Shifting Gears
How Uber became an unchecked regulatory power in Washington, D.C.
Co-authored by Katie Wells, Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor; Kafui Attoh, CUNY’s School of Labor and Urban Studies; and Declan Cullen, George Washington University’s Department of Geography
Before driving full-time for Uber, Elijah (all names in this piece are pseudonyms) worked as a claims adjustor for hurricane-damaged houses in Florida and as an agent at a temporary staffing company in Boston. When we met last July, this disabled military veteran was working 40–60 hours each week in Washington, D.C. on various platforms: Uber, Lyft, Caviar, and DoorDash. As a 49-year old college graduate, Elijah said he probably wouldn’t be driving for much longer:
“Drivers are being openly fleeced… I don’t like what’s going on. So I’m trying to figure out what my next move is.”
But by April 2020, after the onset of the global pandemic, Elijah was indeed still driving full-time. To protect himself, he outfitted his car with, in his words, “a hasty partition” of plastic between the front and back seats. He is now taking home, he believes, a fourth of what he typically earned before March.
Though it took Elijah less than 24 hours to sign up and begin driving for Uber and its peer platforms, it will likely take months for him to receive unemployment insurance. In D.C., where Elijah lives, the online unemployment claims system for gig workers did not go live until April 24, a full six weeks into the city’s shut-down. To qualify for unemployment insurance, he learned, he had to first apply for traditional unemployment insurance, obtain a rejection, and then re-apply for the new federally-funded pandemic-specific version. A feat, to say the least.
If Elijah’s application does make it through these hoops, the unemployment compensation will be significantly smaller than it would be if D.C. recognized Elijah as an employee rather than an independent contractor. Traditional unemployment insurance is calculated by gross income, whereas the new pandemic version is based on net income, which does not account for the numerous expenses that Elijah must pay to work as a platform driver. Though D.C. last year strengthened its law against misclassification in the construction industry, the city — like most places in the U.S. — has not confronted similar misclassification issues in the platform workplace.
And it’s not hard to figure out why. Our ongoing research into public policy about ride-hailing in D.C. has found a cozy relationship between platform companies and local officials. For most of the past ten years, Uber has become a de-facto institutional actor in the District. Here is a brief history of how D.C. laid out the red carpet for Uber, in four acts.
Act One: A Warm Welcome
In 2012, D.C. officials awarded Uber Black — the original ride-hailing service with licensed delivery drivers — its own business category (“Transportation Network Company”) and exempted it from existing taxi regulations and taxi commission oversight. D.C. officials also decided against a ban on surge pricing, a requirement for ten percent of Uber’s fleets to be wheel-chair accessible, and a price floor. The Washington Post put it this way: D.C.’s ride-hailing legislation would have “little practical effect” on Uber’s actual operations in the District.
Uber, not beholden to any public, secured itself as a regulatory actor in D.C. and swiftly put a black box over its practices, creating a power imbalance.
Act Two: A Wholesale Coup
In 2014, D.C. officials offered similar protections to UberX — a low-cost service that opened the door to any individual with a private automobile, a regular driver’s license, and a willingness to pick up strangers. In a wholesale coup for the company, D.C. officials eliminated the taxi commission and created a new department with the power only to sanction and fine platform companies: The new Department of For Hire Vehicles could not access data about how many vehicles were on the road; how many rides were taking place; or how many registered drivers were operating on the platforms. Even the most basic information on the operation of Uber became virtually impossible to get. In an unusual move, the D.C. legislation made data about ride-hailing immune from the federal Freedom of Information Act. Meanwhile, Uber and D.C. officials created promotional videos, held ribbon-cutting ceremonies, and collaborated on transit plans. The District’s Mayor repeatedly celebrated this warm relationship. She said: “We’re excited to be one of the early partners with Uber.”
In summer of 2016, we sat down with one of Uber’s lobbyists for D.C., a young man who we’ll call Zack. We asked him about how D.C. ended up with a set of laws that were, in his words, “the most welcoming and the most friendly” to the company. He said:
“So D.C., they adopted our view of the world, I think. And that’s why it’s one of the best models for us.”
When we probed him on what that world view was, he said it was one in which Uber would “set the standards.” He went on:
“We can do all those functions that a regulator would, but we can do it at the pace of business.”
In July 2019, a former senior official from the Mayor’s office described how this collaboration unfolded: “Uber wanted to run this thing and then assure us that all their drivers were protected. And it was kind of a trust-us attitude.” He went on:
“I remember being on a few panels where I had to sort of remind people about why we have these regulatory systems to begin with. Right? They are for health and safety and worker protection and consumer protection and all these things. You have all these tech people who are saying, ‘Let’s throw it all out.’ And you have people like me saying, ‘Really?’”
Uber, not beholden to any public, secured itself as a regulatory actor in D.C. and swiftly put a black box over its practices, creating a power imbalance. Just as Data & Society’s Alex Rosenblat found informational asymmetries between platforms and workers, we are finding informational asymmetries at a different scale: between platforms and policymakers.
Uber increasingly sold itself as capable of providing a public service, but fiercely fought any regulation that would actually require it to do so.
Act Three: Becoming a Public Service
In the years that followed, Uber made claim after claim about how its services benefited D.C. The company said: a decrease in driver compensation would result in increased driver earnings (D.C. drivers, it claimed, made $17 per hour); low-income neighborhoods had better-than-ever access to reliable transit; and black residents had refuge from the taxi industry’s plague of racial discrimination. However, no evidence supported these claims. Uber increasingly sold itself as capable of providing a public service, but fiercely fought any regulation that would actually require it to do so.
In cities across North America, Uber presented itself as an indelible partner for urban governments. Its presence in cities moved beyond lobbying to transit partnerships for cash-strapped places. When Uber started, its motto was “your own private driver.” Today? “Transportation as reliable as running water.” Platforms, in D.C. and elsewhere, are becoming new institutional actors and shifting urban governance beyond public-private partnerships and outsourcing models to even more speculative strategies whereby cities relinquish regulatory power altogether.
The data sharing agreement was a direct, though quiet, challenge to the self-governing arrangement that made D.C. a model city for Uber.
Act 4: Data Sharing
In 2018, the red carpet for Uber in D.C. showed signs of wear. That year, the D.C. Council put a provision in its budget to tax ride-hailing as a way to increase financial resources for Metro. New York and Chicago had implemented similar levies. The Council’s chairman also quietly slipped in a key revision that promised to finally open up the black box of Uber’s operations in the city. It was called the Private Vehicle-for-Hire Data Sharing Amendment, which would give public officials basic (but not real-time) data on where, when and how many trips were conducted in the city.
The arrival of the coronavirus pandemic has made D.C.’s inroads on data sharing seem trivial. Access to archival data on Uber’s operations has not compelled the company to pay its workers a minimum wage, offer workers compensation, or provide PPE to workers like Elijah. Still, the 2018 amendment is important for at least one reason: It pokes a hole, however small, in the curtain that has long hung between Uber and the local government. The data sharing agreement was a direct, though quiet, challenge to the self-governing arrangement that made D.C. a model city for Uber.
So what?
By allowing Uber and other platform companies to self-regulate, local officials have not only hurt workers — like Elijah, who deserves decent unemployment compensation — but also D.C. at large.
Though it has been operating here for almost nine years, Uber has not paid a single cent into D.C.’s unemployment insurance fund. The unemployment system is modeled on the idea that companies are in part responsible to maintain a social safety net. When companies do not contribute (or are not forced to contribute) to unemployment insurance programs, the public foots the bill. States like New Jersey and California have recently taken legal action to recoup hundreds of millions of dollars in unpaid taxes.
On the one hand, D.C.’s adoption of Uber’s “view of the world” may explain its inaction on Uber’s unpaid tax bill. On the other hand, as unprecedented numbers of D.C. workers apply for unemployment insurance, the inaction may become harder and harder to understand.
Will this city, which allowed a platform company to become a new institutional actor, shift gears? Or will it continue to let Uber shape how governance gets done, which publics are prioritized, what infrastructure is saved, and who survives the pandemic? For Elijah and countless other workers who depend on the city’s unemployment trust fund, the answer to this question will be a significant one. The last time we spoke, Elijah was still waiting on his claim to be approved and, because he wants to take care of his family, still trying to make ends meet in an unsafe workplace.
Katie Wells is an Urban Studies Foundation Postdoctoral Research Fellow at Georgetown University’s Kalmanovitz Initiative for Labor and the Working Poor. Kafui Attoh is an Associate Professor in the City University of New York’s School of Labor and Urban Studies. Declan Cullen is an Assistant Professor in George Washington University’s Department of Geography.
*Our study, which we’ve written about here, here, and here, draws on 4 years of qualitative data. In 2016, we conducted, recorded, and transcribed 28 hour-long interviews with: 11 current and former policymakers and city employees; 3 journalists and bloggers; 8 taxi drivers and labor organizers; 3 Uber lobbyists and employees; 2 transportation policy advocates; and 1 disability rights advocate. In 2019 we conducted repeat interviews with five of the original participants as well as 25 new stakeholders. That year, we interviewed: 15 current and former policymakers and city employees; 6 labor expert and organizers; 6 transit experts and organizers; 1 disability rights advocate; and 1 platform company employee. To contextualize and triangulate this data, we draw on analyses of policy documents and media reports, field observations around the region, and a longitudinal study of 40 current and former Uber drivers.
