Transportation

Uber’s drive to be a DC powerhouse

Photo Illustration/Garrett Evans

In the beginning, Uber went from street fight to street fight as it sought to win acceptance around the globe.

Now the ride-hailing company is firmly in the driver’s seat, steering political and policy battles as lawmakers and regulators turn their eyes toward the growing sharing economy.

{mosads}“There was an evolution” at the federal level, said Justin Kintz, head of public policy and communications for Uber. “After most of the U.S. had enacted [transportation network company] regulations, the question is no longer should Uber be in our city or not. It has become about showing why Uber is good for communities around the nation.” 

In just a few years, Uber has transformed from a scrappy startup to a Washington powerhouse — a path traveled by many tech companies, but one that was largely unexpected for the nascent ride-hailing industry.

Uber’s first products centered entirely on the black cars that are traditionally operated by livery companies, a market that’s tightly regulated in many cities and counties. 

The company says it ran into two issues: caps on the number of livery drivers in a given jurisdiction and limits on what they could charge for a ride. The former would make it hard for Uber to expand in a competitive market, while the latter impeded the deployment of Uber’s surge-pricing model. 

But in some places the company decided to just start operating and then deal with regulators later. NextCity reported that Uber’s first cease-and-desist letter came in 2013 from a governmental authority months after the service launched.

Over time, the company began to see the benefits of working with regulators. In March 2013, after almost three years of having cars on the road, the company hired Corey Owens — a former Facebook staffer — to be its head of public policy around the world. 

A month later, the company released a special report to provide its vision for how the growing market of ride-hailing vehicles, like those used in the company’s then-year-old UberX offering, should be regulated.

“The incumbent taxi industry, widely reported to be corrupt, anti-competitive, and generally acting against the interests of the public and its struggling drivers, has launched a full frontal campaign to slow and/or shut down Uber,” Travis Kalanick, Uber’s co-founder and CEO, said in the report. “Despite these challenges, we continue to operate in cities across the U.S. because our technology respects existing regulation and promotes legal transportation services.”

At the time, Uber was running something of a fire brigade. Policy staffers would drop into a locality to work with city councils and regulators to pass laws and rules favorable to Uber or to fight back against offensives from established players in the market.

“We needed people who were real practitioners and could hop on a plane at a moment’s notice, without a change of clothes, and fly to Bogotá and figure out how to deal with the Colombian taxi companies that were burning tires in the streets to protest Uber,” Kintz said during a sit-down interview at the company’s D.C. offices. 

Kalanick told attendees at a 2014 conference, “We’re in a political campaign, and the candidate is Uber and the opponent is an a–hole named Taxi.”

“Nobody likes him. He’s not a nice character, but he’s so woven into the political machinery and fabric that a lot of people owe him favors,” he added. 

Yet there was a problem. The company lacked the message and the organization needed to fight a battle that was becoming national in scope. So it looked to the world of politics to fill the gap.

“We knew we needed someone … who could help us break out of the cycle of dealing just with the issues of the day,” Kintz said. “We needed somebody that had a ton of experience with big-picture strategy.”

Ultimately, after an interview process that reportedly included former White House press secretary Jay Carney and Howard Wolfson, a former top aide to Hillary Clinton, the company hired David Plouffe, the soft-spoken campaign manager who propelled former President Obama to victory in 2008. In announcing the hire, Kalanick was clear about the company’s ambitions, titling his blog post “Uber the Candidate.” 

It was under Plouffe that the company started to work on a unified message and increase its engagement in Washington.

Early in 2015, the company started to face more criticism over the way it treated its drivers. The company, like many of its peers, considers them independent contractors, who don’t get the same benefits and protections afforded to full-time employees.

Sen. Elizabeth Warren (D-Mass.) said the rise of contracted work was a “real problem.” Clinton, then a Democratic presidential candidate, raised similar concerns. It was Sen. Mark Warner (D-Va.), however, who most explicitly called for reforms to create a safety net for employees while not crippling the companies.

By December 2015, Warner had changed his tune: The companies, he said, should try to solve the problem on their own. Uber has since announced a partnership to give some drivers retirement benefits through another startup.

More broadly, by the end of 2015, Plouffe was making the argument that Uber was good for the national economy in a time of rising inequality.

“People are using Uber who are struggling to pay bills, who are looking to earn a little extra spending money or are transitioning between jobs,” Plouffe said during a speech in Washington in November of that year. 

Around the same time, another change was taking place in the company’s policy shop that would presage Uber’s emergence as a lobbying force. In May, the company had moved Plouffe to a senior adviser role and hired Rachel Whetstone, a longtime PR hand in Silicon Valley, to replace him.

By fall, she was making changes. 

The company’s first policy staffer, Owens, left. So did Lane Kasselman, who was a veteran communications operative. It became clear that Whetstone was bringing a new approach to the job, according to a person with knowledge of the matter. 

Whetstone filled the openings with people who worked at, or had worked for, her previous employer, Google. The search giant had similarly made the transition from upstart to corporate power in Washington. In 2015, Google spent more than $16 million on federal lobbying .

Her hires, according to Uber, were designed to bring in people who were interested in taking the policy operation to the next level. That alienated some employees who were used to the more freewheeling operation of the early days.

Uber acknowledged the growing pains but said they are a natural part of the process. 

“The evolution of our team mirrored the evolution of the company,” Kintz said. “We needed to add people that knew how to run a large organization and put in place structures and systems that benefit a company of over 10,000.” 

Among the new hires is Niki Christoff, a former Republican campaign operative who had held high-level positions at Google. Under her watch, Uber has rapidly ramped up its work in Washington. The firm spent $1.36 million on federal lobbying last year, nearly triple what it spent in 2015.

Uber’s expanding lobbying operation still pales in comparison to other tech giants. But it has allowed the company to shape the conversation in Washington and develop allies on Capitol Hill.

“This first term of the caucus was really a listening and learning exercise,” Rep. Eric Swalwell (D-Calif.), co-chairman of the fairly new Sharing Economy Caucus, told The Hill. “We brought in the stakeholders to hear what they see as a challenge and where they see themselves going forward.”

Uber’s lobbying efforts have so far focused on smaller measures and modernizing existing laws. The company’s most recent federal victory was working directly with lawmakers to get language attached to a national defense authorization bill aimed at allowing Uber and other ride-hailing services access to military bases.

“Going forward, we may introduce our own legislation,” Christoff said in a telephone interview. “Uber is still very new. We are learning to walk before we run.” 

But the relationships and educational outreach may pay off when Uber bumps into new issues, especially as it expands its business model into emerging areas like autonomous vehicles and “flying” cars.

“You’re looking at a disruptive force,” said Rep. Darrell Issa (R-Calif.), who also chairs the Sharing Economy Caucus.

Uber’s lobbying push comes at a time when federal regulators are wrestling with how to oversee self-driving cars and the safety issues they create. Auto and tech industries pleaded for a more flexible approach, and the Obama administration ended up unveiling a set of voluntary safety guidelines last summer. 

Uber, which formally weighed in on the guidelines, acquired a self-driving trucking startup called Otto and began testing semi-autonomous cars in Pittsburgh last year. It had to end a similar experiment in San Francisco, however, because the company lacked the necessary state permit required for autonomous driving — harking back to its early strategy.

The rapid evolution has led Uber to lobby a wide variety of federal agencies such as the National Highway Traffic Safety Administration, the Department of Veterans Affairs and the Federal Transit Administration. 

Uber also plans to renew work on legislation to ensure federal employees can take advantage of ride-hailing services such as Uber and Lyft when they travel on official government business. The bill was approved by the House earlier this month and now awaits Senate action.

Although winning local battles will still be essential to Uber’s survival, it has its sights on the broader war.

“Our focus in the early days was getting common-sense ride-sharing legislation passed, state by state,” Christoff said. “Now, it’s about telling a comprehensive narrative about where the company is going next.”

Tags Elizabeth Warren Hillary Clinton Mark Warner

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