Uber, Airbnb, Tech Companies Spend Big Bucks Lobbying in N.Y.

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By Gerald B. Silverman

Internet companies like Uber Technologies Inc. and Airbnb Inc. are making their presence known in Albany, spending large amounts of money on lobbying and creating trade association offices to advocate for legislation.

Their increased presence comes at a time when issues critical to their markets are increasingly being decided at state houses across the country.

Twelve internet and technology companies, along with their trade associations, spent $5.5 million in 2016 to lobby the state Legislature, according to a Bloomberg BNA analysis of data from the state’s Joint Commission on Public Ethics (JCOPE).

That amount is more than double the $2.5 million they spent in 2015. While complete lobbying data has not been released for 2017, Uber has already spent at least $807,000 and Airbnb is on a pace to spend at least $308,000 to retain four lobbying firms, according to JCOPE data.

The interest groups working against technology companies were no slouches when it came to lobbying either. Ten organizations that lobbied against measures supported by Airbnb, Amazon, Uber and Lyft spent $1.4 million in 2016.

For example, the Committee for Taxi Safety, the Metropolitan Taxicab Board of Trade and other organizations concerned about ride-hailing spent $700,000 in 2016 to defeat a ride-hailing bill. The Hotel and Motel Trades Council, the Hotel Association of New York City, and the Hotel Trades Council spent $430,000 in 2016 in its fight against Airbnb.

Uber

Uber was the biggest tech spender by far in 2016, when it was pushing for a bill to allow an expansion of ride-hailing services to the upstate regions of the state. The company spent $2.3 million on its lobbying campaign. The Legislature didn’t act on the bill in 2016, but passed the measure earlier this year and Gov. Andrew M. Cuomo (D) signed it in April.

Airbnb ($642,000) was the second biggest spender in 2016, followed by Lyft ($432,000), FanDuel ($342,000), Microsoft ($297,000) and Amazon ($162,000).

“An overwhelming majority of New Yorkers support ride-sharing and elected officials, small business owners, clergy members, and law enforcement officials had been clamoring for the service for years,” Alix Anfang, a spokeswoman for Uber told Bloomberg BNA. “Having a presence in Albany was one of the many tactics we employed to ensure that New Yorkers gained access to better transportation options.”

Josh Meltzer, the head of New York public policy for Airbnb, told Bloomberg BNA that “our goal in Albany is to introduce lawmakers to their constituents who host, and explain the benefits of home sharing for working families and communities.”

“There are over 50,000 hosts and 2 million users in New York state,” he said. “In one year alone, Airbnb generated $3.5 billion in economic activity in the state.”

Increased Presence

Tech companies have also created a new trade association in New York City called Tech:NYC and opened an Albany office of the Internet Association as a way to increase their presence in New York.

Tech:NYC represents virtually every major internet and technology company, including Bloomberg L.P. Bloomberg BNA is an affiliate of Bloomberg L.P., the global business, financial information and news leader.

Julie Samuels, executive director of Tech:NYC, told Bloomberg BNA that tech companies have realized that they can no longer “fly under the radar.” Their presence in state capitals like Albany is growing, as the industry has grown in size, maturity, and economic impact, she said.

“This trend has been going on at the federal level for some time,” she said. “Now you’re starting to see more of it in state capitals.”

The Washington, D.C.-based Internet Association opened its Albany office in February 2017 with a statement saying that “New York state is at the epicenter of some of the country’s most important Internet policy debates.”

“The Internet economy represents 200,000 jobs and more than 10 percent of the Empire State’s economy and we want every New Yorker—from lawmakers in Albany to the residents of Rochester—to understand the value of the internet to the state,” John Olsen, the newly appointed New York executive director of the association, told Bloomberg BNA.

Key Tech Issues

At least four major technology issues have been debated by the Legislature over the past couple of years and tech companies have fared very well in blocking or passing bills on their agenda:

  •  Uber and Lyft successfully won enactment of a bill to allow ride-hailing in all parts of the state this year. Previously, ride-hailing was only permitted in New York City ( A. 3009-C).
  •  Airbnb fared less well in 2016 when it fought to defeat a bill ( A. 8704) to crack down on illegal Airbnb rentals in New York City. The law made it illegal to advertise or market a room for short-term rental in certain apartment buildings in the city.
  •  Daily fantasy sports companies like DraftKings Inc. and FanDuel Inc. scored big in 2016 when they won passage of a law that explicitly legalized daily fantasy sports under the oversight of the New York State Gaming Commission ( A.10736).
  •  Amazon.com Inc., eBay Inc., Etsy Inc., and online retailers have also done well by defeating for two years in a row a proposal by the governor to require online marketplaces to collect sales tax when they facilitate a sale to New York residents from sellers inside and outside of the state.

Next Big Issue

Next up for the Legislature and the tech industry is a bill ( A. 7520) supported by Airbnb that would legalize and regulate short-term rental units.

The bill was introduced relatively late in the current session by Assemblyman Joseph Lentol (D), chairman of the Assembly’s powerful Codes Committee.

The bill amends a law that dates back to 1929 by differentiating between illegal hotel operators and permanent residents who share their homes when they’re away.

“Last year, the Legislature passed a law based on fundamental misunderstanding of home sharing,” Meltzer said. “We hope to educate lawmakers and pass a bill that protects communities while also allowing New Yorkers to share the home in which they live.”

Future Trends

The trend in lobbying spending by tech companies is not expected to fade, as issues involving the so-called gig economy, self-driving cars, and data breach and security continue to be on the agenda for technology companies and the Legislature in the coming years.

“They’re very interesting issues,” Olsen said. “It’s what’s probably going to dominate the political landscape for the political future.”

John Tomassi, president of the Upstate Transportation Association (UTA), told Bloomberg BNA that he expects Uber and other tech companies to become a larger presence in Albany.

UTA, which represents the upstate taxi industry, was formed in 2016 to fight against the legislative agenda of ride-hailing services.

“They’ll be a presence,” he said. “It wasn’t a one-time thing. They’re still there.”

Big Spenders

The amount spent on lobbying by the tech industry is dwarfed by Albany’s traditional heavy hitters—the health care and real estate industries and education organizations.

In 2015, which is the last year in which JCOPE reported aggregate data by industry, the health care industry spent $40 million on lobbying and the real estate industry spent $32 million.

JCOPE has not released its final aggregate numbers for 2016. But for the first half of the year, Uber was the eighth largest spender at $752,974. The New York State Nurses Association topped the list for the first half of 2016 by spending $2.3 million.

Samuels said it was unlikely that tech will ever spend the kind of lobbing money in Albany that’s spent by health care, real estate, and education interests.

“I don’t think you’re ever going to see that level of spending and that level of engagement in the near future,” she said.

“They do want to really engage in civic debates and policy debates,” she said. “There’s still some hesitancy around what is often the transactional nature of politics, particularly in state governments.”

Big Money

Good government groups and opponents of the tech industry’s legislative agenda are concerned about the growing lobbying spending.

Blair Horner, executive director of the New York Public Interest Research Group, told Bloomberg BNA that the amount spent by tech companies is “eye-popping.”

“Because they have the wealth to advance their agenda, they’re able to achieve significant success,” Horner said. “But it crowds out a very congested legislative process. When you have enormous wealth, you can crowd out those other issues.”

Moreover, Horner said campaign contributions, which are more difficult to track than lobbying expenses, add significantly to the influence of “big money” in Albany.

In addition, Horner described “a whole shadow industry of political consultants” and public relations firms that are outside the scope of lobbying regulations.

Millennials

Assemblyman Kevin A. Cahill (D) was the lead sponsor of a bill that was opposed by Uber and ride-hailing companies because it would have maintained local control and regulation of the industry. He told Bloomberg BNA that an important lesson from the debate was that a generational divide emerged between millennials and others.

Millennials, who have grown up with the Internet and cell phones, were more concerned about themselves and less concerned about issues like worker rights, he said.

“I think the tech company can and will exploit that difference,” Cahill said.

Cahill said Uber’s lobbying effort was “unprecedented” because it sent mailers on a single issue to individual districts, including his own.

The mailings, moreover, were “not entirely accurate or honest,” he said. “Big money does not illuminate. Sometimes it does the opposite: it obscures.”

“It didn’t change the ultimate determination of whether it should be permitted, but it did change how it was permitted,” Cahill said.

David and Goliath

The lobbyists that have gone up against the tech companies describe a David-versus-Goliath scenario in which they compete against an army of well-paid professional lobbyists. Unlike the biblical David, however, they often lose the battle.

Ted Potrikus, president and chief executive officer of the Retail Council of New York State, has been going up against Amazon, eBay, Etsy and others in the fight by brick-and-mortar retailers to have the state collect sales taxes on online marketplaces.

He said the Legislature listened to his arguments and those of the online retailers and then made its decision against the Cuomo tax proposal.

“In my view, that’s how it’s supposed to work,” he told Bloomberg BNA. “Fair is fair. If there were anything untoward, then it would be something different.”

The Retail Council spent $203,000 on lobbying in 2016, but it was out-gunned by some of Albany’s most prestigious lobbying firms. Potrikus called them “the best in town.”

He was surprised, however, by the size of the effort. “Maybe because they learned their lesson from 2008,” he said, referring to the state’s landmark law that became known as “the Amazon tax.”

The law was among the first state laws to require online retailers to collect sales taxes.

Tomassi’s Upstate Transportation Association was also significantly out-gunned by its opponents, Uber and Lyft. The UTA spent less than $25,000 on lobbying in 2016, plus another $5,000 or so on public relations by hiring the group Marathon Strategies.

“It’s an uphill battle,” he said. “This doesn’t get you to the doors that you need to get to with that kind of limited resources.”

To contact the reporter on this story: Gerald B. Silverman in Albany, N.Y. at GSilverman@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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