Insights

Turning Uber and Facebook Users Into Lobbyists?

Thursday, April 21, 2016

This blog post was written by Karen Blackistone Oaks, a partner with The Gober Group. She specializes in advising clients that are engaged in multi-faceted, multi-million dollar policy campaigns that incorporate a wide range of advocacy strategies.

I recently came across an interesting Harvard Business Review article in which the author questions whether Uber, Facebook, and other tech companies are turning users into lobbyists.  Start-up and tech companies have unique political needs, particularly those that are disrupting or challenging entrenched industries, and the article explored ways in which these companies are increasingly leveraging their customer base (i.e., their greatest ally) to advance political action.

While the article correctly summarizes this growing trend, the author grossly misstates an important legal point when he says that “such advocacy is mostly legal, at least up to a point.” The article goes on to say that “companies voicing political content, or asking citizens to contact their officials, is well-covered under the First Amendment.” This is a broad generalization that glosses over several points of great importance to companies seeking to leverage their customers for political objectives.

Most importantly, this broad statement ignores the fact that, in at least one-third of the states, such actions by a company may constitute grassroots lobbying, thereby triggering various registration and disclosure requirements for the company.

Secondly, this broad statement ignores the fact that such activity is taxable, meaning that a company that uses its resources to leverage its customer base for lobbying cannot deduct those costs as a business expense.

The article also provides a hypothetical example whereby Uber drivers might provide free rides to a candidate’s rally. The author insinuates that these free rides are generally legal but would be “more complicated” if the free rides (which obviously have a real commercial value) constitute in-kind contributions to the candidate. Here again, the article misses two important points.

First, if the rides were provided independently of the candidate and without consulting with the candidate in advance, the commercial value of the rides would considered permissible independent expenditures. At least in the case of a federal candidate, these independent expenditures would have to be reported to the Federal Election Commission.

Second, in-kind contributions from corporations to federal candidates are illegal. Therefore, if the hypothetical rides were discussed with the candidate in advance (i.e., coordinated with the candidate), they would be illegal unless the campaign paid for them. Not just reportable…not just more complicated…but illegal!

These fine points highlight the fact that Uber could certainly arrange free rides to a candidate’s rally, but they must understand the law and take the necessary precautions to ensure that the activities are not coordinated with the candidate. That includes, for example, not discussing or planning that activity with the candidate in advance.

Overall, I agree that the First Amendment may not prohibit the kind of political activity discussed in this article; however, any company considering leveraging their customer base to advance political action must do their due diligence to first understand the permissible parameters and consequences of those activities. In other words: just because it’s legal doesn’t mean it’s free of regulation and minefields.