The Customer May Not Always be Right, but He is the Customer

Res Publica
The Customer May Not Always be Right, but He is the Customer
By David Trumbull -- July 25, 2014

Last week I wrote about Uber and Lyft, two relatively new car services that are making a big dent in the taxi business. The services are wildly popular with riders who, for years, have been stuck with not much alternative to broken down wreck taxis, driven by surly drivers who refuse to put on the air conditioning in the summer, pad the bill, refuse to accept credit cards, and are so engaged in their loud mobile phone conversations in foreign languages that they don't pay attention to the road and put the passengers at risk of serious injury.

Passengers see Uber and Lyft as the solution to poor quality taxi service. Local governments see Uber and Lyft as the problem. The Peoples Republik of Cambridge has tried repeatedly to ban Uber and Lyft. Cambridge is not alone in opposing giving riders the options they want. But, in city after city, the politicians have had to back down. They are learning that they cannot stand athwart history yelling STOP. The people want Uber and Lyft and will not tolerate elected and appointed officials abusing their offices to come to the aid of the old taxi monopoly.

It is, for me, exciting to watch a supposedly immovable object, the taxi company/municipal government symbiotic relationship, get pushed aside by the irresistible force that is People Power. People Power is being asserted elsewhere, in the current struggle over the future of the Market Basket chain of food stores.

The Greek drama that is the quarter-of-century-old Demoulas family feud over control of the business that Athanasios and Efrosini Demoulas started in Lowell in 1916 is worthy of a made-for-TV miniseries. The family lawsuit in the early 1990s over ownership nearly destroyed the business, but it survived, and indeed thrived.

Market Basket customers love the store. We love the low prices. We love that although it is a chain, the selections in store are tailored to the local community -- the Methuen store abounds in Italian delicacies, the North Andover store serves the Syrian community, the Chelsea store is a little Latin America. The employees are extremely knowledgeable, helpful, and cheerful, making marketing a pleasant experience. As for the employees, they are well paid and treated with respect by management. Who needs a union when your boss makes you feel like a family? This model of low prices, great selections, and a happy staff has worked, making the Demoulas family one of the richest in the Boston area.

By now you have seen the news -- massive walkouts of Market Basket employees, a widespread customer boycott, and rallies across the state demanding the re-instatement of Arthur T. Demoulas as CEO. How will it end? I don't know. But however it ends, the board of this closely held, family-owned business will be forced to act in response to a spontaneous outburst of People Power.

I have not seen anything in America quite like it in some time. Next year will mark the 30-year anniversary of the Coca-Cola Company's disastrous launch of New Coke. Then, too, a corporate board learnt the lesson that there is someone more powerful than the stockholder; that is the Customer.