When firms lose: How timing and worker organizing impact Uber and Lyft’s regulatory battles

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Abstract

Big firms tend to get their way. Whether it be the oil industry or healthcare, firms find ways to convince regulators to provide favorable operating frameworks. These frameworks in turn tend to enable looser labor laws, avoid environmental restrictions or eliminate external threats to industries. Historically, the relationships between firms and the state have navigated traditional pathways such as lobbying to gain desired regulations. Firms in the gig-economy, proudly accepting the name “regulatory disrupters”, have deviated from that tradition. In line with the “move fast and break things” ethos of the contemporary tech industry, much of the gig-economy operated outside of regulatory frameworks in their early years. Companies such as Uber, Airbnb and others skirted rules that their more entrenched counterparts (taxi-cabs and hotels) had long abided. It seemed that even once regulations caught up to the disruptive companies, they were easily able to pull from a repertoire of strategies, adapt their approaches and avoid what they deemed burdensome rules. It would seem then that the disrupters, while using these adapted strategies, have had remarkably similar success to firms with a much longer political history. Yet, in the flurry of the rapid emergence of the gig-economy, there are exceptions to firms winning favorable rules. With a lens toward the failure of firms to reach their desired regulation, this paper searches for the set of conditions for unfavorable regulations for firms. Comparing the regulatory process of Uber and Lyft in Chicago, Austin and New York City, this study finds that there were two important features external to the regulatory process that led to success or failure: timing of regulation and worker organizing.

Author

• Ashley Baber, Augsburg University