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Uber and Lyft Are Charging Through Washington’s Revolving Door

The ride-share firms push regressive labor and transportation policies—and they’re stocked with Obama alumni. Would Biden welcome or blacklist them?

Illustration by Woody Harrington

On Labor Day, Uber released its first “climate assessment” report, admitting that the average trip taken on its service is 41 percent more carbon-intensive than a typical car ride. Two days later, Lyft and Uber drivers gathered in Oakland, California, under a darkened sky. As wildfire smoke filtered the sun into an apocalyptic sepia, drivers and organizers from Gig Workers Rising blasted the ride-hailing companies’ campaign for Proposition 22, which would undo a 2018 California law that makes app-based drivers eligible for traditional employment benefits and would put new restrictions on legislators’ ability to change labor law in the future.

This month has offered stark reminders that the two largest ride-hailing companies have been a toxic force: eroding labor protections, worsening climate change, and corroding democratic oversight. It should catch the eye of progressives mobilizing to influence the makeup of a possible Biden administration because, if the past is any guide, the next move for these firms will be to worm their way into the halls of power and seize the regulatory tiller for themselves. 

Earlier this month, more than 140 environmental organizations called on the Democratic nominee to ban fossil fuel executives and lobbyists from his team. Citing the mantra “personnel is policy,” progressives have warned against appointing Wall Street veterans to the Treasury Department. It makes sense to add Uber and Lyft alumni to this “Do Not Appoint” list and jam the revolving door that’s recently opened between the ride-share companies and the U.S. Department of Transportation.

For two years of the Trump administration, policy at the department was set by Derek Kan, formerly Lyft’s general manager in California. While serving as the agency’s undersecretary for policy, Kan helped defang environmental regulations, writing rules that encouraged grant applicants to discount the cost of carbon emissions. He injected an unwelcome dose of Silicon Valley boosterism into the department, telling an audience at the Brookings Institution that Elon Musk’s perpetually overhyped Hyperloop was the type of “disruptive” transportation in which the federal government should invest.

Brian Barnard, a top aide to Transportation Secretary Elaine Chao, moved to Uber’s D.C. office last year, joining Obama administration veterans like Tony West and Susan Hendrick. One of President Obama’s closest advisers, Valerie Jarrett, holds a seat on Lyft’s board, and Lyft’s chief policy officer is Anthony Foxx, secretary of transportation from 2013 to 2017.  

As Alex Pareene recently wrote, “American governance at every level is hollowed out and incapable of performing essential functions.” In transportation, this manifests as broken sidewalks and missing curb ramps, bus lane projects that take longer than a presidential term to complete, and public engagement that fails to engage much of the public, sidelining Black and brown residents as a matter of course. The department recognized this truth while Foxx was in charge. That’s what makes Foxx’s new role seem so painfully ironic: The ride-hailing companies’ legacy is diametrically opposed to the Obama administration’s own transportation priorities, which included strengthening labor protections and empowering local governments to take a strong hand in planning. Foxx’s example demonstrates the extent to which the right kind of pecuniary inducements can transform those who swing through the regulator-to-private-sector revolving door.

In Foxx’s case, the philosophical distinctions are whiplash-inducing. While most federal transportation funding flows directly to states, under Foxx the DOT sent billions of dollars it controlled to local projects. Foxx’s deputies wrote new software and sent nonprofit consultants around the country to help cities plan transportation projects. Housing and transportation grants went to Minneapolis to fight displacement around light-rail lines and close racial gaps in access to bus shelters, to northern New Jersey to assist community development, to Boston to advance fair housing near transit. 

While federal administrators worked to rebuild the muscle of local planners, Uber and Lyft took advantage of municipal weaknesses, often gleefully. When New York City proposed a cap on ride-hailing fleets, Uber built a “De Blasio mode” in its app that showed 25-minute waits for cars and urged users to lobby the mayor. When Austin enacted fingerprint requirements for ride-hail drivers, Lyft and Uber pulled their service, then convinced Texas lawmakers to preempt local rules. Uber entered new cities illegally, then wrote code to deceive law enforcement personnel looking to catch drivers. 

For years, nearly every attempt cities made to require the companies to share trip data ended up in court. Little wonder, because when researchers scraped together enough data to conduct independent research, they found that many drivers earn less than minimum wage and that the companies make traffic worse and reduce ridership on public transit, hardly ideal given that transportation is the leading contributor to U.S. greenhouse gas emissions.

When the companies contracted with governments, they often chose weak partners—the better to draw up one-sided “partnerships.” In 2015, Florida’s financially challenged Pinellas Suncoast Transit Authority replaced two bus routes with a program that gives customers a $5 discount on Uber and taxi rides. As researchers from the nonprofit Shared-Use Mobility Center found, Uber refused to share detailed trip data with the PSTA, which meant officials couldn’t fully understand the program’s impact. Agency staff relied on aggregate usage numbers provided by Uber to justify continuing the service but discovered a programming glitch had inflated ridership for months. Lyft agreed to participate in the program but dropped out the day before launch, after PSTA had already printed materials with Lyft’s logo.

As ride-hailing has become more established, Lyft and Uber have shown a new, measured willingness to cooperate. In 2018, the companies agreed to share limited data sets with cities and have even created their own public-facing data dashboards. The companies’ wonks and the wonks at city planning agencies have entered detente. 

But whenever regulators seek to address employment conditions for drivers, it’s back to total war. During the Obama years, the National Labor Relations Board cracked down on misclassification of independent contractors; under Trump, the board has  issued a broad rollback of these efforts, including favorable guidance specific to ride-hail drivers. When Seattle passed legislation allowing drivers to unionize, Lyft and Uber called in the U.S. Chamber of Commerce to fight it to a standstill. The companies’ effort to pass Proposition 22 has become the most expensive initiative campaign in California’s history, featuring harassment of critics coordinated by P.R. firms known for killing environmental rules and farmworker union drives. For his part, Foxx now calls traditional employment, and the benefits that come with it, “an old toolset that doesn’t quite adapt to the 21st century.”

Keep in mind that Lyft and Uber are not privy to some unique technology. When the companies pulled out of Austin four years ago, home-grown ride-hailing firms quickly filled the void. On-demand transit is provided as a subsidized public service in the Minneapolis suburbs and parts of the Bay Area

But the two largest ride-hailing companies are aspiring monopolists. They are unprofitable—in fact, they typically lose billions of dollars annually—but that’s immaterial to a Silicon Valley playbook focused on scale. By raising massive amounts of capital, the companies can burn years and years of money, flooding cities with cars at below-market prices, bringing down wait times for riders. They blow hundreds of millions of dollars on lobbying to avoid paying billions to their workers. They are happy to sacrifice profit for market share, biding time until autonomous-vehicle technology enables them to dispose of their drivers or until competitors, including public transit, are weakened to the point of collapse. But government regulators threaten this entire business model, so the next step is to embed like-minded lieutenants within the key regulatory agencies. 

Transportation in the U.S. is already rife with privatization, technological saviorism, and exploitative labor agreements—all elements of a political economy that denies Americans the better public transit systems they want. We need federal decision-makers who will unwind this and make new commitments to public infrastructure and public planning. (Full disclosure: I am a co-author of both reports linked in the preceding sentences.) 

A Biden administration shouldn’t welcome policymakers who will abet a plan to give away the store to the ride-share firms, whether out of overcredulity or neoliberal ideology. During Biden’s tenure as vice president, the White House fostered a transportation policy legacy that was innovative and interesting. If he wants to build on those gains and make them durable, he needs to mind whom Uber and Lyft may be dropping off at the back door of his administration.