Uber Learns That As a New Company, To Be Is To Lobby
Jesse Walker wrote earlier today about how municipal politics always tends to overvalue the entrenched interests vs. competitors that might make things better for consumers, in the context of Uber and others in that smartphone app ride summoning space eternal fights against local government petty tyranny.
One of the biggest ways that government hobbles the economy is the amount of resources and time that any company, especially one trying to innovate, has to dedicate to paying pros to help convince the government to let them keep operating (and often, to do things that make it harder for others to operate).
Los Angeles Times has surveyed Uber's growing into a lobbying machine in California as it fights off simultaneous assaults about whether its contractor drivers should be legally treated as employees, and whether it is supplying sufficient information about its operation to state regulators:
Uber now spends more on lobbyists in California than Wal-Mart, Bank of America or Wells Fargo…[its] spending on Sacramento lobbyists puts it in the top 3% of companies and organization….
Uber's growth strategy works both financially and politically. The playbook can be summed up in three phases: Rush into new markets; build loyalty among drivers and customers; use those constituencies to help fend off blowback….
Before last summer, Uber had never spent more than about $42,000 on lobbying in any three-month period, according to state records.
But when [proposed legislation on their insurance and background testing policies] came to a head late last summer, Uber increased its spending more than tenfold, doling out $474,182 between July and September. The lobbying roster included the powerful firm Gonzalez, Quintana & Hunter, which also represents the Building Industry Assn. of California and the city of Los Angeles.
So far in 2015, Uber has paid about $200,000 to lobbyists. That's more than 10 times the amount spent by the limousine industry and nearly four times greater than the taxi industry's trade group.
There are more subtle ways to try to get politicians on your side than frontal lobbying:
Uber also courts politicians in ways that do not have to be publicly disclosed, like campaign donations or lobbying bills.
For instance, Uber has been a major sponsor of the U.S. Conference of Mayors. That organization, for mayors of cities with a population of 30,000 and higher, meets several times a year. Uber has sponsored events at several of those meetings, including a lavish late-night reception at the Astor Ballroom in Washington, D.C.'s St. Regis Hotel last January.
In August 2014 — when cities were grappling with whether and how to regulate Uber — Sacramento Mayor Kevin Johnson, the mayors conference president, conducted a one-on-one onstage interview with Uber founder Travis Kalanick at a conference event. In January, he did the same with Uber executive David Plouffe, a former political operative who ran President Obama's 2008 campaign.
The company last October donated $50,000 to the African American Mayors Assn. — a group Johnson created just a few months earlier. Uber acknowledges the donation but declines to say how much it has paid to the Conference of Mayors.
Sadly, whatever it was, it will likely never be enough to stop. As long as officeholders have power over those trying to make a living, it behooves those trying to make a living to appease the officeholders.