The companies say that “20th century” rules need to be updated for their new ways of doing business.
(TNS) -- As Uber, Lyft and Airbnb battle regulators worldwide, they can summon a powerful weapon: battalions of loyal users — drivers, passengers, hosts and guests — who swarm lawmakers with e-mails, petitions, rallies, testimony and tweets supporting the companies.
The three exemplify a new generation of technology that upends traditional businesses like taxis and hotels. Uber and Lyft arrange paid rides in people’s cars, while Airbnb arranges vacation rentals in people’s homes. They generate controversy as they skirt laws regarding insurance, safety and taxes. But the companies say that “20th century” rules need to be updated for their new ways of doing business.
And they’ve had remarkable success in mobilizing customers to lobby for them.
“These companies are disruptive in their lobbying strategies,” as well as their business models, said Edward Walker, associate professor and vice chairman of the UCLA sociology department.
Their efforts are two-pronged, he said. Armed with buckets of venture capital, they hire lobbyists and make political donations like other firms. But that traditional approach is complemented by harnessing “salt of the earth, everyday folks” to speak on their behalf.
“They do a significant amount of mass mobilization of the public,” Walker said. “If you can get people organized in a really systematic way, you can have a substantial impact.”
Indeed, both Uber and Airbnb credit their users with swaying lawmakers.
Over the past year, 21 municipalities passed regulations creating frameworks for Uber and other ride-hailing services to operate, said David Plouffe, Uber senior vice president for policy and strategy.
“The most important element of that was our riders and drivers,” said Plouffe. “Elected officials see how strongly people feel about it; how widespread and diverse and intense that sentiment is.”
Similarly, David Hantman, Airbnb head of global public policy, said that its users’ contact with lawmakers is “incredibly crucial.”
“When a company talks about its desires and needs, that can get you only so far,” he said. “But when citizens, voters, residents, taxpayers come in and say, 'This is how I pay my bills,’ that has the most impact.”
But critics are worried to see all that political capital spent on corporate agendas.
“There are so many huge social issues that people could be involved in that I’m aghast that this is where individual energies are being directed,” said Veena Dubal, a postdoctoral fellow at Stanford who studies the ride-hailing companies. “They’re not out to save the world by any stretch of the imagination, and yet that’s how supporters view them.”
The companies, which fall under the rubric of what has been called the sharing economy, portray themselves as social movements, transforming the lives of drivers and hosts with flexible income opportunities, and liberating riders and guests from old-school alternatives.
“These companies are already based on participation, they frame themselves as about people helping people out,” Walker said. “It feels more friendly and not like hard-knuckle lobbying; it doesn’t feel as awkward (to users) as if Walmart asked them to write a letter.”
As startups, they also trade on their status as newcomers — casting themselves as Davids battling Goliaths, despite their hundreds of millions of dollars in backing, Walker said.
Airbnb’s prime example of successful user lobbying is San Francisco’s new law legalizing short-term rentals in people’s homes, dubbed the Airbnb law, which the Board of Supervisors passed last fall.
Each public hearing on the law featured scores of Airbnb hosts who testified in remarkably similar language that they were “home sharers” who made ends meet by renting to visitors. Hosts staged rallies outside City Hall and banded together in a support group called Fair to Share. Behind the scenes, hosts met privately with lawmakers, although their earnestness sometimes backfired. Their communications were “almost cult-like,” Supervisor Eric Mar said.
Airbnb encouraged and supported those efforts, providing catered food, sound equipment and signs, as well as PR representatives at the rallies, for instance. But Hantman said its main involvement was educational. “It’s not easy for a regular person to know, here’s how I contact my congressman, local representative or mayor,” he said. “We just help a little bit with that so they can have their voice heard.”
Compared with many businesses, all three companies have big advantages in communicating with supporters. They know their users’ e-mail addresses and cell phone numbers. They can alert users via their apps. Their drivers and hosts have an economic self-interest in supporting them — although it’s noteworthy that even riders and guests, who lack that incentive, will lobby for them. And a new generation of digital tools facilitates communication.
Jeb Ory, co-founder and CEO of Phone2Action, said Lyft is among companies that use his startup’s “digital advocacy” tools to mobilize users.
Lyft used Phone2Action to create campaigns tailored to specific cities or states, he said. For instance, in California, it and Uber lobbied aggressively over the summer against two bills seeking to toughen requirements on ride services for insurance, background checks and drug and alcohol testing.
The tools let Lyft send e-mail blasts to supporters and embed messages on the service’s first page, asking people to contact their elected officials by e-mail or phone. The California campaign saw a high response rate, with 28 percent of people who received e-mails taking some action, such as sending an e-mail, he said. Typical advocacy e-mails get only 2 percent of users to take some kind of action.
Dozens of drivers, many waving Lyft’s signature pink mustaches or wearing Uber’s black T-shirts, rallied at the state Capitol against the proposed regulations, carrying signs claiming that they would squelch innovation.
Caifornia legislators were inundated with e-mails about the measures. In the end, the bill on background checks and drug testing failed to pass, while the insurance bill was softened until Uber and Lyft agreed to its terms.
Another factor at work is that many of the companies’ users are young, wired and skeptical of government intervention, said Bruce Cain, a Stanford professor of political science and director of the Bill Lane Center for the American West.
“There is in this generation a strong undercurrent of Internet libertarianism that thinks if we can just free the market forces from regulation and old structures, we can have a more creative, cheaper world,” he wrote in an e-mail. “This generation resists the paternalistic mommy/daddy state that over-protects them and stifles their individuality and creativity.”
Plouffe compared Uber users’ fervor to the grassroots enthusiasm he witnessed as campaign manager for Barack Obama’s 2008 presidential bid.
In fact, their zeal motivated him to join Uber, he said. “I’m not sure if there’s anything else like this in the private sector where you have people that passionate who are willing to get engaged,” he said. “It’s a unique asset and cannot be manufactured.”
Walker, whose recent book, “Grassroots for Hire: Public Affairs Consultants in American Democracy,” examines “Astroturfing” — corporate campaigns that simulate the appearance of grassroots advocacy — agrees that the sharing-economy campaigns are genuine, not Astroturfed.
But it’s up in the air as to whether the effects are beneficial or not, he said.
Dubal is certain that they are not.
“This is a consumer movement that’s in opposition to consumer interests,” she said. “People are lighting a fire under government agencies to give these companies carte blanche and essentially deregulate them. They’re putting their trust in the companies and not thinking about long-term impacts or the traditional role of the consumers rights’ movement to hold companies to certain standards.”
©2015 the San Francisco Chronicle