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: Uber, Lyft face shareholder push to disclose how much they are spending in fight for new labor laws

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For the second year in a row, investors in Uber Technologies Inc. will vote Monday on a shareholder proposal calling for more transparency into its lobbying, and Lyft Inc. shareholders will face the same question next month.

As the two companies continue to try to change labor laws in an effort to preserve their business model that relies on treating gig workers as independent contractors, the International Brotherhood of Teamsters say Uber
UBER,
-2.83%

and Lyft
LYFT,
-6.90%

do not provide adequate disclosure about their lobbying activities.

In the union’s engagement with the companies on this issue, Michael Pryce-Jones, senior governance analyst for the Teamsters, told MarketWatch: “Both companies clam up when you start asking about the funding of supposed independent worker coalitions pushing Prop.-22 like legislation; clearly, they have something to hide.”

Gig companies led by Uber and Lyft put Proposition 22 on the California ballot in 2020, spending a record amount of more than $200 million on the measure. It was approved by 58% of voters, allowing gig companies to avoid a state law that would have required them to classify gig workers as employees. Prop. 22 is now up in the air after a judge threw it out, but gig companies are trying to expand the model elsewhere, saying most ride-hailing drivers and delivery workers prefer to be independent contractors.

In a statement to MarketWatch, Teamsters General President Sean O’Brien said: “Gig companies are  pushing an agenda designed to rob workers.”

This is the second year in a row the Teamsters have put their proposal before investors in both companies. Last year, 31% of shareholders voted for the proposal at Uber and 40% voted for the proposal at Lyft.

Asked whether the Teamsters expect a higher percentage of yes votes this year, Pryce-Jones said it is baffling why “a responsible investor wouldn’t want to know how much Uber or Lyft were spending to continue to exploit employment loopholes — it goes to the core question of long-run profitability.”

See: The app-based economy could see key changes in 2022

In a letter to Uber shareholders in April, the Teamsters called their proposal “an urgent request given Uber’s efforts to exploit loopholes in existing regulation and the vulnerability of this strategy to legislative, regulatory or court challenges.”

The Teamsters are asking both companies for an annual report with details that go beyond the required state and federal government filings about their lobbying activities, such as recipients and payment amounts related to indirect lobbying efforts and their memberships in organizations that engage in legislative work. The boards of Uber and Lyft recommend no votes on the proposals, saying the companies already disclose enough information about their lobbying activities and policies in filings and on their websites.

“It is important that Uber advocates on behalf of the Company and its stakeholders — including those that use the platform to earn — as we reimagine the way the world moves for the better,” Uber’s board writes.

Lyft’s board writes: “Additional disclosure might put Lyft at a competitive disadvantage by revealing new business strategies and priorities to competitors or others working on the other side of our issues or against the interests of our community.”

As they did last year, the two most prominent and influential proxy advisory services in the nation, Institutional Shareholder Services and Glass Lewis, are recommending a yes vote on the proposal at Uber’s annual general meeting on Monday.

ISS said in its proxy research report that “the company lacks comprehensive
disclosure of its lobbying activities and expenditures, and its political activity policy provides little information about management and oversight of lobbying expenditures.”

In its report, Glass Lewis said disclosure of indirect contributions is “essential to determining the effectiveness of the organizations in representing the Company’s and its shareholders’ interests.”

ISS and Glass Lewis also recommended yes votes on the proposal at Lyft last year, though they have not yet published their proxy research reports on the company this year. Lyft’s meeting is scheduled for June 16.

For more: In record-breaking $200 million fight to preserve the gig economy, messaging doesn’t always need money

Need to Know: ‘Drive down the middle of the road.’ How this fund manager advises investors navigate a tough investing climate right now.

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