Uber’s Corporate Domination of Democracy Is Not “Progress”

Note: Read the new Public Citizen report: Disrupting Democracy: How Uber Deploys Corporate Power to Overwhelm and Undermine Local Government.

“I like pissing people off,” Uber CEO Travis Kalanick told Fortune in a 2012 interview about his company’s confrontational tactics.

Mission accomplished.

Residents of Austin, Texas, were positively livid after Uber and Lyft unleashed an $8.6 million political action committee and bombarded residents with TV ads, political campaign mail, emails and text messages urging them to vote for “Proposition 1,” a referendum that would repeal the requirement that drivers for Uber, Lyft and other app-based ride-hailing companies pass fingerprint background checks, just as taxi drivers do.

“# of Ads, email, people knocking on my door & texting me to tell me to vote for Prop 1 is ridiculous. Please stop,” tweeted one annoyed Austinite. “Hey @Uber I am literally voting AGAINST prop 1 in Austin because you have people constantly texting me to do so. STOP texting me. Seriously,” tweeted another.

One might think meeting this kind of requirement should be no sweat for a $50 billion corporation like Uber. If local taxi drivers can do it, Uber can do it, right? And complying with the rule, which was passed by council members by a 9–2 vote, is probably cheaper than, I don’t know, creating an $8 million PAC, right?

Wrong, apparently.

Uber claimed its ability to keep doing business in Austin hinged on Proposition 1’s passage — and launched a campaign equating the stricter background checks with an attempt by the city to “take Uber away.”

Ultimately, the referendum effort failed lost 56 percent to 44 percent. Both Uber and Lyft withdrew from Austin after the vote — but with the prospect on the horizon of Uber-supported state legislation to preempt Austin’s local authority, the conflict is far from over.

Austinites were understandably dumbfounded by this attempt by a powerful corporation to overwhelm and undermine their city government.

They should know that they are not alone.

A new Public Citizen report, Disrupting Democracy: How Uber Deploys Corporate Power to Overwhelm and Undermine Local Government, presents detailed case studies of conflicts between the corporation and local lawmakers and regulators in Austin, Texas; Boston, Mass.; Chicago, Ill.; New York, N.Y.; Philadelphia, Pa.; San Francisco, Calif.; Seattle, Wash. and Washington, D.C.

In each case examined in the report, Uber’s expansion is facilitated through the conversion of money power into political power. When city officials try to enact laws or enforce regulations the company opposes, it fights back by using political-style campaign tactics and large-scale lobbying.

There is a pattern to Uber’s conflicts with cities. The company often launches in cities in defiance of local officials’ interpretations of local regulations, while at the same time insisting on the legality of its business. When local law enforcement and other officials respond, the company mobilizes a campaign to “save Uber.” Likewise, the company resists local legislative efforts that attempt to require the company to follow standards similar to those required of taxicab and limousine companies, framing them as attempts to “shut down” Uber. Because customers are required to provide an email address to access the company’s app, the company is uniquely poised to turn its customer base into grassroots lobbyists who will sign a “save Uber” petition when the company asks.

These petitions, which can generate tens of thousands of signatures, help legitimize the lobbying campaigns the company deploys. These campaigns often include high-powered lobbyists, including some who are former colleagues of the government officials they are lobbying. Uber usually wins these battles against rules and regulations the company opposes, but when it loses, it keeps fighting. When cities pass laws that Uber opposes, the company commonly seeks to have them preempted with Uber-approved state law or repealed through voter referenda.

Living in a democracy means the people have the power to choose their destiny, and it means local governments should make decisions based on what’s best for the public, not what’s best for an invasive multibillion-dollar corporation.

When a single company or interest has the power to overwhelm democracy’s deliberative and decision making processes because investors reward rapid corporate growth over respect for local democracy, something is broken.

The result may be “progress” for companies like Uber. But for the prospect of a democratic government that exists to serve the people, it is a big step backwards.

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