Things are good for Twilio. The cloud communications platform that powers apps and services, such as Lyft’s and Uber’s, announced on November 6 that third-quarter earnings had jumped 68% over the same time last year (to $168.9 million). But things are not good for Twilio’s hometown, San Francisco. The city’s been wracked by stubborn homelessness, soaring rents, severe income inequality, and a nasty fight over a ballot initiative that will create a $300 million business tax to fund solutions to those problems. Prop C, as it was called, passed by nearly 60%, but not before it became a flashpoint in a battle of words (and lots of cash) between Salesforce CEO Marc Benioff, who advocated passing the initiative, and Twitter CEO Jack Dorsey, who opposed it.
“This was a huge debate that in many ways tore the city apart–civic leaders against tech leaders, tech leaders against each other,” says Twilio’s CEO Jeff Lawson.
Two days after reporting its positive financial results, on November 8th, Lawson announced that the company would donate $1 million to help jump-start homeless assistance until the new tax kicks in. The money from the new tax won’t be paid out until 2020, and it could be delayed–or even nixed–by lawsuits asserting that tax initiatives need two-thirds approval to pass.
Twilio is committed to making Prop C successful here in SF. I’m inspired by the conversation that Prop C created – and Twilio is committing $1M to support homeless programs to help get the work started even before Prop C money gets deployed.
— Jeff Lawson (@jeffiel) November 9, 2018
Lawson says that the donation had been on his mind for a while, but that the actual decision was spontaneous. He doesn’t even know what organization (or organizations) Twilio would make the check out to.
Twilio’s donation is scarcely beyond a symbolic gesture–one third of one percent of what the new tax will bring in, and dwarfed by the $236 million that the city already budgets for housing assistance and homeless programs.
Salesforce CEO Mark Benioff spent twice as much, of his own money, for the Yes on C political campaign, and Salesforce added about $5 million more. The chief political opponent, payments company Stripe, spent half a million, and big Twilio client Lyft contributed $100,000 to the No campaign.
But symbolism could matter in a city drama as emotional as it is legalistic and technocratic. Like most San Francisco businesses, Twilio stayed out of the Prop C debate. But post-election, Lawson is urging tech and other companies to get on board.
“As far as I’m concerned, we as a city, we’ve decided that we’re tackling [homelessness] head on,” he says. “And we’re hoping that other business leaders, civic leaders, and nonprofit leaders who are focused on this problem, can just start stepping up and moving toward the solution part of this, as opposed to the debate.”
Prop c is the dumbest, least thought out prop ever. Please get the facts and vote no. Then lets all focus on real solutions for sf.
— mark pincus (@markpinc) November 3, 2018
Christin Evans, one of the three petitioners who put Prop C on the ballot, agrees that it’s changed the discussion. “I think it’s amazing that, through the Prop C discussion, there has been an increased awareness of the challenges and essentially the real need [to address the housing situation],” says Evans. A bookstore owner, she’s focused on outreach to local businesses for Prop C. “I think that part of [Twilio’s donation] is raising awareness, and incorporating charitable giving into the business framework is a terrific approach.”
As evidence of change, she points to the apparent conversion of billionaire Zynga cofounder Mark Pincus. On November 3, he tweeted that Prop C was the “the dumbest, least thought out prop ever,” prompting a quick attack from Benioff. On November 7, he tweeted support for helping the newly passed measure succeed.
Some good election results. 100 women elected to congress, gavin as gov, and even prop c, which we will all work to make a success for sf homeless.
— mark pincus (@markpinc) November 7, 2018
Prop C matters far beyond San Francisco, as a proxy battle over blame and expectations placed upon a booming tech sector in an increasingly unequal and polarized nation. “It’s been great to have business leaders taking a closer look at what has been a persistent local challenge for a long time,” says Evans. “And perhaps it will lead to broader change not just in San Francisco, and in California, but maybe even around the country.”
Critics of governments and nonprofits call them inefficient and unaccountable–and that money already spent on San Francisco’s homelessness problem isn’t fixing the problem.
Prop C advocates say that just keeping the number of homeless from growing is an achievement, as rents keep rising and the homeless count has been soaring in other cities. Programs have moved many people off the streets and into housing in San Francisco, but newly homeless people have taken their place. More money is needed to move beyond “treading water” and fully solve the problem, says Jennifer Friedenbach, executive director of the Coalition on Homelessness, which spearheaded Prop C.
Advocates also say that fabulously wealthy tech companies, which just got a 14% corporate tax break, can certainly toss a fraction of those savings at a new tax to help the least fortunate.
“Marc [Benioff] has always said, this is an immaterial tax,” says Lawson. Twilio hasn’t calculated the new tax burden, he says, but, “It’s not going to make or break anyone here.” Salesforce, a much bigger company, reckons it will pay $10-$12 million more per year. (Square’s Dorsey objected that, because of some local tax law arcana, the tax will have a greater impact on financial firms, reckoning there will be $20 million bill for his company.)
Lawson is a mellower personality than the stocky, prolific-tweeting, Hawaiian shirt-wearing Benioff–who’s spent hundreds of millions to put his own and his company’s names on public buildings around the city. But Lawson has become a growing voice for ethical obligations of the tech sector.
On October 29, he published an essay on Medium calling out tech companies for not taking a harder stance against white supremacists and other hate groups. “It’s in our control to decide who uses our product, and from whom we take money,” he wrote.
I ask Lawson how many Twilio customers have been dropped as a result of new terms of service written last year. “Luckily we have not had very many, or I’m not even sure any, clear cases where we had to kick people off our platform,” says Lawson. He adds, “We wanted to make our intentions absolutely clear. So if we’re faced with that, the decision is easy, and I think that every business leader needs to make their intentions clear.”
One of Lawson’s biggest clients, Shopify, faced criticism and calls for boycott for powering ecommerce on alt-right news site Breitbart. “I’m not going to talk about anyone in particular,” says Lawson, even though he already has talked about some social media companies.
“I absolutely empathize with Facebook and Twitter,” says Lawson, noting that they have a much harder challenge than Twilio. (Jack Dorsey is also CEO of Twitter.) “However, they solve a lot of hard problems when the hard problem is, ‘How do I match up the right ad so you see it and I make more money?'” he says.
Homelessness and income also fall into the hard problem category–not just on how to solve, but on how to get people together working on solutions. Stay tuned for more soul searching, debating, and maybe name-calling on this and many other ethical issues facing big tech.