Teamsters Union Is Trying to Force Uber and Lyft to Disclose Lobbying Efforts

The International Brotherhood of Teamsters is using its Capital Strategies Department—an advisor to the Teamsters and its affiliated benefit funds with over $100 billion in investments across capital markets—to introduce shareholder proposals at Uber and Lyft calling for full disclosure of direct and indirect lobbying activities and expenditures.

Over the past year, the ride-hailing companies have not only spear-headed a $203 million campaign to pass Prop 22 and keep their workers misclassified in California, but have also laid the groundwork for similar campaigns across Illinois and New York. All this comes during a record-breaking year for lobbying at Uber and Lyft, including $2 million to California’s GOP, hiring sprees of lobbyists and former government officials, as well as increased efforts in the nation's capital to pre-empt any pro-worker bills that might allow for driver reclassification. 

"They can make the argument they're trying to enhance how their company does business. But we don't know that for certain—neither of these companies have been profitable,” Louis Malizia, assistant director of Capital Strategies, told Motherboard. “Are they promoting and spending far too much on lobbying and political efforts for unsustainable business practices? That's one big question that we have."

The shareholder proposal shared with Motherboard calls for Uber and Lyft to prepare annual reports that disclose policies, procedures, and payments for direct and indirect lobbying as well as "grassroots lobbying communications." Grassroots lobbying communication is defined in the shareholder proposal as a public-facing message that either refers to specific policy, reflects a view on it, or encourages individuals to take action. Indirect lobbying is defined as efforts taken up by organizations of which Uber or Lyft are members. For example, this would cover activities undertaken by the Yes on Prop 22 campaign in California. 

The lobbying operations under scrutiny in the dual proposals have grown over the years. From 2016 to 2020, Uber spent $9.6 million on federal lobbying while Lyft spent $4.4 million from 2016 to 2020. Neither of these figures include state lobbying, which often has incomplete records or in many instances no disclosure requirements. Both companies have lobbied at least 41 state legislatures to protect misclassification, Lyft had at least 196 lobbyists in 39 states as of 2019, and Uber has made clear it plans to take misclassification nationwide with its IC+ model.

According to the proposals, both companies are also members of the Consumer Technology Association, Internet Association, and NetChoice, which together spent $9.1 million on lobbying in 2019. As the proposal points out, these companies are not required under the federal Lobbying Disclosure Act to identify money spent on grassroots lobbying, nor "memberships in, or payments to, trade associations, and social welfare organizations, or the amounts used for lobbying at the federal or state level."

“This is shareholder money, not PAC money. This is how our investments are being used,” said Louis Malizia, assistant director of Capital Strategies. “We need this information to be easily accessed and transparent. This is the only way we can assess if their political spending and activities through lobbying have the right alignment."

The Teamsters are also hoping to appeal to investors on the grounds that lobbying efforts by Uber and Lyft are not only a waste of shareholder resources, but directly harming each company's reputation and sparking a wave of PR crises. 

Uber, for example, noted in its S-1 filing that "failure to rehabilitate our brand and reputation will cause our business to suffer" and is currently ranked 80th on a recent survey of 100 well-known companies and their reputations. Lyft, which marketed itself once as a “woke” Uber, also admits to similar risk in its S-1 and admitted its ability to "maintain and enhance the value of our reputation and brand" was an investor risk.

To date, Uber's largest shareholders are SoftBank, Morgan Stanley, Fidelity Investments, and the Public Investment Fund. Lyft's largest shareholders include Fidelity Investments, JP Morgan ( which also invested in Uber), and the Vanguard Group (also invested in Uber). Investors are unlikely to be concerned about anything other than returns and may likely view lobbying efforts as a way to realize them—after all, Uber and Lyft only spent tens of millions of dollars in California but saw market value increase by billions of dollars in Lyft’s case and tens of billions in Uber’s case. 

"Both companies are brand-focused businesses, but see how much press attention has negatively reflected back on each company and led to certain regulatory issues that have hurt their business," added Malizia. “Is all this effort and all of these resources, in the end, harming the company's reputations and helping them follow a path that's already proven to never show any real profitability?"

Uber and Lyft did not immediately respond to Motherboard’s request for comment.