A culture clash separates California’s Capitol from the Silicon Valley companies that are transforming the state’s economy. Technology entrepreneurs move fast, and see rewards for disrupting the status quo. In Sacramento, however, decisions unfurl slowly, with lots of pressure to keep things the way they are.
The divide is significant because the stakes are high: A bill likely to spark a big fight in the Capitol in 2016 strikes at the core of the business model for companies like Uber, the app-based service that relies on freelance drivers, rather than employees, to provide rides.
“Sacramento is often a challenging place for business interests to be successful. That certainly impacts the innovation economy,” said Carl Guardino, president of the Silicon Valley Leadership Group, a trade association that lobbies for tech companies, including Uber.
Though politicians seem fascinated by emerging companies, Guardino said he sees the need “for a bridge to be built between our state’s capital and our innovation capital, where both sides will do better in understanding each other.”
For Uber, Guardino said the bridge builder will likely be Aaron McLear, a Sacramento insider and former press secretary to Gov. Arnold Schwarzenegger. McLear is moving his young family to San Francisco in January to start a new job heading Uber’s west coast public affairs team.
McLear and Uber declined to comment on their plans, but Assemblywoman Lorena Gonzalez (D-San Diego) said she noticed that McLear “just started following me on Twitter and liking me on Facebook.”
Gonzalez has announced plans to introduce a bill that would have huge implications for Uber and other companies that use independent contractors, rather than employees, to provide services. Uber is already facing a lawsuit that claims its drivers should be classified as employees. Gonzalez’s proposal takes a different approach by allowing independent contractors to form unions and collectively bargain. The Seattle City Council in December passed a similar ordinance, becoming the first city in the country to give bargaining rights to freelance drivers.
With policy fights in cities, statehouses and courts, 2016 looms as a challenging year for Uber. McLear’s hiring comes as the company is overhauling its policy and communications department and beefing up its political prowess.
In 2014, Uber hired David Plouffe, an adviser to President Obama. In 2015, the company added former Congressman Howard Berman (D-Los Angeles) to the roster of lobbyists retained to do its bidding in Sacramento. Berman served a decade in the legislature followed by 30 years in Congress. He lost re-election in 2012, but was supported by labor unions that have clout in Sacramento.
In hiring McLear, the company gains a different kind of player, one experienced in image-building and savvy about today’s Sacramento. He knows the power dynamics in the statehouse. He has good relationships with the Capitol press corps. He’s close to business interests – including oil and health care – that are influential at the Capitol.
For a company that’s run into political challenges during its rapid growth, McLear will likely serve as “an interpreter between two different cultures who speak different languages,” Guardino said.
It won’t be his first time connecting groups with disparate ideas. McLear encouraged fellow Republicans to embrace same-sex marriage rights as a member of Young Conservatives for the Freedom to Marry. He was the lead strategist for Neel Kashkari, California’s Republican gubernatorial candidate last year, whose campaign worked to make the GOP appealing to immigrants and young people. And despite a resume long on Republican politics, McLear ran an independent campaign — funded largely by tech moguls Ron Conway and Sean Parker — that helped elect Democrat Ed Lee as San Francisco mayor in 2011.
McLear, however, will face challenges as he works to bridge tech and politics in California. He is a Republican in a state dominated by Democrats. He is distant from organized labor. And because of term limits, many of today’s legislators were elected after McLear left the governor’s office at the end of 2010.
Gonzalez, who was elected in 2013, said the evolution toward an economy with millions of workers who don’t get the benefits of being an employee – such as minimum wage or workers compensation if they’re injured on the job – will burden California’s safety net. She wants independent contractors to be able to bargain together, even if they’re not employees.
“I’m trying to go to the heart of the issue, to spark a discussion,” Gonzalez said. “Let’s catch up with what the economy has done so everyone can be protected, most of all taxpayers.”
Labor unions are lukewarm on the proposal so far. While they like the idea of giving Uber drivers the right to organize, they’re concerned that the bill could cement their status as freelancers.
“We’re still of the position that they are employees of the company,” said Steve Smith, spokesman for the California Labor Federation.
Unions are developing legislation for 2016 that would regulate “the wild, wild west that’s going on with this gig economy,” Smith said.
“Uber to us is a symptom of something bigger: The flow away from the traditional employee-employer relationship to something that is more insecure.”
Coming soon: A counter-message from Aaron McLear.