Report: How Uber and Lyft prevent cities from protecting drivers and communities

In a mere four years, Uber, Lyft, and other transportation network companies (TNCs) have convinced lawmakers in more than 40 states to overrule and preempt local efforts to regulate the ride-hailing services, resulting in less protection for drivers, consumers, and communities, according to a new report from the National Employment Law Project and the Partnership for Working Families.

The report details how these companies have used “state interference” (also known as preemption), a strategy pioneered by the gun and tobacco industries, to deregulate their industries and redefine their employment relationship with their drivers, who are primarily immigrants and workers of color. 

“Transportation network companies—in particular, Uber—have spent millions of dollars in a blitz to strip cities of their authority to regulate city transportation. In the process, they’ve often stripped workers of labor rights as well,” said Rebecca Smith, senior counsel with the National Employment Law Project and a co-author of the report. 

“The tactics that Uber and Lyft are using are straight out of the playbook of big tobacco, the gun lobby, and ALEC, and when we see corporations influencing legislatures in this way, it’s never good for workers, consumers, or communities,” said Miya Saika Chen, staff attorney at Partnership for Working Families. “Even more troubling, when states preempt the rights of cities to protect workers or residents, they often exacerbate racial inequality.”  

NELP and PWF’s in-depth case studies of four states—Florida, Pennsylvania, Texas, and Washington—reveal TNC tactics that can be characterized as “barge in, buy, bully, and bamboozle.” In short, the TNCs manufacture crises at the local level in order to move state legislators to interfere to solve the “crises.” 

The reports key findings include the following: 

• TNCs have successfully adopted state interference, an antidemocratic legislative practice favored by the gun and tobacco industries and popularized by the ultra-conservative American Legislative Exchange Council (ALEC), in order to rewrite the law in four out of five states. Forty-one states in total have taken away some or all of the ability of localities to set their own standards for the TNC industry.
• State interference on behalf of TNCs harms people of color. As in other cases of state interference, state interventions into local for-hire regulation regularly  involve predominantly white legislatures blocking local programs and policies that benefit people of color, in this case for-hire drivers who are often people of color and immigrants.
• When TNCs succeed in pushing legislation that exempts their drivers from state labor laws, such as unemployment insurance, workers’ compensation, and minimum wage, drivers no longer have access to redress or benefits afforded to other workers in the state.
• TNCs present new barriers to transportation for people with disabilities and are able to make an end-run around access requirement through state interference.
• Deregulating TNCs may hurt the climate and increase traffic congestion by undermining public transit and adding more cars to city streets.  

The report’s recommendations to lawmakers and advocates include the following: 

• State legislators should reject efforts to preempt local authority with respect to TNCs, and instead delegate regulation of TNCs to local transportation authorities, just as many states have done for taxi regulation. Alternatively, they should work closely with cities to develop policies that establish a statewide floor, allowing cities flexibility to customize TNC regulations. They should reverse laws that strip drivers of their rights as employees.
• Local legislators should require TNCs to comply with local labor standards and be alert to any attempts to define drivers’ employment relationship as independent contractors in city legislation and rulemaking; require TNCs to share, with appropriate privacy safeguards, the data that communities need to ensure that TNCs are strengthening rather than undermining mobility and transportation; and learn about and support innovative ways to ensure for-hire drivers can form alternative business models, like cooperatives and nonprofit organizations.
• Advocates and local leaders should stress the uniqueness of local communities and that one size does not fit all; call out (and use litigation to attack) racial injustice when it occurs as part of preemption; and support elected officials who lead on local policymaking rights and equity in the industry.

Read the full report here: Uber State Interference: How Transportation Network Companies Buy, Bully, and Bamboozle Their Way To Deregulation