In the high-flying world of tech startups, being a disruptor is king. And like a king, they often get to make their own rules.
A disruptor in the tech startup world is a company that combines a new technology with a new business model. The result is a company that disrupts and completely upends existing markets. Sometimes even disrupting existing rules and regulations meant to keep consumers and employees safe.
Often, these disruptive business models operate in a legal and regulatory gray area as they chase meteoric growth at all costs.
The ubiquitous ride-sharing company Uber was a perfect example of this new venture capital-fueled disruptor phenomenon, and it has now become the model for many disruptive startups that have followed.
When Uber first launched in 2009, it essentially operated as an unlicensed taxi service. Due to the decentralized nature of the app, which connected customers directly with drivers, government agencies found it difficult to regulate and control.
Uber capitalized on this slow start by regulators to grow as fast as possible while disregarding most statutes that existing taxi services were forced to operate under.
The plan worked. By 2015, Uber had become the most valuable startup in the world. With that success came billions of dollars. Billions that could be used to pay lobbyists to help them rewrite regulations in their favor.
Today, Uber has focused its lobbying efforts on Nevada with the hopes of capping attorney’s fees in civil cases. A move that could harm those who have suffered damages and drastically change the legal landscape in the Silver State.
What Makes Uber’s Lobbying Efforts Different
It’s not unusual for companies to spend money lobbying. Companies have rights and they are free to have their voice heard during the legislative process.
What makes Uber’s lobbying efforts unique is that their efforts stem from an original business model that deliberately skirted existing regulations and then slowly used the success gained by that behavior to rewrite new regulations in their favor.
In a trove of internal Uber documents leaked to The Guardian, executives stated in messages that “we’re just [explitive] illegal” when discussing their business model with each other.
When taxi drivers in Europe started to push back against Uber’s intrusive entry into the market and heavy-handed lobbying efforts, then-CEO Travis Kalanick messaged his executives, urging them to promote counter-protests among their Uber drivers.
In one message, Kalanick wrote “violence guarantee[s] success” when asked about the possible blowback or risk from creating counter-protests in such a heated environment.
This no-holds-barred management approach was showing success. By 2015, Uber had created a virtually unprecedented $90 million lobbying network that included direct access to world leaders like Emmanuel Macron, powerful media moguls, and oligarchs in emerging markets.
Although Kalanick has since left the company and Uber has stated that many of those earlier leaked communications were “missteps”, Uber’s heavy-handed lobbying efforts have not slowed down.
Uber Lobbyists Set Their Sights On Nevada
In early 2024, The political action committee (PAC) known as Nevadans For Fair Recovery introduced a ballot measure of the same name.
The PAC, which is backed by Uber, has stated the goal of the ballot measure is to cap attorney’s fees to 20% of settlements and awards in civil cases.
According to the Nevadans For Fair Recovery website, the purpose of capping attorney’s fees is so that a larger portion of settlements and awards go to the plaintiff in the case.
However, given Uber’s history of lobbying efforts, critics have argued the true goal is to disincentivize civil action when individuals have suffered damage due to a company’s negligence or wrongdoing.
By capping damages, personal injury lawyers may not be able to deploy the full resources needed to properly argue a case against companies like Uber. The result is that plaintiffs would be forced to take lower settlement offers since proceeding with the case may simply be too expensive with a 20% cap on attorney’s fees.
This means lower total costs and legal expenses for companies like Uber.
Uber lobbyist Harry Harfield pushed back against this criticism and has stated that the goal of the ballot measure is to “put victims first”.
However, Harfield didn’t clarify how limiting a victim’s access to legal resources during a civil trial offers them any protection, which is exactly what this ballot measure would do.
This measure creates an obvious asymmetry where large corporations can deploy virtually unlimited legal resources, yet victims and their lawyers must wrestle with a hard cap on attorney’s fees.
As it stands, proponents of the ballot measure are busy collecting the necessary number of voter signatures required before the November 20 deadline.
The measure would then be sent to the legislature where they can approve or reject the measure. If approved, it moves to the Governor’s office for signing. If rejected, it will be moved to the ballot during Nevada’s next general election.
Uber’s Mounting Legal Trouble
It doesn’t take much digging to understand why Uber would find it beneficial to disincentivize civil action against them.
Currently, Uber is facing a flurry of lawsuits related to its service and whether or not the company is doing enough to protect passengers and drivers.
Between 2017 and 2020, there were nearly 10,000 reports of sexual assault that occurred during Uber trips. 40% of these cases involved sexual assaults committed against Uber drivers. In 2023, two groups of lawsuits were separately consolidated in California, where some legal experts believe these cases could be a bellwether moment for Uber.
Uber Looks To Continue Its Lobbying Success In Nevada
While Uber lobbyists claim their ultimate goal is to protect victims, the company’s documented behavior dating back to 2015 suggests otherwise.
But despite that, it can’t be denied that Uber’s past lobbying efforts have been highly successful. Uber was founded on the premise that it would disrupt an entire industry, and it made good on that effort and became a model for many disruptive companies that followed.
Now, Uber is looking to disrupt the legal landscape in Nevada that was originally designed to help victims who have suffered damages.
If their lobbying efforts are successful again, it could place victims of negligence at a severe disadvantage when faced with the enormous legal resources of billion-dollar companies like Uber.
The post How The Uber-Backed Ballot Measure “Nevadans For Fair Recovery” Will Harm Victims Of Negligence appeared first on Vegas Legal Magazine.