Trump to Uber: You’re Welcome

Nov 29, 2016 · 2 min read

Donald Trump reportedly plans to nominate Elaine Chao to be Secretary of Transportation. Not quite “draining the swamp” ― she was deputy transport secretary under George H.W. Bush and labor secretary under W ― but clearly a qualified candidate around whom establishment Republicans (and maybe even Democrats) can rally.

There also should be some cheering from Silicon Valley.

In a speech last November to the American Action Forum, Chao argued that many of America’s labor laws were antiquated, specifically in regards to the gig economy. In doing so, she explicitly discussed Uber:

Take the ride sharing company Uber, which published an analysis of a representative sample of its workforce of more than 160,000 drivers in 2015. Nearly half of the Uber drivers surveyed had a college degree or higher. 62% had another full-time or part-time job. Nearly half had health insurance coverage through another job, spouse or family member. More than two-thirds reported having financial dependents at home. So it’s no surprise drivers cited the flexibility to set their own schedule as one of the principle reasons for partnering with Uber. Another frequently cited reason was the need to supplement fluctuating income from other sources. The survey also uncovered interesting compensation data. The after-tax, net hourly earnings of Uber drivers were generally equal to or higher than the average hourly earnings of traditional taxi drivers or chauffeurs. This is despite the fact that nearly one-third of taxi drivers and chauffeurs work 50 hours a week or more, compared with only 7% of Uber drivers.

Two things jump out from this speech:

  1. The incoming Transportation Secretary has a significant background in labor policy issues that are core to the vitality of ride-sharing companies (at least until autonomous vehicles take over).
  2. Her default position is to implicitly trust data provided by private tech companies, without outside verification. (In addition to Uber, Chao’s speech cited numbers from Airbnb and pre-public Etsy).

There has been a lot of concern in Silicon Valley that, outside of tax policy, the Trump Administration will be hostile to disruptive technology companies. At least for those in the transportation sector, those fears may have just been allayed.

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