Uber, Lyft use new tactics, huge spending to push Prop 22

Felipe Caceres of Mobile Workers Alliance speaks against Proposition 22

Oct. 8, 2020 5 AM PT

If you’ve called for a ride through Uber in California recently, you may have felt like you were being asked for more than just your money.

Last week the ride-hailing app served users with a pop-up threatening that if voters failed to pass Proposition 22 on the Nov. 3 ballot, wait times and prices would ratchet up, and drivers would lose their livelihoods.

To move forward with ordering a ride, users had to tap the “confirm” button on the message.

Proposition 22 is a complicated and divisive initiative that represents gig economy companies’ efforts to avoid complying with Assembly Bill 5, a California law that requires they treat their workers as employees rather than independent contractors.

Bankrolled heavily by Uber and Lyft, the measure would carve out a new category of work for drivers, sparing the companies from paying for full benefits that employees receive.

Experts say the companies’ electioneering, particularly the use of in-app notifications by both, is highly untraditional and notably aggressive.

Using the massive platform of a popular mobile app is the “ultimate direct marketing” and has the potential to change campaign strategy, said David McCuan, a political science professor at Sonoma State who studies California ballot measure campaigns.

“People are watching this campaign to see how much spending you need to get that Yes vote — how smart it is to drive messages to end users directly,” he said. “It’s a case study of what will work and what doesn’t work in real time.”

If Uber and Lyft secure a win, their strategy could serve as a road map for other business interests, and “that’s gold from a company standpoint,” McCuan said.

The outcome will also set precedent for how other states structure employment law around gig workers, analysts say.

Although aggressive, app notifications seem to be fair game. Jay Wierenga, a spokesperson for California’s Fair Political Practices Commission, said he could not comment on the specific activity because the commission avoids inserting itself during election season. Broadly, Wierenga said that if political advertising has the proper disclosure on it letting the public know who is sponsoring the communication, it’s probably in compliance with the law.

The Uber notification includes a small line of gray print reading “paid for by Uber.”

“None of that’s illegal, though it might alienate some customers,” said Robert Stern, a former general counsel of the Fair Political Practices Commission and a coauthor of the state Political Reform Act.

“I certainly would not be happy if I received an ad like that, because I’m engaged in a business relationship with them, not a political one,” he said.

Some people were, in fact, upset about having to hit confirm on an affirmative Proposition 22 message before riding.

“It’s scummy that Uber made me ‘confirm’ this before riding? What?” one user tweeted.

“i love it when i must “confirm” that my politics are acceptable to the megacorporation before using their services, very cool and normal,” another user wrote.

Uber says the “confirm” button was not intended to force customers to express support of Proposition 22, but was simply the same button everyone sees to confirm their ride request. The pop-up was updated to say “continue to ride” to avoid any confusion, the company said.

Tuesday morning, Uber sent a push alert, the latest in a string of notifications over the last few weeks, this one asking users to vote early on Proposition 22. The notification comes as 21 million ballots make their way to registered California voters this week, in a historic vote-by-mail effort in response to the COVID-19 pandemic.

Lyft spokesperson CJ Macklin said in a statement that “if Prop. 22 fails, hundreds of thousands of drivers could lose the opportunity to earn on Lyft entirely. That’s why we’re fighting so hard to spread our message and ensure every voter knows that a Yes on Prop. 22 will protect driver independence plus benefits.”

Uber spokesperson Davis White said the company is using the app to help drivers “share their voice with millions of riders in California.”

Legally, company emails and in-app notifications are not paid advertisements for the campaign. Rather, they are in-kind donations — essentially noncash gifts of goods, services or time — by the companies to the Yes on 22 campaign and are reported as non-monetary contributions, according to Uber and Lyft representatives.

For example, Uber contributed a “consumer email list” with a value of $693,000 on Sept. 17 and employee time for the months of July and August worth $135,000 total, according to Yes campaign disclosures.

From the beginning of the campaign through Oct. 6, Uber, Postmates and Lyft have given roughly $3.5 million, $1.4 million and $1 million in non-monetary contributions, respectively. DoorDash gave $209,558 and Maplebear Inc. (Instacart’s official corporate name) gave $122,793.

The contributions are only a drop in the bucket of spending by gig companies. The $186.2 million contributed to the campaign so far has made it the costliest ballot measure campaign in U.S. history.

The opposition campaign raised a comparatively modest $14.6 million. (The campaign received an injection of over $4 million from labor groups including Service Employees International Union and United Food and Commercial Workers International in the last two weeks.)

Although the in-app ads are attention-getters, they’re not technically different from any corporation urging its customers to support a law, said Rob Stutzman, former deputy chief of staff for communications for Gov. Arnold Schwarzenegger. There’s a long history of similar tactics, he said.

“I thought [the notification] was aggressive when I first saw it, but I’m glad the business wanted to put some skin in the game,” Stutzman said. “Clearly Uber and Lyft have decided this is potentially existential for them in California. I could see why they would be comfortable subjecting their consumers to this.”

In 2004, then-Gov. Schwarzenegger partnered with Costco and set up shop at the Burbank location to collect signatures directly from customers for a ballot initiative that aimed to overhaul the state’s $20-billion workers’ compensation system.

The Teamsters Union, which at the time represented about 11,000 of the company’s California workers, sent a letter requesting that the state attorney general look into whether Costco was forcing its employees to engage in political activity.

In 2016, several porn sites blocked California users’ access for a day a few weeks before an election, in protest of a ballot initiative seeking to require performers in adult films to use condoms during sex scenes.

It’s famously difficult to secure Yes votes on ballot initiatives, even with the massive funding advantage the gig companies have. A confused voter is more likely to vote no on a ballot measure, experts said.

Major corporations have outspent their opponents by tens of millions and still failed in the past. For example, in 2010, PG&E spent $46 million to back an initiative that aimed to deter government-run power providers. The measure was defeated by a large margin.

Polling shows that the app-based companies are in danger of coming up short. In a recent UC Berkeley Institute of Governmental Studies poll, 39% of likely voters surveyed said they would side with the companies and vote yes on Proposition 22, compared with 36% who said they would vote no. An additional 25% were still undecided.

Still, some experts said that Uber and Lyft have been able to define the issue in simple terms and show people how the outcome of their vote could directly affect their lives — the potential loss of access to ride-hailing services as they currently operate.

The No campaign’s main message is that workers are being exploited by gig companies, but the Yes campaign is spending millions on combating exactly that point.

The campaign has flooded California airwaves with dramatic video testimonials from drivers on why a failure to pass Proposition 22 would leave them without flexible work. (Critics say this argument is disingenuous, pointing out that nothing in state employment law prevents the companies from continuing to provide flexibility to drivers.)

“You’re seeing them basically nonstop [on television]. They’re trying to saturate every message platform they can,” said Roger Salazar, a Democratic political strategist and veteran of California campaigns.

The campaign has plastered Facebook, Instagram and Google with ads. As of Wednesday, the Yes on Proposition 22 campaign had spent $1.9 million for 238 ads on Google, according to Google’s transparency report, and more than $4 million on Facebook ads, with $890,000 of that amount expended over the last week alone, according to Facebook’s ad library.

The companies “are using coercive advertising tactics to convince voters to swallow their poison pill,” said Mike Roth, a spokesperson for the campaign opposing Proposition 22. “Typically corporations have a brand. They try their hardest not to mix politics with their brand. So in that regard it’s unprecedented, but it’s not surprising coming from these companies that they are pushing a measure to buy their own law.”

Uber has made effective use of nontraditional political strategies in the past. Since its infancy, the company has smashed into markets, flouted local transportation rules, circumvented law enforcement and clashed with regulators as it exploded into the world’s largest ride-hailing business.

In 2015, Uber launched what it called “de Blasio” mode in New York as part of its lobbying efforts against a New York City bill that aimed to place a temporary cap on the number of drivers ride-hailing companies could add to their platforms.

The joke feature showed zero cars available or wait times of 25 minutes — essentially using scare tactics to argue to local users the bill was a disastrous idea. The feature also prompted users to email Mayor Bill de Blasio and the City Council opposing the bill.

Soon after, de Blasio’s administration announced it was dropping its plan.

Gig companies have been using Uber’s playbook all year, refusing to comply with AB 5, which established stricter standards for companies to treat workers as independent contractors.

In August, after a San Francisco County Superior Court judge ordered the companies to comply with the law and classify their drivers as employees rather than independent contractors, Uber and Lyft threatened to shut down their services indefinitely, saying they could not transition their business models fast enough.

Uber and Lyft had their wish granted; at the 11th hour, a state appeals court issued a temporary stay on the order, essentially pushing off the deadline for companies to comply with the law until after voters have a say on Proposition 22 and decide what the future of gig work in California will look like.

Times staff writers Terry Castleman and Ryan Menezes contributed to this report.