“Biggest lobbying operation I’ve seen for a long time. They started early and worked hard.”
That’s how William Miller, a longtime Austin lobbyist who represents the City of Houston, characterized the lawyers and consultants tapped by Uber Technologies Inc. and Lyft Inc. for the most recent regular Texas legislative session.
The ride-hailing companies’ army of some 40 lobbyists succeeded in getting passed a law placing transportation network companies under state control and barring cities from enacting their own regulations.
For those companies, the state lawmakers’ votes represent a bargain. In 2016, Uber and Lyft spent $8 million trying to persuade Austin voters to repeal a city ordinance requiring background checks for drivers. The two companies lost despite the millions spent. At the Legislature this session, the two companies made one-quarter of that spend on lobbyists and won a statewide victory.
“The bill that was drafted was a pure industry bill. That’s what they wanted and that’s what got. It’s done deal,” according to Miller, who represented the city of Houston, which opposed the new law.
Among the big lawyer names working for Uber: Robert Miller (no relation to Hillco’s Miller), a partner at Locke Lord and one of Austin’s top lobbyists.
Miller will be compensated as much as $99,000 for his work for Uber in this legislative session, according to reports filed with the Texas Ethics Commission.
Uber and its rival Lyft worked together to get Texas to join 41 other states that have statewide laws governing their industry.
Uber wasn’t sharing more details about its expensive campaign to persuade Texas lawmakers.
“We don’t discuss proprietary information,” Travis Considine, an Uber spokesman, said in an email.
Considine did provide a company issued statement: “It is time to move beyond the inconsistent regulations across the state that stand in the way of transportation innovation and adopt a consistent, commonsense law focused on safety and access to new technology. A statewide solution would allow Uber to expand across the state of Texas and help to bring greater economic opportunity and access to safe, reliable transportation for more Texans.”
For his part, Hillco’s Miller said he was reminded of earlier years when Republicans, who control the Texas Legislature, cherished the notion of local control. That mantra has since become obsolete, he said, in the wake of the oil and gas and the ride-hailing companies’ efforts to stop individual cities and towns from setting their own rules, which could reduce corporate revenues.
“No one has used those two words, ‘local control,’ more than Republicans, but that was yesterday. Today, it’s ‘too much local control,’” Miller said. “This win [for Uber and Lyft] captures in a perfect way the spirit of what’s taking place.”
Texas is not the only place the ride-hailing companies target state lawmakers for wooing.
In New York, the state’s ethics and lobbying regulators recently fined Uber a record $98,000 for underreporting how much it spent on lobbying.
Uber failed to report $6.3 million in lobbying expenses in 2015 through 2016 on its biennial registration report, the Joint Commission on Public Ethics announced early June.
The underreporting stemmed from the company’s lobbying efforts to quash a 2015 proposal by New York City Mayor Bill de Blasio that sought to temporarily cap Uber’s growth so the de Blasio administration could study the impact that ride-hailing had on traffic congestion.
The ride-hailing company had relied on a third-party compliance firm to submit its lobbying filings to record keepers and those records have since been amended, according to state officials.
“We updated our reports because there were unintentional omissions from our initial disclosures,” said Uber spokeswoman Alix Anfang. “Uber NY has revised its processes and no longer uses the third-party filing firm who prepared these disclosure statements.”
Anfang declined to identify the firm that prepared lobbying disclosures on behalf of Uber.
This year, Uber has had a significant lobbying presence in Albany, New York, and has spent hundreds of thousands of dollars on advertising to legalize ride hailing outside of New York City. After a failed attempt to approve ride hailing last year, the company focused on getting the issue resolved in the state budget passed in April. Ride hailing in areas outside of New York City is expected to begin this summer.
Uber, in particular, might view the Austin win as its only glimmer of good news. On a long list of bad news for the company last month, a court allowed to go forward a lawsuit against the Philadelphia Parking Authority filed by the city’s taxi companies over the PPA’s alleged failure to regulate competitors Uber and Lyft.
The company fired 20 employees in June after receiving findings from an investigation by Perkins Coie into claims of sexual harassment and discrimination.
San Francisco’s city attorney on June 5 stepped up his scrutiny of ride-hailing operations, issuing administrative subpoenas to Lyft and Uber for records on driver practices and the services the companies offer to disabled riders. Then in the middle of June, the company released a report produced by a team of Covington & Burling lawyers, led by former U.S. Attorney Eric Holder, about allegations of harassment, discrimination and retaliation at the company. A blog post by a former engineer had triggered the investigation. The Holder team conducted over 200 interviews with current and ex-employees and concluded among other thing that Travis Kalanick, the founder and CEO of the company, needed his duties “reallocated” as well as having the company take major steps to improve diversity.
In Austin, the ride-hailing companies were not the only ones spending money on lobbyists in Texas. Jack Erskine, the administrative partner in the Austin office of K&L Gates, received as much as $1.4 million in compensation from 29 clients, including the Alliance of Automobile Manufacturers, the American Legal Finance Association, Paypal, Perdue Farms and United States Steel Corp.
He views the trend of companies such as Uber trying to get change in state Houses as a potential boon for the law firms that have stayed in the lobbying game in Austin, since many have pulled out and left room for mostly lobby-only shops. “We are getting hired on more issues by more clients,” Erskine said.
With Washington often stymied by political gridlock, Texas and other state capitols have become more attractive for lobbyists’ clients, Erskine and other lawyers said.
“Some of the business came out of our Washington office from clients that had never been in Texas before,” he said. The adage—think globally, act locally—has taken on new meaning in light of this trend, he said.
Royce Poinsett, a senior attorney with Gardere, has seen the same trends: Fewer law firms competing along with more business for those that stayed, including his.
“There are slightly fewer law firms, but certain firms like ours have increased our presence. There are a couple of us that are doubling down,” he said.
The Gardere team lobbied for Wal-Mart, Halliburton, Texas film director Robert Rodriguez’s Troublemaker Studios, the Pew Charitable Trusts, the Texas Veterinary Medical Association, Archrock Inc. and Caterpillar and its Texas dealers. Poinsett received as much as $2.25 million in compensation from those clients for lobbying, according to the TEC records.