Business model

Uber paid for studies that supported its business model and opposes disclosure of current lobbying efforts

By Levi Sumagaysay

Leaked files from the ride-hailing giant show it paid hundreds of thousands of dollars to academics, a practice that could be disclosed in shareholder proposals Uber has asked investors to vote against

Uber Technologies Inc. reportedly paid top academics in the United States and Europe to produce reports that could be used in the company’s lobbying, while continuing to struggle to disclose more information about its current lobbying.

The Guardian reported on Tuesday, based on leaked files from a former Uber executive, that the company paid hundreds of thousands of dollars to academics to create and promote reports that substantiate the company’s business model. carpooling – consisting of using drivers that it does not employ directly – as innovative and beneficial for society.

Read more: Uber whistleblower – The company ‘massed the facts to earn the trust of drivers, consumers and the political elite’

In one example cited by the Guardian, a 2016 news article failed to reveal that a cited study was supported by Uber and that one of its co-authors was an economist employed by the company. One of the study’s co-authors was quoted as calling Uber a “social game changer.”

“Uber has a long history of search buying that presents a positive image of its business model,” Ken Jacobs, president of the Center for Labor Research and Education at UC Berkeley, said Tuesday. “It’s depressing when respected academics allow themselves to be used in this way.”

Jacobs noted that it is therefore not surprising that independent studies reach “very different conclusions”. An example: Uber’s estimates of the hourly earnings of workers who use its platform are generally higher than those of others.

In response to MarketWatch’s question about whether Uber continues to pay academics to do research that is then used for lobbying, a company spokesperson said, “In the rare cases where Uber has contributed financially or that the authors are under contract with Uber, this information is clearly indicated. He also said that the company’s “unpaid academic research partners are always contractually guaranteed the right to publish their findings.”

Shareholders have been pushing for Uber (UBER) to more fully disclose its lobbying activities: The Teamsters have taken the issue to the company’s investors for the past two years, approaching adoption of their proposal this year.

See: Uber and Lyft face pressure from shareholders to disclose how much they spend in fight for new labor laws

The Teamsters proposal – which asked Uber to disclose more information beyond what it is legally required to provide, such as the recipients and amounts of payments related to indirect lobbying efforts – received 45% of the votes. shareholder votes in May, against 31% of the votes. he got it last year. Uber’s board of directors rejected the proposal, saying the company already provides “state-of-the-art” information about its corporate American political contributions and independent spending on its website.

“If you don’t have good facts to lobby, you create them; it all feeds into the same multimillion-dollar influencer campaign,” Michael Pryce-Jones, senior governance analyst at MarketWatch, told MarketWatch on Tuesday. the Teamsters. “For investors, this raises exactly the same concerns: how much does Uber spend to secure favorable terms for its business model and what reputational risks are involved?”

Uber stock rose 1.8% to $21.57 on Tuesday, after falling 5.2% on Monday, following initial reports stemming from leaked documents released over the weekend. Uber stock is down 48.6% so far this year, with the S&P 500 index falling 19.9%.

-Levi Sumagaysay

 

(END) Dow Jones Newswire

07-13-22 0741ET

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