Christopher L. Carter

Platform companies disrupt not only the economic sectors they enter, but also the regulatory regimes that govern those sectors. We examine Uber in the United States as a case of regulating this disruption in different arenas: cities, state legislatures, and judicial venues. We find that the politics of Uber regulation does not conform to existing models of regulation. We describe instead a pattern of disrupted regulation, characterized by a consistent challenger-incumbent cleavage, in two steps. First, an existing regulatory regime is not deregulated but successfully disregarded by a new entrant. Second, the politics of subsequently regulating the challenger leads to a dual regulatory regime. In the case of Uber, disrupted regulation takes the form of challenger capture, an elite driven pattern, in which the challenger has largely prevailed. It is further characterized by the surrogate representation of dispersed actors—customers and drivers—who do not have autonomous power and who rely instead on alignment with the challenger and incumbent. In its surrogate capacity in city and state regulation, Uber has frequently mobilized large numbers of customers and drivers to lobby for policy outcomes that allow it to continue to provide service on terms it finds acceptable. Because drivers have reaped less advantage from these alignments, labor issues have been taken up in judicial venues, again primarily by surrogates (usually plaintiffs’ attorneys) but to date have not been successful.

The rise of labor platforms is a cause and consequence of an ongoing change in the nature of work toward a model where workers split time across multiple companies, without the rights and benefits of employment. Given that Uber exercises more control over workers than most other labor platforms, it provides a most likely case for regulation. Nevertheless, regulators in legislative and judicial arenas failed to regulate labor on ride-hailing apps in the first six years. We explain this failure in terms of 1) the problem of classifying a new type of firm, and 2) the relative distribution of power between labor and capital. The weakness of the former emerges from collective action problems and has given rise to a form of skewed surrogate representation. A handful of recent regulatory attempts introduces a note of uncertainty for the future.