Uber shareholders to vote on lobbying disclosure proposal – TechCrunch

Uber shareholders will vote Monday on a proposal that, if approved, will require the company to fully disclose its “direct and indirect lobbying activities and expenditures.”

Proponents of the proposal argue that this information is key to understanding the sustainability of Uber’s business model.

“How much do you have to push to develop your markets or defend your markets? Because it depends on the resilience of how you make money,” Michael Pryce-Jones, senior government analyst at the International Brotherhood of Teamsters, the union that drafted the proposal, told TechCrunch.

Last year, the Teamsters submitted the same proposal for the first time. It failed, with only 30% of shareholders voting in favor. The group pledged to continue to pressure Uber and other companies (the The Teamsters have made a similar proposal with Lyft) in order to gain more ground in the future.

Like other app-based companies, Uber’s business model relies on the workforce of on-demand workers and its own regulatory arbitrage that allows it to circumvent some traditional employer responsibilities, including benefits and protections such as minimum wage.

In 2020, companies like Uber, Lyft, and DoorDash collectively spent more than $200 million to switch Proposal 22 in California, legislation that would keep workers defined as independent contractors rather than employees. According to Uber’s 2021 U.S. Political Engagement Report, the company alone spent nearly $30 million on Prop 22.

Uber CEO Dara Khosrowshahi said Many times that Uber would continue to plead loudly for similar laws in other states. The company currently does in massachusettswhere in 2021, he contributed over $100,000 to a Prop 22 ballot initiative presented by the MA Coalition for Independent Work, a cohort of app-based ridesharing and on-demand delivery companies.

Uber has also financially supported similar coalitions in Colorado, Illinois, New Jersey, New York and Washington, with varying degrees of success, according to the report.

Despite these revelations, the Teamsters are demanding more transparency.

“I know what you are disclosing. The biggest concern I have is what you don’t disclose,” Pryce-Jones said, noting that Uber’s lack of disclosure poses a reputational risk, especially in today’s cancellation culture. it’s easy to find yourself on the wrong side of a socially serious problem. . “The question is, why aren’t you disclosing this? We know they are breaking new ground by creating supposed coalition groups of independent workers, which they disclose they fund, but we don’t know how many, so this is a critical hole in their current disclosures.

Uber’s political engagement report reveals the amounts paid out for some of the self-employment coalitions, but surprisingly not for others. There is also a lack of disclosure of the sums of money given to potentially undisclosed core activities, according to the shareholder proposal.

The frustrating thing is that a company will justify to you everything they disclose, but then they’ll come up with a reason why the extra amount can’t be disclosed, and they don’t provide good justifications for that given that she provided the other disclosures,” Pryce-Jones said. “It only suspects that there is something to hide.”

Many companies get away with undisclosed lobbying by contribute to 501(c)(4) organizations, which the IRS classifies as a social welfare organization, but which shady corporations rely on to engage in electoral politics while keeping their sources of funding secret. One reason for this is astroturfing, or creating a false appearance of grassroots activism, as Uber and its cohort have been accused of doing through various freelance groups.

Uber’s board recommends voting against this year’s proposal, saying such disclosure is unnecessary given the company’s “existing risk management practices” and the fact that it already has transparency regarding some lobbying activities, but certainly not all.

In its statement of opposition, Uber says it made transparent the company’s political contributions and independent spending, as well as a list of 501(c)(6) trade association memberships.

“We also publicly disclose state and local lobbying costs and activities when required by law,” the statement reads, perhaps unintentionally highlighting the fact that there is no consistency in reporting. state-to-state reporting of lobbying activities, which allows Uber to circumvent comprehensive nationwide lobbying activities. disclosure to its shareholders. “Uber reported $2,060,000 in lobbying expenditures at the U.S. federal level and approximately $3,933,353 at the state and local levels in calendar year 2021. This level of transparency and detail is cutting edge industry benchmark against each of our U.S. peers in ridesharing and delivery.”

While it’s true to say that Uber is truly “industry-leading” compared to its peers, which are other app-based gig companies, it may also be true to say that the bar for leading the industry is somewhere near the floor. After all, Uber and Lyft have both been accused of removing a page from the tobacco industry lobbying handbook spending millions challenging independent research that criticizes corporations, paying for their own self-serving studies, manipulating the media, creating fake grassroots movements and more.

Yet Uber is arguing, essentially, that it knows what it’s doing and that its shareholders should trust management to make them money, despite the fact that the the company’s unrestricted cash has fallen sharply since its peak in mid-2019.

“Strong governance and risk management systems are essential elements of Uber’s political and lobbying activities,” reads Uber’s opposition statement, which then lists various corporate checks and balances. that exist within the organization “to ensure consistency and ensure that our contributions comply with Uber’s policies and procedures, as well as applicable laws and regulations and corresponding legal reporting requirements.”

The company also claims to have developed lobbying principles, “which focus on compliance, honesty, integrity, professionalism and diligence”, which must be adhered to by consultants who lobby on behalf of Uber.

While Teamster’s proposal is unlikely to pass on Monday, given the board’s recommendation to vote against it, it could move the needle toward more transparency in the future.

“Disclose at least the overall bucket,” Pryce-Jones said. “Not necessarily how much goes to an individual organization, but just give us an idea of ​​the quantum, how much. Because we literally don’t know if we are seeing the tip of the iceberg or if we are seeing the whole thing. »


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