The complicated politics of Uber

Updated

In recent months, the Republican Party has sought to capitalize on the mounting political battles between local governments and car-for-hire services like Uber and Lyft. Several conservatives have pointed to the free-market, sharing-economy approach to trumpet the party’s lower-regulation, starve-the-government message, and as a way to woo younger, tech-savvy voters. 

All In with Chris Hayes, 11/18/14, 9:26 PM ET

A look at the dark side of Uber

The car service company is revolutionizing how the world travels - but its sharp elbows aren’t reserved for the taxi industry alone. Chris Hayes explains.
But the politics aren’t as simple as all that.

On its face, Uber is a free-market conservative’s dream: A start-up business making smart use of technology and terrific customer service to out-compete a lumbering taxi establishment giant grown bloated by union influence. But as many Democrats have pointed out, the very purpose of government is to regulate businesses like Uber in order to safeguard citizens.

Earlier this fall, the Republican National Committee began a petition in support of Uber. In the petition, which just over 11,000 people have signed, the RNC criticizes “taxi unions and liberal government bureaucrats” who are “setting up road blacks, issuing strangling regulations and implementing unnecessary red tape to block Uber from doing business in their cities.” Sen. Marco Rubio of Florida – a potential 2016 GOP presidential candidate – has also made similar remarks. And tax reform activist Grover Norquist has gone as far as to insist companies like Uber can help the GOP take over cities that have been controlled by Democrats due to the left’s “refusal to embrace the innovative technology and disruptive businesses that have greatly improved city life.”

Related: Why the GOP can’t get enough of Uber

The traditional thinking pits Democratic constituencies like organized labor against companies like Uber, with free-market conservatives on the side of these sexy start-ups. But a closer look reveals that the politics of tech disruption are far from clear cut – and certainly don’t fit neatly into “Republican” or Democratic” boxes. 

“I don’t think there are any clear partisan lines yet,” said Andrew Moylan, executive director and senior fellow at the R Street Institute, a libertarian-leaning think tank based in Washington, D.C. “The reality has not yet caught up to the [Republican] rhetoric nationally.” The group recently released a report card grading cities on varying measurements of friendliness for transportation apps like Uber and Lyft. There were no obvious partisan lines. Interestingly, several liberal cities like Austin, San Francisco and Washington, D.C. established sensible regulatory climates and fared well, according to R Street. More conservative cities like Houston, San Antonio and Orlando fared poorly, and have embraced what Moylan describes as onerous regulations that hinder residents there from using the popular car-for-hire service.

Arun Sundararajan, a professor at New York University’s Stern School of Business who studies the so-called sharing economy, agrees that the politics are not clear-cut. “Given the fact that this is the very early stage, I don’t think the issues have permeated sufficiently into the knowledge place of local lawmakers for them to have strong positions along party lines,” he said.

Uber spokesman, Lane Kasselman told msnbc on Thursday, “When it comes to a safe and hassle-free ride, there are no sides of the aisle. More than a dozen cities and states – both red and blue – have recognized the value of Uber and passed permanent ridesharing regulations, and we appreciate the bipartisan support.“ 

There are plenty of examples underscoring that point. Take, for example, ultra-conservative Gov. Jan Brewer of Arizona, who earlier this year vetoed a bill that would have benefited companies like Lyft and Uber. Then there’s Democratic Illinois Gov. Pat Quinn, who recently vetoed a bill targeting such on-demand taxi companies with strict state-wide regulations – including mandatory commercial insurance and chauffeur licenses for drivers.

Uber’s recent hiring of Obama’s former top strategist – David Plouffe – throws a wrench into the conventional wisdom, too.

“I don’t think there are any clear partisan lines yet. The reality has not yet caught up to the [Republican] rhetoric nationally.”
Andrew Moylan, R Street Institute
Moylan did say, however, that the legal fights have unearthed a division in the broader liberal coalition. “There’s the union-centric, labor-oriented side of that movement, which has done a lot to impose new regulatory climates and try to protect entrenched industries. On the other side, you have a younger, more tech-savvy part of the liberal movement not tied to union politics and more open to these technologies. Republicans have been trying to highlight that.”

Cab drivers and their unions argue that tech-driven competitors like Uber and Lyft aren’t playing fair because the companies are not subject to the same fees and inspections. And some lawmakers take issue with the companies’ processes for vetting drivers, in addition to their practice of surging prices during peak hours, bad weather or major events. Car-for-hire companies have claimed they do properly vet drivers and have taken action – like suspending bad drivers – if warranted. They also have argued their drivers benefit by not having to pay “ridiculous fees” and “actually get to learn a living wage.” 

Uber, which launched in 2010, is now valued at a jaw-dropping $40 billion (by comparison, Twitter is worth $24 billion), and has faced a number of legal challenges and public relations nightmares this month alone. Its services are available in 45 countries and more than 200 cities around the globe. 

The liberal city of Portland sued Uber this week to stop the service from operating until it follows local regulations. Prosecutors in San Francisco and Los Angeles announced they reached a settlement with Lyft for “making false and misleading statements” to consumers about vetting drivers, and filed a similar suit against Uber. India this week instituted a ban on Uber following the alleged rape of a female passenger by one of its drivers. A judge in Spain ordered Uber to stop operating in the country after a series of protests by taxi groups. Similarly, officials in Thailand ordered Uber to cease operations after finding drivers who were not registered or insured to drive commercial cars.

So if the legal fiascos aren’t a result of ideological trends, what’s steering them?

“My gut tells me that some level of consumer demand is the key,” said Moylan. “When you have cities like Washington, D.C. or Austin, where there’s lot of peoples and needs, you can’t afford to get it wrong,” he said, adding that bigger cities tend to be more supportive of such services. 

It certainly doesn’t look like companies like Uber or Lyft – not to mention online accommodation sharing websites like Airbnb – are going away anytime soon. That means these upstart tech companies could emerge as part of the national conversation going into the 2016 presidential elections as it relates to jobs and the economy.

“Increasingly, platforms like these are going to be the source of creating new work,” which could create tension between states or cities with tougher or looser regulations, Sundararajan said. “It will be a conversation of ‘do we want to constrain the platforms in the interest of consumer protection or do we want them to let them flourish in the interest of work creation?’”

Technology

The complicated politics of Uber

Updated