Will the Uber Fight Haunt de Blasio in 2017?

By
A canary-in-the-coal-mine moment. Photo: JUSTIN LANE/© Corbis. All Rights Reserved.

Mayor Bill de Blasio believed that the pieces needed to score a quick win were in place. A public hearing had been held; a vote by the ideologically simpatico City Council to cap the growth of Uber was coming soon.

Instead, a multimillion-dollar barrage of attack ads blared from TV screens and websites. A DE BLASIO button on Uber’s app enabled enraged customers to pelt City Hall with nearly 20,000 emails and clog his Twitter feed. Dead-tree media weren’t any kinder: The editorial pages of all three city dailies labeled de Blasio’s cap plan a bad idea. The war even followed the mayor across the ocean — he found himself answering a question about Uber at the Vatican, after delivering a speech on climate change. 

The end came head-spinningly fast. De Blasio stood firm in defense of the cap for a week, then suddenly relented. On Tuesday afternoon, City Council Speaker Melissa Mark-Viverito called de Blasio in Italy. She told the mayor she had the votes to pass the cap on Uber, but believed a negotiated compromise was better for everyone. Then, shortly after 8 p.m., Michael Allegretti, a former Republican congressional candidate who is Uber’s director of public policy for New York, emailed Tony Shorris, de Blasio’s first deputy mayor.

It was the first direct high-level communication between Uber and de Blasio’s staff in nearly seven days. Allegretti asked if Shorris felt like talking. A meeting was quickly and stealthily arranged for the following day at noon — across the street from City Hall, at 250 Broadway, inside the City Council’s offices. Over the course of two hours, representatives of Mark-Viverito, de Blasio, and Uber hammered out a deal. The mayor’s camp insists that the city got important concessions from Uber. Uber staved off an existential threat, a hard cap, and will keep adding cars and drivers, at least until the city completes a four-month traffic study.

But de Blasio hadn’t been prepared for the onslaught. What was truly disorienting for him — and politically ominous — was that the roles had been scrambled. The mayor assumed he was the progressive defender of moral fairness and the little guy: Of course city government should regulate anyone trying to add 10,000 commercial vehicles to New York’s streets. Of course he needed to protect the rights of Uber’s “driver-partners.”

Yet Uber was able to deftly outflank de Blasio on his home turf, co-opting pieces of his message, splitting him from his normal Democratic allies, and drawing together an opposition constituency that could haunt de Blasio in 2017. To do so, Uber deployed a sophisticated, expensive political campaign waged by lobbyists and strategists trained in the regimes of Obama, Cuomo, and Bloomberg. That campaign worked in part because even though Uber the company is motivated by the pursuit of profit, not social justice, Uber the product has some genuinely progressive effects. So Uber went straight at the mayor’s minority base, drawing it into its vision of the modern New York. The company’s ad blitz highlighted how Uber’s drivers are mostly black and brown. It held a press conference at Sylvia’s, in Harlem, where the company basically accused the mayor of discriminating against minorities by daring to try to rein in its growth. It pushed data to reporters showing that Uber serves outer-borough neighborhoods that for years were shunned by yellow cabs.

In doing so, the company was able to dispel its aura of Bloomberg-era elitism. Newer services like UberPool, which allows drivers to pick up multiple passengers who split the fare, would ease congestion and make the city greener. Uber exploited its appeal to a youthful, techie, multiracial liberalism, selling itself as about openness and choice — a choice that was being stymied by old bureaucratic ways that have no business in the new city. This was a direct hit on de Blasio’s greatest vulnerability: the mayor’s seeming defense of an entrenched and hated yellow-taxi monopoly that’s been one of his most prolific campaign contributors. 

A $50 billion company speeding toward a lucrative IPO managed to make de Blasio look conservative and protectionist instead of progressive. It’s an irony, and a conundrum, that resonates far beyond New York’s streets. Uber is just the latest manifestation of a revolution remaking the city, not to mention society. The company’s confrontation with de Blasio was a gaudy example of how a 20th-century government structure in general, and de Blasio’s old-school, union-backed political style in particular, is struggling to figure out how to cope with a 21st-century economy. That the clash over smartphone-dispatched cars took place against a backdrop of disinvestment in public transit — with New Jersey’s rail tunnels a crumbling daily calamity and the MTA facing a $14 billion capital-budget shortfall — is both emblematic and infuriating.

We’re in this massive shift, and our policy-makers generally don’t understand it,” says Andrew Rasiej, a civic tech entrepreneur who is on the mayor’s broadband task force. “We’re not talking just about tech start-ups anymore — every major New York industry is converting itself into a 21st-century business. Innovations need to be regulated, but the regulation mechanism we have, government, hasn’t caught up. The mayor and Uber is really a canary-in-the-coal-mine moment: Can government extract the value out of technology while protecting not the incumbent markets but the actual public who uses them?”

De Blasio still needs to convert those goals into actual dollars and laws. The big-picture stuff, though, took a backseat during last week’s messy endgame.

The mayor’s team maintains that there was no single moment, and no accumulation of political pressure, that brought it back to the bargaining table — that the mayor was always open to conversation if it led to sensible policy. “Uber wanted the cap permanently off the table. The mayor and the Council didn’t agree to that, and the city still retains that option,” says Phil Walzak, a senior adviser to de Blasio. “We now have access to Uber’s traffic data, which will make for a better traffic study. And we’ve got Uber saying they will discuss issues that are really important to the entire industry, including a contribution to the MTA. All of that is a better product than what the cap alone would have done.” The mayor is also realistic enough to know that if the Council had enacted the cap, Uber would have continued to hammer him, likely suing the city and trying to get Albany to step in on the company’s side. Crafting a compromise may yield better taxi policy, but it also avoids some political pain. For now, anyway.

Uber’s strategy in beating back the cap resembled the one deployed by the charter-school movement to give de Blasio headaches, only with more focus and raw muscle. The similarities were no accident. “Uber has a lot of the same consultants as the charter-school people,” a business leader who is sympathetic to de Blasio says. “To the mayor’s people, the possibility of that coalescing into an actual political opposition is a clear and present danger.”

Uber was able to mobilize a new coalition of young and tech-savvy New Yorkers along with elements of the city’s minority community. Maybe those people — Uber liberals — want nothing more than cleaner, more reliable cab rides. But this battle provided a template for what a bona fide 2017 electoral challenge could look like: the nimble use of social media and big money on behalf of a forward-looking, competence-based agenda that at least appears racially and economically progressive. If those forces ever got behind an actual candidate — maybe with Uber offering its more than 2 million registered users free rides to the voting booth — Bill de Blasio could have a problem bigger than the street fight just ended. 

*This article appears in the July 27, 2015 issue of New York Magazine.

Will the Uber Fight Haunt de Blasio in 2017?