Lyft, Uber, thus far escaping aggressive regulation
Targeted spending on Mullet, bonkers $$$ on California measure look to pay off
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When we took note of Lyft’s suddenly aggressive political spending in the fall, things were looking a bit precarious for the ride-sharing giant. Seattle was in the process of cracking down on Lyft and its arch-rival Uber within the city’s confines. Both companies had to be concerned about aggressive regulation, including a union-driven attempt to classify their drivers in Washington as employees, something that California had done a year earlier.
But fast-forward a few months, and their political future at the state level seems a bit rosier. Lyft’s heavy spending through Washingtonians For Independent Work, its political action committee, helped business-friendly moderate Democrat Mark Mullet narrowly defend his state Senate seat against a union-backed challenger from the left, blunting labor’s influence in that caucus.
Meanwhile, in California, Lyft and its allies in the gig economy put on a massive display of over-the-top political spending to largely roll back AB 5, that state’s 2019 law reclassifying gig workers as employees rather than independent contractors. Proposition 22 passed by nearly 3 million votes, winning more than 58 percent of the vote. In initiative politics, that’s a comprehensive ass-kicking that indicates AB 5 wasn’t popular. But Lyft and its allies also spent a jaw-dropping $200 million-plus to ensure victory, shattering the record for California ballot measures by more than $36 million. Lyft’s share was nearly $50 million. The initiative’s opponents — mostly labor unions — were outspent by more than 10-to-1.
The margin of victory makes that much money look like overkill, and it surely was. The Observer took a look at the ridiculously long roster of consultants who got paid on that campaign, and it’s clear that many were hired just to keep them from working for the other side. We know some of those folks, and they don’t all get along.
Lyft and its allies weren’t just trying to win. That campaign was a message to the Washington Legislature and lawmakers in every other state with the ballot initiative process. Short version: Our services are popular, and we’ll spend what it takes to pave over regulation we don’t want.
As we approach the one-month mark in the Legislature’s session, there’s no sign of any aggressive move to regulate ride-sharing or the larger gig economy. (Lyft declined to speak on the record for this story.)
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The closest thing to aggressive regulation of ride-sharing is Rep. Liz Berry’s bill aimed at reducing carbon emissions from ride-sharing vehicles in the future. Uber and Lyft both expressed qualified support of the bill, noting their own aggressive goals to move drivers to low-emission vehicles. For a deeper dive on the policy on that, check out Melissa Santos’ takeout over at Crosscut.
But even that small bit of regulation might be too much for the companies to swallow willingly. People involved in the negotiations tell the Observer that both Lyft and Uber worked against it behind the scenes, and it appears they found some sympathetic ears among the Republican minority. When the bill came up for a vote in the House Energy and Environment Committee, GOP lawmakers voted in a block against it.
In debate on the bill, Rep. Mary Dye, the ranking Republican on the committee, repeatedly used the phrase “side hustle,” a talking point from past Uber campaigns. It seemed out of place coming from Dye, who operates a 3,000-acre wheat farm near Pomeroy, far from any handy ride-share services. Rep. Dye didn’t return a message from the Observer. A similar bill died last year.
Lyft and Uber are also theoretically in the crosshairs in Senate Transportation Chair Steve Hobbs’s massive transportation package, which assumes $455 million from a new 50-cent per ride fee. But there’s currently no proposal to impose a regulatory framework on the companies that would collect that fee, and it doesn’t appear in the competing House transportation package.
More legislation aimed at Lyft and Uber could still emerge from this session, but don’t count on it. Both companies employ some of the best-connected lobbyists in Olympia, who will likely use the Legislature’s pandemic-limited bandwidth to slow-walk anything to their clients’ disadvantage. And if that doesn’t work, it’s clear they know the way to the Secretary of State’s office, which is where you start when you take your case to the voters.
From our canine correspondent…
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"including a union-driven attempt to classify their drivers in Washington as independent contractors, something that California had done a year earlier. "
I'm assuming this is a brain fart since you got it correct later in the piece, but it was an attempt to classify them as *employees*.