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At the same time, local managers were given millions in “incentives” to kickstart demand. Everyone had a smartphone, everyone was fed up with their local metro and taxi services, and everyone loved the free rides.
Uber made it as easy as possible for drivers to sign up. The company used a background check system that moved new recruits through the system quickly. Taxi and livery services used fingerprint testing, which offers a thorough history of a driver’s past, but often took weeks to complete. Uber used an outside firm, Hirease, which boasted an average turnaround time of “less than 36 hours.” Hirease did not require fingerprint tests.
Waiting weeks for a background check was intolerable for Uber. A week was a year; a month was eternity. After perfecting the quick background check process, Uber’s political machine went to work. In states where fingerprint-based background checks were legally required, Uber hired lobbyists to get laws rewritten that mandated drivers undergo the traditional checks.
Uber spared no expense on local lobbying campaigns. The company regularly topped the list of biggest spenders across states like New York, Texas, and Colorado—and dozens of others where they faced legislative opposition—throwing down tens of millions of dollars annually to sway lawmakers. David Plouffe, a former Obama administration political operative, was a major hire who knew how to influence city-level as well as national politics. In Portland, Uber hired Mark Weiner, one of the most powerful political consultants in the city. In Austin, Uber and Lyft paid $50,000 to the former Democratic mayor to lead their campaign against regulation. Later, as Uber matured, the company’s staff swelled to include nearly four hundred paid lobbyists across forty-four states; the number of ride-hailing lobbyists outnumbered the paid lobbying staffs of Amazon, Microsoft, and Walmart combined.
The money was well spent. Uber was able to sway legislation in many states. As a result, legislators rarely, if ever, raised the issue of Uber’s employment liability for its “driver-partners.” That meant Uber could define Uber drivers as contract workers—designated 1099 in tax code parlance—which allowed Uber to skirt paying for benefits like unemployment tax, insurance, and health care. Avoiding these normal employment expenses saved enormous amounts of money, and wildly decreased Uber’s liability for drivers’ actions.
Lobbying wasn’t always a silver bullet; sometimes Uber had to play hardball. Kalanick would order lieutenants to threaten to withhold service to customers or cease operations entirely if it looked like city legislators weren’t going to cave to Uber’s demands on issues like fingerprint background checks or driver caps.
Uber treated each market less like a negotiation and more like a hostage situation. Kalanick had no problem pulling out of a market entirely—as it did in Austin—especially after they had been operating for a number of months beforehand. The company had leverage: people loved using the service. In nearly every major metropolitan area, the “product-market fit”—a tech industry term to describe how well a given service may do with the public—was near perfect. People hated taxis, and loved ordering a car with their phone. To have such a service taken away roused public anger.
Kalanick saw that weakness and did what he did best: he exploited it. Uber general managers would run entire campaigns harnessing public frustration and telling people to direct their anger to their local lawmakers and elected officials.
In New York in 2015, when Mayor Bill de Blasio threatened to cap the number of cars on the road, Uber tweaked the software inside of its app for New York based riders to show what it called “De Blasio’s Uber.” That option showed fewer animated cars driving around on the mini-map inside the Uber app, with approximate wait times of up to a half hour—five to six times longer than people usually had to wait for a ride. “This is what Uber will look like in NYC if Mayor de Blasio’s Uber Cap Bill passes,” said the text inside a small, pop-up notification. Users were invited to “take action,” and were presented with a button inside the app that emailed the mayor and the city council directly with a form letter prewritten by Uber. By the end of the campaign, the mayor’s office had received thousands of letters