The Best Investment is to Hire a Team of Lobbyists

Late last year, a leaked screenshot of Uber’s Internal Revenue and Ride Numbers indicated that they were on track to make more than $200M in revenue for 2013.

They started last year serving 14 US cities and ended the year with 25. Given unchecked expansion, it won’t be long before Uber is eating a substantial chunk of the $11B taxi and limo industry.

Ridesharing proponents argue that the taxi industry should take this as a cue to reform their third-world system. If hailing a cab in SF wasn’t such a crappy experience, nobody would need Lyft or Uber.


Unfortunately, repairing the existing system is a poor investment of resources, from the perspective of industry incumbents.

A far more effective option: Spend a few hundred thousand hiring a team of lobbyists to further your cause. The lobbying team identifies key policymakers, and throws fundraisers to help them raise campaign money. Your team becomes a big donor, the candidate is elected, and industry regulation is at your mercy.

Last week, the Seattle City Council whimsically voted to enforce new legislation that will limit app-based transportation companies to 150 cars on the road at any given time in an artificial suppression of supply.


If new market entrants are blocked, the hundreds of thousands spent influencing public policy can lead to billions saved in the long run for incumbents. Former lobbyist Jack Abramoff assures that a successful lobbying effort achieves returns that are multiplied hundreds of times over the initial investment. This is even better than the return that Uber’s Series A investors got.

Transportation lobbying is a $230M industry with customers from all the major automotive manufacturers, labor unions, and transit authorities. Disruptive businesses claim that the current transportation system is broken, but when hiring lobbyists represents a better financial choice than trying to fix the transportation industry, maybe something else is broken.

See Also:

Corruption Index Indicator: Cities That Ban Ride Sharing To Protect Taxi Incumbents –techdirt

How Corruption Is Strangling U.S. Innovation –HBR


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