Tuesday

September 30th, 2014

Big Government

Hands off My Sharing Economy

Debra J. Saunders

By Debra J. Saunders

Published August 25, 2014

Hands off My Sharing Economy
Uber CEO Travis Kalanick announced Tuesday that the San Francisco ride-matching company had hired David Plouffe, the campaign manager for Barack Obama's 2008 presidential campaign, as a senior vice president/campaign manager. This means war — an epic war — that will pit Uber and the Obama Whisperer against not only what Kalanick calls "the Big Taxi cartel" but also the giant insurance industry, a friend to both political parties, and the trial lawyer lobby, a key special interest for the Democrats.

"I think it's a great fit," Republican political operative Aaron McLear mused. Plouffe "sold a disruptive political candidate to America, which is essentially what he's being asked to do at Uber."

At a recent LincolnLabs conference, "The PayPal Wars" author Eric Jackson described disruption startups as ventures that begin skirting the law in the hope of having a big enough (and vocal enough) customer base when authorities start to close in.

Disruptors exist because governments cannot keep up with new technology. Uber wasn't even in business when Obama took the oath of office. Today the company is worth $17 billion.

This should be a golden moment for Republicans. Mitt Romney, the party's 2012 nominee, positively swooned when he talked about "creative destruction." In New Hampshire, he lauded the ability of consumers to "fire" their insurance companies. As in: "You know, if someone doesn't give me a good service that I need, I want to say I'm going to go get someone else to provide that service to me." That's pretty much the message of disruption jockeys — that they give people the right to choose their ride.

Plouffe's party is the party that pushes for regulations. As Plouffe prepares to move to San Francisco, he'll be leading a pro-Uber campaign worldwide — but from enemy territory. California's overwhelmingly Democratic Legislature has been working on a bill to require livery services such as Uber and Lyft to insure their drivers from the instant they turn on their smartphone apps. "I've never seen this as a bill that was (in) any way against any new innovation or technology in the marketplace," Democratic Assemblywoman Susan Bonilla said of her Assembly Bill 2293. She sees the measure, which would mandate that drivers and riders be protected with insurance in the event of an accident, as "charting the middle course." AB 2293, which probably would not have been controversial a decade ago, sailed through the Assembly with a 71-0 vote.

Not a single Assembly Republican voted against the bill. "That's because of the insurance industry," observed GOP strategist Rob Stutzman. "Republicans are not looking at this in a new-world way, either."

Two state senators have opposed the bill in committee — Republican Ted Gaines and Democrat Ted Lieu. Both senators left the door open to voting for the measure on the Senate floor if it is amended to their satisfaction. What's interesting is that these two Teds from opposing parties have demonstrated that they see the moment before them.

Lieu, a onetime computer science major, told me, "I voted no because (though) the Legislature is good at a lot of things ... we are not nimble." The California Public Utilities Commission has devised liability requirements; if the PUC sets limits that are too high or low, it can fix itself in short order. Not the Legislature.

Gaines, who is running for state insurance commissioner, said that when he voted on the bill, its liability limits were too high and thus had the potential of "adversely affecting the pricing structure of Uber and Lyft."

All the other legislators voted for the measure or did not vote at all. How does Plouffe plan to turn the vote around? I doubt he's planning to lubricate lawmakers over three-martini lunches. He excels at a ground game. Already, ride-sharing apps have sent out mailers to voters in Bonilla's district that accuse the assemblywoman of "leaving consumers and entrepreneurs on the curb while she takes a ride with her special interest friends." They've sent emails to subscribers telling them to hector their senators. Lieu told me they work. His constituents want him to vote no.

Ambivalent on the bill itself, I watch in wonder. It will take a Democrat to do to Dems (and foot-dragging Repubs) what Obama 2012 did to Romney — and the Democrat will do it in the name of consumer protection, not creative destruction. The message will resonate because the Obama economy is so moribund that 20-somethings are desperate to save a buck. Watch and learn. This is the advent of the politics of personal disruption.

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