By Eric Newcomer(Bloomberg) — Uber Technologies Inc. just won its biggest political battle yet, successfully pressuring the mayor of New York to back down in his fight against the ride-hailing company.
Along the way, however, Uber took political jabs that could harm its reputation in the long run. Mayor Bill de Blasio lost this round, but staked out the liberal case against the service: Uber hurts workers, ignores the handicapped, clogs the streets and gouges riders with unfair pricing. He compared Uber to the likes of Exxon Mobil Corp. and Wal-Mart Stores Inc., essentially placing Uber on the wrong side of America’s reckoning with wealth inequality, an issue already roiling the 2016 presidential race.
“Because Uber is a brash, hot, growing company, they can often be a focal point for a polarized discussion,” said Arun Sundararajan, a professor at New York University’s Stern School of Business. “It’s easy to be pro- or anti-Uber.”
The de Blasio administration planned to restrict the growth of ride-hailing fleets with 500 or more cars to 1 percent while city officials conducted a study on traffic congestion. De Blasio abandoned the cap, but the city will still study how Uber and other for-hire car services affect traffic and the environment. Moreover, officials didn’t rule out imposing a cap in the future.
The battle between Uber and the de Blasio administration has been rancorous and very public. As the two sides sparred, Uber found itself caught in the inequality debate. Answering de Blasio’s contention that the more Uber vehicles on the streets, the less opportunity for their drivers to make a decent living, the San Francisco-based company released a 30-second video spot arguing that it was bringing safe transportation to underserved neighborhoods.
Uber’s Stance
“While taxis often refuse people in minority neighborhoods, Uber is there taking more people to and from communities outside Manhattan than anyone,” the video said.
Many of Uber’s riders are urban liberals and the company has no desire to be seen as a force for inequality. If taxi cabs are positioned as the fair-trade coffee of the transportation world, that would hurt Uber with its left-leaning riders.
Moreover, the more Uber is associated with big business and capitalism, rather than a wave of pro-worker populism, the harder it will be for the ride-sharing company to win over local governments in the U.S. and abroad.
The so-called sharing economy — of which Uber is a poster child — has become part of the national conversation on income inequality. Companies like Uber are facing legal challenges, questioning whether they fairly compensate drivers.
Driver Lawsuits
Uber says its workers are independent contractors and therefore not entitled to Social Security benefits and other employee protections. Some drivers disagree and are suing Uber, Lyft and other services to get the courts to label them employees.
Republican presidential candidate Jeb Bush has already begun to position himself as a friend, taking an Uber to meetings in San Francisco and praising the service for helping a driver afford medical school debt-free. Democrat Hillary Clinton, meanwhile, has said that Uber raises “hard questions,” remarks that have received a chilly reception among the technology crowd.
De Blasio is “trying to position himself as the nation’s most left-leaning leader,” David Plouffe, a board member and strategist for the San Francisco-based startup and a former adviser to President Barack Obama, said before the mayor abandoned the cap.
In a New York Daily News opinion piece at the height of the fray, De Blasio wrote: “No company’s multi-billion-dollar political war chest gives it a blank check to skirt vital protections and oversight for New Yorkers.”
This may not be the last Uber has heard from the mayor.
