Gig Companies Set Lobbying Records Amid Fight Against Landmark Labor Bill
The intense lobbying, however, was not enough to overcome organized labor's support for AB 5, a new law that makes it harder for gig economy companies to classify their workers as independent contractors.
November 01, 2019 at 12:50 PM
3 minute read
Uber and Lyft spent nearly $675,000 lobbying California lawmakers over the summer as the two ride-hailing companies fought unsuccessfully for a carve-out from landmark labor legislation, new disclosures show.
Lyft paid $446,450 to sway decision-makers in the third quarter, the period when the Legislature took final votes on, and the governor signed, Assembly Bill 5. The legislation codifies much of the California Supreme Court's 2018 ruling in Dynamex Operations West v. Superior Court, making it tougher for gig companies to classify their workers as independent contractors.
Lyft's advocacy spending rose above the San Francisco company's previous record quarterly total by almost 60%. Lyft allocated more money to lobbying in California during the first nine months of 2019 ($866,810) than it did in Washington, D.C., ($700,000) according to data from the Center for Responsive Politics' OpenSecrets.org.
The California lobbying effort reflects the ride-hailing companies' fight to maintain a business model that relies on independent contractors who do not receive overtime, minimum wage guarantees and other benefits that workplace law mandates for employees. The legislation has been lauded by Democratic presidential candidates and eyed with interest by labor leaders and liberal politicians in New York.
Uber and Lyft identified a dozen bills and several state agencies as their lobbying targets; the records, however, don't reveal how much the companies specifically spent on AB 5 itself. But the disclosures suggest a broad focus on the Dynamex legislation. Lyft split its money among four Sacramento lobby shops, a public affairs firm, political consultants and messaging platforms that connected drivers and customers with lawmakers' offices.
The two companies weren't alone in their lobbying efforts on the California worker classification bill. Other gig and technology companies, including DoorDash, Instacart, TaskRabbit, Airbnb, Handy, Postmates and Google, also spent hundreds of thousands of dollars combined lobbying in the third quarter with each one listing AB 5 as a target. Trade groups including the Internet Association and TechNet contributed even more.
The intense lobbying, however, was not enough to overcome organized labor's support for the bill. Gov. Gavin Newsom signed AB 5 into law Sept. 18.
App-based delivery and ride-hailing companies have now turned their attention to a 2020 ballot measure in hopes that voters will give them the AB 5 exemption that lawmakers and Newsom did not. Uber, Lyft, DoorDash and Instacart this week unveiled a proposed initiative that would offer drivers minimum pay, medical care stipends and mileage reimbursements—but not the employee label.
Uber, Lyft and DoorDash have already pledged to spend $90 million on a campaign to get the initiative passed.
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