Over the past two years, Uber and Lyft have radically expanded their lobbying efforts in a bid to protect their business model’s misclassification of drivers as independent contractors, according to an Open Secrets report.
During 2019, the report states, Uber and Lyft each spent over $1.2 million lobbying California politicians in a failed attempt to kill Assembly Bill 5, which says gig economy companies must classify workers as employees. Now, the companies have turned their attention and deep pockets to Washington.
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In the first half of 2020, Uber spent over $1.2 million on lobbying focused on the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the Protecting the Right to Organize Act (PRO Act), which passed the House in February and would give collective bargaining rights to gig workers. In lobbying issue reports filed for both bills, Uber described some of its activities as concerned with the “the deployment of self-driving cars”, “Future of Work”, and “anti-competitive activities.”
The CARES Act provides unemployment benefits to workers including gig economy drivers through a federal fund, something Uber CEO Dara Khosrowshahi asked Donald Trump for in a March letter. This allows states to eschew the lengthy and expensive legal process that would seek reimbursement and penalties from companies that misclassify their workers and which refused to pay into state unemployment funds, such as Uber in New Jersey and California.
When the Senate passed the CARES Act on April 16th, Uber CEO Dara Khosrowshahi took to Twitter to celebrate.
A coalition of legal scholars warned in an April open letter to state unemployment agencies that the CARES Act would not only jeopardize the ability of ride-hail drivers to receive timely assistance (and any aid after the stimulus ended), but tempt states to let misclassification continue due to benefits coming from a federal fund.
Uber has deployed 40 lobbyists this year, Open Secrets reports, with 34 of them categorized as “revolvers,” or lobbyists that were previously public servants. Lyft itself has spent around $760,000 on DC lobbying this year and has 36 lobbyists—29 of which are revolvers.
Over the years, both companies have also hired extensively from the Obama administration. Lyft hired Obama’s Transportation Secretary as its chief policy officer; Valerie Jarrett, one of Obama’s closest senior advisors, joined Lyft’s board; chief Obama strategist David Plouffe ran Uber’s global policy and political strategy, then became Uber’s chief adviser and a board member—he was also fined for illegally lobbying Rahm Emanuel on Uber’s behalf; the list goes on.
Uber and Lyft have taken their attempts at persuasion to the public at various turns. In August, Khosrowshahi made the case for why state governments should take care of it in a New York Times op-ed. In the lead-up to a looming deadline (since delayed by the courts) for classifying drivers as employees in California, both Uber and Lyft publicly threatened that they would exit the state temporarily.
While Uber and Lyft have bought more time in California with an emergency stay that delays the end of their driver misclassification, the alternatives are bleak either way. Both companies have floated the idea of adopting a franchise model, but it’s not clear that threats from labor and the courts would dissipate given that franchise models have generally been bad for workers and considering that such a switch actually addresses none of the legal questions about a gig company’s responsibility to its workers.
Even if Uber and Lyft were to successfully lobby away all the legal and labor threats to their business model, neither company has ever turned a profit, and the model is likely doomed.
Motherboard reached Uber and Lyft for comment on the companies’ lobbying practices and goals, but did not receive a response.
