Last month, a Cuyahoga County Council transit subcommittee proposed a $0.27 fee
on rides taken with Transportation Network Companies like Uber and Lyft (TNCs) as a mechanism for funding the financially imperiled Greater Cleveland Regional Transit Authority (RTA).
The proposal was a smart one, though impossible, thanks to a state law
that pre-empts local governments from taxing or regulating TNCs in any way. That law was passed in 2015.
We now know, thanks to new reporting
in The Intercept —
itself based on a report from the National Employment Law Project and the Partnership for Working Families —
that the Ohio bill's language was drafted by Uber itself.
(Both Clevelanders for Public Transit and Policy Matters Ohio had suggested that Uber was involved in drafting the Ohio legislation, but we didn't realize how central Uber's role was.)
In 2015, an Uber lobbyist with Ohio ties sent State Rep. Mike Duffey an email with a draft of the bill. He even drafted responses that Duffey could send to his "skeptical" colleagues to persuade them to support the legislation.
Robert Klaffkey, the lobbyist, was one of 370 that Uber employed, more than Apple, Microsoft and WalMart combined. That's why pre-emptive laws like Ohio's are now on the books in 40 states.
From The Intercept's report
Just eight months after Klaffky emailed Duffey, the bill found itself on Ohio Gov. John Kasich’s desk. As Cleveland.com once reported, Klaffky was considered to be in Kasich’s inner circle and a member of his “kitchen cabinet.” And Kasich prompted sign a bill that closely resembled Uber’s original wording into law [sic]. It came over the objections from organizations like the Ohio Municipal League, which argued that the bill stripped cities of their ability to regulate their own transportation sector.
Duffey represents suburban Columbus. He defended Klaffky's involvement to the Intercept by saying that “every bill involves input from the affected industries, including draft language for review.”
But that's a preposterous notion if there's literally zero other input. As it stands, this is not an Ohio law, it's an Uber law.
We noted last month that Ohio has put cities like Cleveland in an impossible position. It refuses to sufficiently fund public transit, but it also — thanks to pre-emptive legislation like this one, designed by the very industry the legislation should be regulating — won't let cities fund it themselves with alternative revenue streams that ought to be available.
Uber lobbyist Klaffky noted to the Intercept that his effort in Ohio was a "fairly ordinary" example of an industry trying to shape its regulatory environment. And indeed, this report arrives on the heels of reporting by Scene
and the Plain Dealer
that locally based real estate developer Stark Enterprises helped craft a proposed bill that would give Stark a no-strings-attached 10-percent refund on the nuCLEus skyscraper project. It's a good bet that the language was drafted by Stark's people, not state representatives or their staffs, and that it will be ratified — just like Uber's law — with language that "closely resembles" the original wording.
This is upside-down governance.
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