This month, former Uber lobbyist Mark MacGann revealed over 124,000 documents of extensive notes and messages between world leaders and Uber executives around the world, which laid the foundation to Uber’s rapid success. The Uber Files illustrate the importance of connections with government officials and politicians, who accounted for 1,348 people of the 1,869 people who were listed as potential connections for influence. By strategically targeting powerful individuals with government connections to expand their business, Uber used elite influence to trump public preferences and to escape punishments when the company broke the law. These benefits, however, came at the expense of democracy.
Elite connections in various countries, including Russia and France, provided Uber the leverage to expand operations throughout the world even if against public preferences. For example, in Russia, Uber partnered with lobbyist and senior pro-business party member Vladimir Senin, who influenced the writing of taxi laws with members of parliament, and with CEO of Sberbank (Russia’s largest bank) Herman Gref, who encouraged the mayor of Moscow to promote Uber by providing riders with bank card incentives. However, Russian taxi drivers decried Uber’s partnership with Sberbank, leading the taxi union to list out their grievances, including Uber’s illegality. Similarly, in France, Emmanuel Macron (then-Prime Minister) cooperated with Uber and permitted it to run, which inflamed mass violent protest against the company in Marseille in 2015 to the point that the police banned Uber in areas of France. When the company asked Macron about why the police banned UberX, Macron reversed the ban in one day. In both countries, Uber sought out highly influential political figures and intentionally took advantage of those connections to boost the company’s growth. The sheer quantity of people mobilized against Uber in Russia and France demonstrate the strong opposition to Uber. The fact that both the Russian and French governments overrode the opposition indicates the disproportionate voice Uber had through elite connections, which undermined the basic democratic principle of majority representation.
Uber’s connections with high-ranking government officials in various countries helped the company even more when they seemingly broke laws. According to former Uber CEO Travis Kalanick, the business operated on the push without forgiveness model when it came to expanding operations worldwide. Uber regularly pushed the bounds of what was legal that threatened rule of law when entering foreign markets. For instance, the US Foreign Corrupt Practices Act prohibits US businesses from paying foreign political officials to influence policy. A study by Tor Krever examined the FCPA’s efficacy, which found that evidence of the FCPA’s discouraging effect on bribery is lacking due to the secrecy of bribery in the first place. Companies, including Uber, developed subtle ways to hide bribery. For example, McGann, after leaving Uber, helped fundraise for Macron’s 2016 campaign. Although McGann claims that his decision was apolitical, this seems difficult to believe given the correspondence between him and Macron that gave Uber great influence over France’s taxi laws. As a result, it seems the fundraising may have been a gift for being at Macron’s aid. By paying and swaying foreign officials, Uber avoided punishment in instances like this, where they may have violated the law.
Similarly in Russia, Uber paid Senin for his work, which not only included lobbying but direct influence on the writing of taxi legislation as a senior member of a pro-business political party. Furthermore, a memo at Uber clearly states the company’s intentions to use their Russian connections for political reasons by saying that, with support from people like Senin and Gref, the company has “a direct line into the Kremlin.” Despite Uber violating the FCPA by paying Senin with the intention of influencing politics, the company did not face legal repercussions for this violation. Although this payment to Senin never led to an investigation or even an accusation by the Department of Justice, Uber may have avoided trouble with the law by strictly labeling their interactions with Senin as purely for lobbying work or as a necessary “grease” payment, which does not violate the FCPA. However, by testing the very edges of the law, Uber undermined the spirit of the rule of law.
Uber historically used various means of circumventing the law, but the recent leaks revealed another well-kept secret tool that the company frequently reused to cut connections to Uber servers called the “kill switch.” In 2014, the General Directorate for Competition Policy, Consumer Affair and Fraud Control (DGCCRF) arrived at the Uber HQ in France, fueled in part by the increasingly upset domestic taxi industry, skeptical of the company’s legality. Due to a previous raid, Uber prepared for this raid, which prompted former Uber legal director Zac de Kievit to order an IT engineer to “kill access” to the company’s servers. McGann, in a later raid, made the company’s unethical intentions explicit by saying how the company used the kill switch “so the police won’t be able to get much if anything.” Pairing the kill switch’s truth-concealing function and purpose leads to questions regarding the potential obstruction of justice. Uber undermined the rule of law by hiding important information from law enforcement and regulators, which prevented them from properly and efficiently carrying out their duties to uphold the taxi laws.
According to Acemoglu and Robinson in their book Economic Origins of Dictatorships and Democracy, globalization can aid with the emergence and consolidation of democracy by increasing the cost of disrupting the economy and by creating expectations of harsher reactions to authoritarian actions from international democracies. This argument seems to have held true thus far with the Russia’s invasion in Ukraine, which has prompted many businesses to fully cease or retract operations from Russia, including Uber.
Acemoglu and Robinson also argue that the increased international trade that results from globalization makes repressive decisions more likely to negatively impact the economy because when citizens mobilize against them that threatens the economy, which costs elites. However, Uber’s actions show that international companies may make choices that actively hurt democracy and rule of law. As a result, globalization does not always have positive outcomes.
The Uber Files reveal the influence of elite political connections behind the scenes that assist companies in acquiring the support they need to grow as fast as possible and avoid legal issues even if breaking the law. Although this essay only covers Uber’s corrupt involvement in Russia and France, the company had plenty of political connections in the US, Israel, and the Netherlands that gave Uber a powerful hold and ability to rapidly expand through illegal influence of taxi legislation and reversal of legislation that impedes Uber’s growth. However, companies with superior resources have abused high-level political connections for a long time. In 2019, for example, the SEC charged Walmart for violating the FCPA by not making sure that intermediaries were not paying officials in multiple countries like China and Brazil. These companies only represent a few examples of corruption within businesses in a struggle for influence and money, in which there may be many more companies that utilize corrupt business practices and political connections that could lead to the erosion of democracy.