When Customers Become Lobbyists

When Uber and Lyft began venturing into the larger US market more than a decade ago, they faced a major obstacle outside the safe walls of Silicon Valley: policymakers. Many lawmakers across the political spectrum were, at best, skeptical of the insurgent rideshare companies’ business model. Their fears ranged from the companies squashing more established local taxi companies to holding them accountable for accidents.

More recently, policymakers in California battled Uber and Lyft over Prop 22, a statewide ballot initiative that allows companies that hire gig workers to classify them as independent contractors, thus exempting them from paying mandated employee benefits. In that case and in others, Uber tapped its users to act as unpaid lobbyists, mobilizing them to contact policymakers to cut the red tape. Specifically, the company used in-app messaging to direct users to online petition sites that relayed to legislators support for its model in the hopes that public pressure would force lawmakers to legalize its operations.

The effectiveness of such user mobilization is the subject of new research from Lori Yue, an associate professor in the Management Division at Columbia Business School. Her findings, in a paper co-authored by Oxford University researcher Yuni Wen and UCLA professor Edward Walker, suggest that user mobilization is a double-edged sword that helps these companies achieve legalization but at the same time increases the stringency of regulations meant to protect everyday users.

During a study of user mobilization efforts spanning 2012, the year UberX launched, to 2019, Yue and her coauthors discovered the mechanisms that make user mobilization a powerful tool — with many caveats. Below are three key insights from their findings.

A New Platform for Using Users

User mobilization is not a new tactic, but the rise of digital platforms has accelerated its use, according to Yue. That is because when users sign up to use these platforms, they are required to provide their name, location, age, and other information. This allows firms to easily build customer demographic profiles in-app. Users may also find it easier to participate in mobilization efforts because a large part of the work — identifying their local representative and crafting a letter — is already done for them.

“Digital platforms enable this strategy to be much more cost efficient and influential,” Yue says. “Traditional firms have a lot of users, but these kinds of companies often do not know where their users are, who they are, or their preferences. These kinds of issues are substantially being resolved by the digital platforms.”

When Uber wanted users to support Prop 22, for example, it pushed ads through its app that encouraged users to vote yes and tap a button that would allow them to read what was “at stake.”

“For users, you do not have to find out who your legislator is and individually email them. Everything has already been prepared for you because the digital platform knows your location. In just a few clicks, you're able to send your message to your legislators,” she adds.

And it’s not just rideshare companies that employ user mobilization: Other successful digital platforms, like X (formerly Twitter), Netflix, and Reddit have urged their users to participate in public comment periods and contact lawmakers, most notably during debates over net neutrality. Recently, Tiktok mobilized its users to oppose legislation that could lead to its ban.

A Rising Tide Lifts All Ships

Regardless of industry, both companies and their customers can benefit from user mobilization tactics, as long as their priorities are aligned, according to Yue. A clear benefit is that mobilizing users can be more cost effective for firms than using paid lobbyists. Second, users are also voters, meaning mobilization can better align policymakers’ actions with the desires of their constituents. 

User mobilization can also benefit outside firms in the same or related industries. In the study, the researchers found that Uber and Lyft control approximately 90 percent of the ridesharing industry market share, though the vast majority is controlled by Uber alone. While Uber is the largest user of lobbyists and user mobilization in the rideshare industry, Lyft was a huge beneficiary of Uber’s efforts, Yue notes.

“When you influence regulation, it affects all firms within the same industry,” she says. “Firms like mobilizing collective action because the costs and benefits are likely to be shared by everyone in the industry.”

When Users Go Rogue

Users may offer a great deal of leverage when they support a company’s efforts to alter policy, but what about when users are at odds with a company? 

Yue’s study found that user mobilization also invited more stringent consumer protection regulation for a variety of reasons, with one being that legislators’ attention is drawn to all constituent issues when user mobilization is employed. User mobilization may also trigger users to go rogue and deviate from the company’s initial message.

The researchers found that states where Uber employed users to contact their local legislators were more likely to pass consumer protection regulation that could slow down short-term growth. These regulations included laws that put consumer safety at the forefront, such as requiring rideshare driver-specific registration, higher insurance requirements, and vehicle inspections.

Yue says it is critical for business leaders and consumers alike to consider the double-edged nature of user mobilization and to properly balance its drawbacks with the rewards. She notes that leaders can play a role in shaping platform development to benefit society, while consumers can play a constructive role in shaping regulation. 

“Leaders need to be really mindful of user interest alignment,” she says. “Companies can effectively utilize their users when the benefits are not only for their own interests but also for the benefit of society.”