As Seattle cracks down, Lyft preps for a statewide fight

Company quietly forms new PAC, starts writing big political checks

As Seattle imposes a strict new regime on ridesharing companies designed to ensure drivers make at least the city’s minimum wage, Lyft appears to be gearing up for a statewide fight on the issue.

As Heidi Groover reported in The Seattle Times, the city’s new pay structure, adopted Tuesday, echoes what New York did to try to boost driver earnings, which prompted Lyft and Uber to stop hiring new drivers there and restrict many drivers’ access to the app. If you want to get way down in the weeds on the policy and underlying research, check out Kevin Schofield’s deep dive over at Seattle City Council Insight.

But months before the council acted, Lyft was already signaling a new level of seriousness at the state level. Major corporate players frequently turn to the state Legislature when they face aggressive local regulation, hoping the state will pave over the locals with an easier regime. When that fails, they sometimes take the issue directly to the ballot. Big Soda did that in 2018 with Initiative 1634, which effectively banned new soda taxes everywhere but Seattle after the City Council imposed one there.

On one side of this fight you have the political power of organized labor, which argues that Lyft and Uber drivers are exploited and underpaid. On the other, the popularity of the services — who doesn’t like a cheap, convenient ride to wherever you’re headed? — and the financial clout of companies that argue they’re transforming transportation and giving drivers the opportunity to earn money on their own schedules.

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Here’s what Lyft did, months ahead of the council’s action:*

Without fanfare, the company created a new political action committee, Washingtonians For Independent Work, registered with the Public Disclosure Commission on July 5. The chairman of the committee is Jordan Markwith, Lyft’s head of external affairs. Three days later, Lyft “loaned” the committee $1.2 million.

Its first check, for $50,000, went to another PAC, East King County Jobs, which is part of a network of business-funded PACs under the umbrella of Enterprise Washington. We’ll get to them in more detail down the road.

East King County Jobs spent 50 grand with these people, a nominally labor-friendly political consultancy, on digital advertising in a hotly contested state Senate race ahead of the August primary. The ads supported State. Sen. Mark Mullet, the business-friendly moderate Democratic incumbent in the 5th Legislative District in east King County, and opposed his progressive challenger, union-backed nurse Ingrid Anderson. Labor unions are spending big to unseat Mullet, whom they see as a barrier to worker-friendly legislation of various kinds. Lyft joins a broad array of business interests who are trying to save Mullet. Anderson won the primary by 491 votes; the two face off again in November.

A more labor-friendly Legislature might well pass something similar to California’s AB 5, which requires gig economy companies like Lyft to treat their drivers as employees rather than independent contractors without benefits or job security.

Last week, on Sept. 21, Lyft’s new PAC sent East King County Jobs another $150,000.

Lyft declined to discuss its spending, offering instead this statement: “Lyft believes it is important to engage in the political system in order to advocate on the issues that reflect our values.”

Lyft’s new PAC also made a classic four-way offering of campaign cash to leaders of the Legislature. On July 17, Washingtonians For Independent Work wrote checks of $25,000 each to the Reagan Fund, the Harry Truman Fund, the Kennedy Fund and the Leadership Council. Those are soft-money PACs controlled by the leaders of the four caucuses — two Republican, two Democratic — in the Legislature that target close races that determine the balance of power in Olympia.

A bipartisan four-way contribution like that is a sign of seriousness in Olympia, a signifier that you’re a player, and is typical of longtime powerhouses such as the Washington Realtors Association. Expect Lyft to bring an aggressive lobbying game before and after the Legislature convenes in January.

But perhaps the most interesting item in Washingtonians For Independent Work’s disclosure was $17,500 in consulting fees to Spectrum Campaigns of Sacramento, CA. Lyft already employs some of the smartest lobbyists in Washington State, so why a Sacramento shop? Well, Spectrum Campaigns is Ned Wigglesworth, a hired-gun ballot initiative consultant with a track record of both passing and defeating controversial ballot measures in California.

On the ballot in California this year is Proposition 22, which would largely exempt ride-share drivers from California’s new law classifying them as employees. Among the many consultants getting paid by the massive $184 million campaign for that measure, which figures to be one of the richest in California history: Spectrum Campaigns.

Because ride-sharing is highly popular with the public, Lyft and Uber have been able to use the ballot initiative process as a big stick. Before Tuesday’s city council vote, Seattle’s regulatory system for ride-sharing was a compromise forced by a 2014 initiative campaign mounted by Uber and Lyft. That city-level campaign forced the Seattle City Council to walk back a more restrictive system designed to protect the politically connected traditional taxi industry.

So one possibility is that Lyft and others could bankroll a statewide initiative next year to overturn Seattle’s new law or whatever emerges from the Legislature next year. Or it could proactively run an initiative to pass a law that protects its business model.

But statewide ballot measures are expensive, as Lyft is learning in California. Big Soda and its allies spent $20 million to pass their soda tax ban two years ago. Lyft may be spending big now in the hopes that it won’t have to spend huge next year.

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*The Washington Observer found these tracks this summer while trolling the Public Disclosure Commission’s database for story ideas.

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