For new ventures in contested fields, securing legitimacy is a paramount challenge. In the platform economy, firms often enter with a potent entrepreneurship rhetoric, but as they face contestation over their labor and regulatory practices, this rhetoric can devolve into a calculated misrepresentation—a legitimacy lie. Yet, the process by which such lies are performed and defended over time as a form of institutional work remains undertheorized, leaving a gap in our understanding of how platform firms achieve institutional entrenchment. Uncovering this process, we theorize the legitimacy lie as a form of dark institutional work. Using 47 driver interviews, extensive archival materials, court documents, and leaked internal communications (the Uber Files), we analyze the contested operations of Uber and Ola in India (2013–2020). Our analysis reveals a recursive two-phase process. In Phase 1 (Proactive Framing), platforms construct the legitimacy of the “micro-entrepreneur.” In Phase 2 (Reactive Escalation), legitimacy threats trigger a defensive escalation of dark work, including sharp increases in symbolic rhetoric, the material imposition of opaque algorithmic control, and the relational co-optation of powerful stakeholders. This dark work, in turn, provokes driver resistance, which constitutes a new legitimacy threat that refuels the cycle. This recursive process functions as the mechanism that enables the platform's institutional entrenchment. We advance institutional work scholarship by theorizing this process, explaining how the successful performance of a legitimacy lie allows a venture to cross a critical threshold from a fragile reliance on normative legitimacy to a state of durable structural power.
