Wear: Of Uber, Lyft and how ‘corporate civil disobedience’ works in Austin


I’ll say upfront that I don’t believe Uber and Lyft’s flouting of municipal and state laws across the country will lead us to a “Lord of the Flies” scenario where the social contract disintegrates and it becomes every U.S. man, woman and child for themselves. There’s a very good chance that the “transportation networking company” business model is a one-off. No other large companies are emulating it so far, to my knowledge.

But what they’re doing is jarring, to say the least.

The playbook goes this way: Come into a town or state and, even if the law says you can’t carry people around for profit without registering your cars and drivers or following some specified steps, just start doing it anyway. Then, because there’s apparently a large market for hailing rides with an app and plenty of new drivers willing to go do it (including former cabbies sick of driving a lot for a little), providing the service will build a political constituency that in turn will force the politicians and/or bureaucrats to change their laws and regulations. Or at least look the other way.

Oh, and while you’re at it, vigorously disseminate the idea that anyone who disagrees with this approach is anti-technology, anti-future, anti-innovation. Laughable, really, in their get-off-my-lawn old fogey-ism. And, as an aside, how could anyone really invest themselves policywise in a bunch of funny-looking, sometimes smelly old cabs with surly, underpaid drivers? Give me that fist bump, dude.

When the subject of this blatant disregard of the law comes up, you hear the argument that, hey, who hasn’t rolled through a stop sign, or driven over the speed limit or, maybe, fudged their income taxes? Let he who has not sinned cast the first stone, in other words.

The problem is that this is like building a company based on the idea of running stop signs or speeding, and making a profit off of it. This is not the way we do things in America, is it?

Yes, the app-based ride-providers faced a formidable political challenge when they got going three or four years ago: entrenched taxicab companies with long years of connections at the local and state level, and a built-in corps of political foot soldiers — cabbies with a formidable pecuniary interest in maintaining the status quo. The first ride-hailing dot-com that came to Austin and tried to insert their new model into the transportation scene ran into a sturdy wall of resistance and a court order to stop providing the rides.

They meekly went away.

Not Uber and Lyft. They stormed in late last spring, signed up drivers and hit the streets. There were stings by city enforcement officials, citations, car impoundments and a study committee formed to figure out how a compromise solution might be found. You know, a political, democratic approach. Stodgy, slow and, for the new guys, far from a sure bet given that the working group had representatives from the city’s taxi companies.

By October, with that committee only about halfway through its work, and after Uber drivers (with company assistance, it seemed) staged some demonstrations (Gandhi would be so proud), the companies managed to get the Austin City Council to legalize them with an “interim” ordinance.

That city law, which Uber and Lyft apparently blessed, conferred on the city’s Aviation Department director authority over one last frontier: rides to and from Austin-Bergstrom International Airport. Airports are a special animal, given that you have a lot of people converging on a confined space, and a number of other city-licensed ground transportation providers (not just cabs) already at work there and paying for the privilege.

So airport officials began negotiating early this year with the two companies. The airport set a March 6 deadline for a deal, one that Lyft agreed to and signed a one-year contract. Uber? Nope, didn’t care for the terms.

So what does a well-funded, red-blooded U.S. corporation typically do in such circumstances? Go back to the table or, maybe, to court.

Uber drivers instead went back to the airport, especially with South by Southwest starting. Lot of folks coming in, many of them used to getting Uber rides. A lot of money to be made, by the drivers and by Uber.

One week later, after machinations the city and the companies are shy about sharing, that 42-page Lyft contract, which would have given the city 10 percent of the fare revenue, was in the ash can. In its place, page-and-a-half letter agreements with each company to provide rides at the airport for 45 days while negotiations continue. With no sharing of fare revenue, just a modest upfront payment to the city.

Maybe all of this portends no slippery slope. Perhaps other corporate leaders won’t be comfortable doing it this way. Maybe they prefer the old-fashioned (if not necessarily odor-free) process of political donations and lobbyists, cajoling and compromise.

But people tend to look at what works and copy it. And what Uber and Lyft are doing here and across the world — what to call it? Corporate civil disobedience? — appears to be working.


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