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Uber: The future of the economy - and American politics

Hillary Clinton talks about shared economy companies during her economic speech at a New York City campaign event.
Hillary Clinton talks about shared economy companies during her economic speech at a New York City campaign event. AP

It is everything Republicans want to tout in the American economy, and so much of what Democrats fear.

It’s Uber.

The nation is engaged in an evolving debate about the role of app-based companies that are upending age-old ways of doing business. How deeply should government get involved? How should workers be treated? Are 20th century laws designed to protect employees antiquated in this new “sharing economy?”

To Republicans, the boom in app-based services is welcome, unbridled free market competition, a long-overdue way for hard-working individuals to prosper without government holding them back.

Driving the point, Jeb Bush plans to use Uber, the booming ride-on-request service, this week when he visits San Francisco to talk about technology issues. He’s in tune with his party; the Republican National Committee is circulating a petition where people can show their support for Uber.

To Democrats, consumers are navigating a marketplace without important government protections for riders and workers, and everyone except the big money-makers stands to be hurt.

We must stand up for our free market principles, entrepreneurial spirit and economic freedom

Republican National Committee petition urging support for Uber

In an economic speech Monday, Hillary Clinton discussed the “sharing” economy, citing how many people earn money designing websites, selling their own products or “even driving their own car.”

While she called the innovations exciting, Clinton vowed, “I will crack down on bosses who exploit employees by mis-classifying them as contractors or even steal their wages.”

RELATED: Uber should be suspended in California and fined $7.3 million, judge says

The fight is on.

“This is a classic big government versus small government debate,” said Darrell West, vice president and director of governance studies at Washington’s Brookings Institution, a research group.

In the recent past, the two major parties have fought over how to deal with e-commerce, “soccer moms,” the underclass or, the “forgotten” white middle class male.

Now, the sharing economy debate puts twists on some traditional themes.

Drivers use the Uber app to provide over 1 million rides around the world each day

One is the government-business relationship. Republicans have long railed against difficult-to-fathom government regulations, rules they say stifle innovation and expansion.

Taxis and their drivers have long been subject to strict regulation. Throughout the nation, governments have been trying to hold Uber and similar services to tough standards, and often succeed. To Republicans, those standards often go too far.

“Across the country, taxi unions and liberal government bureaucrats are setting up roadblocks, issuing strangling regulations and implementing unnecessary red tape to block Uber from doing business in their cities,” says the Republican Party petition.

Democrats see hypocrisy. Bush, said party spokeswoman Holly Shulman, is happy to support the free market only when it suits his philosophy.

“Here’s a quick update for Governor Bush: Obamacare has been huge for folks working in the innovation and sharing economy. Bush wants to repeal it,” she said.

The fate of employees is the other big debate. Clinton is trying to satisfy two important traditionally Democratic constituencies: Labor unions and liberals.

Since most drivers are considered independent contractors, “sharing economy” companies often do not provide certain benefits.

New economy gurus argue that 20th century wage and hour laws no longer apply to individuals who want to be their own bosses and want to work at their own pace. Uber and some ride providers are now in a legal dispute over whether drivers are employees.

Clinton wants them protected. “Fair pay and fair scheduling, paid family leave and earned sick days, child care are essential to our competitiveness and growth,” she said Monday, without naming a specific company, “and we can do this in a way that doesn’t impose unfair burdens on business.”

Uber had no comment on her remarks.

58Number of countries where Uber operates

Republicans have different political needs. Not only do the startups mesh with their conservative philosophy, but championing the world’s Ubers gives them an important entree into the world of high tech, making them look hip and in touch. For some time, they’ve used Uber as the symbol of what an ambitious, unshackled entrepreneur can do.

“Unsurprisingly, that free-market competition has meant happier customers,” wrote Republican Party Chairman Reince Priebus last year in a Chicago Tribune op-ed.

At presidential forums, Republican presidential candidates have picked up the beat. Sen. Ted Cruz, R-Texas, in February compared himself to Uber, saying he wanted to “bring a disruptive app to politics.”

After Clinton’s speech Monday, Republicans quickly pounced. “@HillaryClinton’s ideas about Uber and Lyft are out of touch. We need more innovation, not less,” tweeted Sen. Rand Paul, R-Ky. Republicans gleefully note that David Plouffe, former campaign manager and White House adviser to President Barack Obama, is a top Uber executive.

Clinton herself may understand that the shared economy is highly popular – Tuesday, Jake Sullivan, Clinton senior policy adviser, told a Christian Science Monitor breakfast she wasn’t simply bashing the start-ups.

What she really wants, and is going to get, is to “start a very serious conversation about this important and growing part of our economy,” he said.

David Lightman: 202-383-6101, @lightmandavid

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