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Will Big Taxi's massive political spending advantage leave ride-sharing groups stranded?

by
This is Uber's logo

Uber is one of several ride-sharing companies fighting taxi cabs and insurance in states across the U.S.

The next time you’re stuck at the airport, stranded by the side of the road or trying to catch a ride home on a Saturday night, consider the following fact: the taxi cab industry has donated at least $3,500 to the political war-chests of state legislators for every $1 that Uber, Lyft and Sidecar gave.

This massive discrepancy in political giving may also explain why, since the start of 2014, at least 12 states and the District of Columbia have introduced new regulations aimed to limit these popular ride-sharing applications, according to a review of legislation from the Sunlight Foundation’s Open States project.

While this imbalance in campaign spending, calculated from data between 1990 and present maintained by the National Institute on Money in State Politics, may seem staggering, it also understates the advantage the taxi companies have. Insurers are also fiercely opposing companies like Uber that allow customers to hail rides via their smartphones.

Insurance company associations are pushing for a bill in California that would place harsh restrictions on ride-sharing companies; they spent $6.1 million on lobbying in that state alone over the past two years, according to a recent San Francisco Chronicle story.

Taxi company donations to state-level elections 1990-present. Source: www.followthemoney.org

As the battle over ride-sharing becomes more a competition to win over lawmakers and regulators than customers, Uber, Lyft and Sidecar—America’s three largest ride-sharing companies—have entered the lobbying game themselves in several of the states trying to restrict digital taxi services. Of the 12 states we identified as introducing anti-ride-sharing legislation this year, at least one of the three companies had contracted lobbying services in all but Tennessee and New Jersey.

Because lobbying disclosure rules varies widely from state to state, it’s impossible to tell how much of an effort digital ride-sharing companies are making. While California requires lobbyists to report how much clients pay for their services, (Uber, Lyft and Sidecar spent a combined $384,000 to date, records indicate), other states ask for less complete information. Illinois and Rhode Island, for example, only mandate disclosure of lobbying events—such as a July 8, 2014 Uber sponsored “OPEN HOUSE RECEPTION FOR MEMBERS OF THE GENERAL ASSEMBLY AS GOODWILL” which cost about $5,500. Other states, like Florida, Maryland and Virginia, simply list whether a company is employing a specific lobbyist with no mention of how much they’ve spent and which pieces of legislation they’re lobbying on.      

Still, the ridesharing services are far behind the taxi industry when it comes to political spending. Just last month, Virginia regulators issued Uber and Lyft a cease and desist notice, effectively barring those companies from operating within state lines. The Virignia Taxicab Association PAC has given about $71,000 to statewide candidates in the current election cycle alone. Meanwhile, Uber, Lyft and Sidecar have yet to spend a dime.

Ridesharing’s recent forays into South Carolina are also illustrative of how money in politics intersects with the ability of businesses to operate in the free market. According to the Post and Courier of Charleston, S.C., Uber’s first overtures to enter four markets in that state have already drawn the ire of taxicab operators:

Jerry Crosby, a part owner and vice president of Yellow Cab of Charleston, said his company and several others across the state have discussed starting a "legislative process to halt any Uber involvement in South Carolina."

"We are just taking the initiative to say, 'We just don't want you (Uber) in our backyard. We don't think it's good for the transportation business,'" Crosby added.

The effort to win over lawmakers and regulators continues.