenticeship positions across its editorial and production divisions. Vice will partner with the Center for Employment to help seed workers into the program. The announcement comes as the media unicorn is diving into the “Future of Incarceration” through a series of videos and articles devoted to exploring the prison system and the difficulties of trying to change it.

Airbnb: Last year, Airbnb caved to pressure to pay its taxes (and subsequently launched a tone-deaf advertising campaign telling various public institutions how they should spend that money). This year and next, it is seeking out 700 tax deals in order to make filing taxes easier on its users, according to the Financial Times. The agreements allow Airbnb to collect and send in taxes on behalf of its users. As of the end of November, the home-rental service had 200 such deals locked down. There is some concern from the organization American Family Voices, according to the Huffington Post, that these agreements are too opaque and offer more tax breaks to homeowners than they do to hoteliers. (After all, owners of commercial spaces get taxed more heavily than personal homeowners.) But we’re willing to give Airbnb a “nice” rating for attempting to usher in a more fluid tax preparation process. Also this year, Airbnb joined a campaign with the UNHCR to raise awareness about the refugee crisis. The company offered to match contributions up to $1 million.

Stripe: This year, the payments platform Stripe launched Atlas, which allows overseas businesses to incorporate as Delaware companies. Very quickly after launching, it struck up a deal with Havana-based Merchant Startup Circle and extended the service to Cubans. The announcement came nearly immediately after President Obama loosened the constraints around Cuban-American relations. Though very few Cubans have internet access at the moment, opening this opportunity to Cuba now allows businesses to join as they crop up. The move will essentially help facilitate access to the U.S. economy for Cubans, and that’s good news for both countries.

Chobani: Though not on CB Insights’ list, the Greek yogurt startup Chobani is estimated to be worth $3 billion, and its deserves a “nice” mention. This year, its CEO, Hamdi Ulukaya, gave the company’s 2,000 employees a 10% stake in the business. On average, employees were granted $150,000 worth of stock, but those who had been there longer were given larger shares. You can buy a lot of yogurt with that.

NAUGHTY

Uber: Ever a scrooge, Uber has made our Naughty list yet again, but not for flouting regulations and ignoring bans in various cities and countries. This year, Uber is getting coal because its employees may have used the platform to spy on celebrities and ex-significant others. A former forensic investigator for Uber says he was fired for calling out a lack of consumer information security at the company, according to the Center for Investigative Reporting. He said that employees at Uber were known to make use of a function called “God View,” which allows someone to tap into a user’s trip and see where they are. The “God View” feature was first reported on by BuzzFeed in 2014, but at the time, no one knew about any actual abuses, only the potential for misuse.

The Honest Company: This year, the not-so-honest company got slammed with lawsuits saying its products are not as natural as it claims. In 2015, the company was accused of having ineffective sunscreen, but in 2016, the complaints grew louder. A suit filed in New York District Court accused Honest Co. of putting toxic ingredients in supposedly plant-based shampoo and body wash. Another suit, this one from the Organic Consumers Association in California, accused the company of putting non-organic ingredients in its baby food, although that one was dismissed. Meanwhile, the Wall Street Journal found a “significant amount” of sodium lauryl sulfate in the company’s detergent, an ingredient it promised not to use. Of course, Honest initially condemned these accusations, but a report from September says the company may be working on a new formula that avoids the use of SLS.

Magic Leap: The secretive augmented reality company is either way behind schedule or its technology just isn’t very magical. Last year, Magic Leap promoted the idea that its headset allows people to enter a “mixed” reality (as opposed to virtual or augmented). Supposedly, that means its headset creates imagery that is so lifelike, it really becomes believable. It further cemented this notion with a video of a child’s hands holding a lifelike miniature elephant. It’s not a demo, but it’s been used as such to stir wonder around its product. But a report from The Information says that the company’s misleading product demonstrations and YouTube videos don’t accurately reflect what the actual technology looks like or does. The company’s headset is more helmet-like than goggles. Furthermore, Magic Leap still hasn’t launched a product, while Microsoft already has an AR headset on the market.

Lyft: Like other on-demand platforms, Lyft classifies its drivers as contractors, not employees. But this year we learned, at least in part, what Lyft saves by doing business this way. Reuters reported in March that drivers could have claimed $126 million in expense reimbursement if they had been employees. Lyft settled that class-action lawsuit for $27 million—a fraction of what its drivers were potentially owed—but what the plaintiffs really wanted was to be made employees. So it’s coal for you this year, Lyft.

About the author

Ruth Reader is a Brooklyn based writer for Fast Company who covers startups, company culture, and financial technology.

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