Uber’s EU lobbying efforts could step up a gear in 2021

Proposition 22’s victory in California in November highlighted the extent gig economy companies will go to ensure labour laws are rigged in their favour. With Uber spending $57 million (out of $203 million spent by the ‘Yes’ campaign in total), it’s hard not to disagree with the notion that the company would be better described as a lobbying vessel than a taxi-hailing mobile app. With some help from others in the space, the company essentially bought itself a law.

It’s still unclear what Proposition 22 will mean for the rest of the U.S. It has been noted that the incoming Biden administration has taken aim at exploitative labour practices, pledging to stop “employers intentionally misclassifying their employees as independent contractors, but the passage of the law will undoubtedly embolden the likes of Uber. “You’ll see us more loudly advocate for new laws like Prop 22,” CEO Dara Khosrowshahi said in an earnings call just a couple of days after the vote.

However, while this focus on U.S. lobbying efforts is to be expected, it has overshadowed coverage of the company’s activities in the EU. So, although a small fine levied against a ride hailing app in Bucharest by the European Court of Justice could well signal a cosy future for Uber and its cadre, because of the distinctly regional nature of the story, it hasn’t been widely picked up.

This all boils down to the fact that the EU is a more fragmented region from both a regulatory and media standpoint than even the U.S. Any attempt to form a narrative – essential for political decision-making and policy change – becomes very difficult.

While this isn’t good news for those trying to hold the company accountable, it isn’t particularly helpful to Uber either or. Kenneth Haar, of Corporate Europe Observatory (CEO), a research organization that takes aim at corporate lobbying across the continent, explained over email that “having to operate in many countries, each with its specific traditions and rulebooks on the side of the EU rules” is a challenge for the company. However, it’s one that it has been trying to tackle through a sustained and multifaceted lobbying strategy.

To help legislators and others form a broader view on the gig economy’s lobbying efforts, in September 2019 CEO published a detailed report on how the sector has been lobbying lawmakers. It highlights the extent to which the company has aimed to build relationships across EU institutions and gain influence via a number of different types of organizations.

How the e-Commerce Directive and the Services Directive help gig economy companies

However, vefore looking into detail at Uber’s EU lobbying tactics, it’s important to note that there are two important laws that establish a solid foundation for gig economy companies. The first is the e-Commerce Directive which “makes it difficult to impose rules on the platforms due to the so-called ‘country-of-origin principle’” (this is due to the internal markets clause which “ensures that providers of online services are subject to the law of the Member State in which they are established and not the law of the Member States where the service is accessible.”).

The second, meanwhile, is the Services Directive. This is a piece of legislation aimed at making the EU market a level playing field for all businesses (ie. it requires specific requirements that only serve the interests of a particular nation to be abolished). For gig ecpnomuy companies, it allows them to challenge the imposition of certain restrictions on their services (an approach tried by a number of national and regional legislators).

How Uber has lobbied EU lawmakers over the last decade

For Uber specifically, the institutions of the EU have been relatively welcoming to the company for a number of years. As Haar says, the company “was met with an open door when the company first arrived in Brussels to figure out how to engage with the EU institutions.” This is borne out by numbers: between December 2014 and September 2018, Uber met with EU officials 51 times (that’s according to the EU’s own Transparency Register).

The CEO report highlights a range of different ways in which Uber has been able to lobby in a number of different areas of the EU, but Haar also provides some further detail to the company’s initial appearance on the scene:

“The arrival of Uber some five years ago coincided with some deep strategising in the EU institutions about platforms. A so-called ‘Digital Single Market’ was to be constructed to provide as much space as possible for companies like Uber, Airbnb and others to support innovation.”

This ensured “there was a good basis for the two sides to ‘click’ immediately.”

A revolving door network

When Haar says ‘click’ he doesn’t mean it in some metaphorical sense. On many occasions strong personal relationships have allowed Uber to gain (at the very least) an insight into the procedures and mindset of a number of EU institutions. For example, Dutch politician Neelie Kroess, who served as a commissioner for a number of areas within the EU, became a member of Uber’s Public Policy Advisory Board in 2016 (the report notes that it is believed she received shares as payment). Elsewhere within the EU, Laurin Sepoetro, who worked for MEPs on transport and the environmental policy, is now Uber’s Senior Associate on EU Public Policy.

A few moves from the EU tpo Uber might seem minor. But against a backdrop of meetings between senior management and senior Brussels officials, this sets the scene for an environment in which a multi-pronged lobbying approach can be done relatively effectively.

Membership of lobbying groups and think tanks

Lobbying is not a solitary venture. It is a group activity. Typically sectors and industries work together to ensure that their legislative ‘needs’ are met. Moreover, it’s also important for companies to work across many different lobbying organizations. “Getting the message out from as many mouthpieces as possible is an important lobbying strategy” the CEO report explains.

Uber’s membership of some groups, such as AmCham EU (which represents the American Chamber iof Commerce in the EU), and the European Internet Forum (EIF) might not be that surprising. However, its membership of organizations such as the Mobility as a Service Alliance and the International Association of Public Transport, suggests it sees itself as a key player in public/private solutions.

Furthermore, Uber is also a member of a number of free market think tanks. These are, according to CEO, “a very effective way to influence the policy milieu in Brussels.” These include the Lisbon Council for Economic Competitiveness and Social Renewal, and Bruegel, a think tank with a range of corporate members.

Ubernomics and evidence-based policy

One of the most interesting aspects of Uber’s lobbying efforts is its own research. This is, CEO explains, sometimes done in conjunction with well-established academic institutions (such as Princeton and Oxford).

This research aims to establish an evidence base that aligns with the company’s interests. The report highlights, for example, how “Uber’s Chief Economist, Jonathan Hall co-authored a paper with Princeton economist Alan Krueger.” Unsurprisingly, “the paper found that most Uber drivers liked setting their own schedules, and made good wages.” [The paper is cited in the report, but the link now appears to be dead.]

While this sort of activity can play a part in wider public perceptions of Uber, from a policy standpoint it also allows the company to take advantage of the EU’s emphasis on ‘evidence based policy.’ While in theory this approach might sound well intentioned, in its drive to remove any trace of ideology from policy making, the vacuum that’s left can be easily exploited by well-engineered research from companies like Uber.

[Read more stories about tech policy and its impact on the industry and society.]

EU regulation vs. national and regional regulation

Uber’s biggest challenges in Europe have come from national and regional authorities. In the middle part of the last decade, its first forays into the continent were met with bans in countries such as France, Germany and Spain. It has also seen serious challenges in Barcelona and London. Although Uber has seen success recently, it’s likely that legal wrangling will continue in the future.

This is one of the main reasons that the company is so keen to forge a good relationship with EU institutions. “It doesn’t mean national and regional governments are inherently stricter. but often they are.” Haar says.

Part of the reason for this is that, as you go closer to ground level, politics gets messier. It’s not so much that things are more complicated, but people’s voices are louder and more keenly felt. Competing interests need to be managed directly – post-ideological technocratic approaches just don’t work.

Haar explains:

“At the core of the EU we find the Single Market, that’s where the EU institutions can trump national legislation at any time. So if you can get the EU institutions to adopt a particular interpretation of what goes against the freedom to provide services, you have a trump card against national legislation, in most cases. For a company like Uber, then, it makes a lot of sense to find a lobbying strategy to deal with the European Commission. If you get them on their side, you can use it on the ground across Europe – in courts or with governments.”

This means it makes much more sense for Uber to target EU lawmakers rather than those in national and regional jurisdictions. From a PR perspective too, working with the EU rather than local authorities takes the focus away from the quotidian nature of Uber’s impact. It turns the discussion about labour laws into something more bureaucratic (ie. distinctly uninteresting) in the minds of EU citizens.

This is a good lesson for anyone trying to challenge and resist Uber. Focusing on local action is the way forward as it is where the company is weakest. It also makes conflict and tension more visible and more material.

The future of Uber’s lobbying in Europe

So, what do the last few years of Uber lobbying in Europe tell us about the future? Haar notes that at the moment it feels like a bit of a game of cat and mouse, and it’s hard to say for sure who is coming out on top as Uber is continuing to court the EU while it fights court battles across the continent.

“The big prize, having its drivers recognised as mere contractors and not workers, is proving difficult, with recent judgments in both the UK and France against the company this year. On the other hand, Uber seems to be gaining ground in other areas,” Haar says.

However, Haar suggests that “the situation may be about to change.” This is because of the Digital Services Act, a legislation package that was only very recently announced officially. This is an attempt to update the e-Commerce Directive, bringing legislation in line with the needs of businesses and consumers today.

This might sound like good news, but at the moment it’s not entirely clear what the laws included in the act will look like and who they will benefit. Haar says that “it is difficult to predict” how things will unfold. “I think the first draft is likely to provide some concessions to Uber, but it will have to pass through several elected bodies before it is adopted, so in the end it could be that rules are strengthened.”

From a UK perspective you might think this uncertainty will be compounded by Brexit. However, Haar says he believes little will change. If anything, the fact that regulatory powers will return to London will actually be an “opportunity” for Uber – “at least as long as they have a conservative government,” he adds.

What is certain is that Uber will continue its lobbying efforts in 2021. “Uber will be engaged in a lobbying campaign, one way or the other,” Haar says, “a campaign that could pretty much determine its conditions in the European Union for years to come.” That means it’s essential to pay attention, whoever and wherever you are.