Uber and Lyft cheered President-elect Donald Trump’s Department of Transportation pick, Elaine Chao, after her nomination today.
"Ms. Chao's knowledge of transportation issues is extensive and we look forward to working closely with her,” Niki Christoff, head of federal affairs at Uber, said in a statement.
Lyft spokesman Adrian Durbin said the company looks forward to working with Chao and has the “utmost respect” for her.
The admiration is mutual. As recently as November 2015, Chao expressed general support for ride-hail — and skepticism of regulation thereof — arguing in a speech to the American Action Forum panel that “at a minimum, government policies must not stifle the innovation that has made this sector such an explosive driver of job growth and opportunity.”
Chao was deputy secretary of the DOT under President George H.W. Bush and labor secretary under the second Bush. She is married to Senate Majority Leader Mitch McConnell, a connection that could help as Trump looks to push forward an ambitious infrastructure plan. Her nomination comes at a time when the transportation industry faces a crucial turning point: Cash-strapped local agencies across the US are outsourcing public transit to private companies, and the tech and auto industries are racing to put self-driving cars and trucks on the road, threatening millions of jobs.
Local governments with strained budgets are increasingly subsidizing Uber and Lyft rides for their residents as an alternative to adding bus routes and building parking structures. In August, DOT Secretary Anthony Foxx told BuzzFeed News he expects public transportation to continue to be outsourced to private companies.
But Uber and Lyft, which employ their drivers as independent contractors, are also facing legal battles in courts across the country with drivers who say they should receive benefits such as reimbursement for expenses.
On Tuesday, the same day President-elect Trump announced Chao’s nomination, Uber drivers joined nationwide protests for $15 minimum wages. BuzzFeed News reported in June that Uber drivers in three major US markets — Denver, Detroit, and Houston — earned less than $13.25 an hour after expenses in late 2015.
A report by the Government Accountability Office, a watchdog agency, found in 2008 that Chao’s labor department “inadequately investigated complaints from low-wage and minimum wage workers alleging that employers failed to pay the federal minimum wage, required overtime, and failed to issue a last paycheck.”
In a statement today, Jim Conigliaro Jr., founder of the Independent Drivers Guild, which represents over 45,000 Uber drivers in New York City, said, "As Labor Secretary, Chao failed to stand up for workers and safety.”
“At a time when the transportation industry is being transformed by companies like Uber that want to put driverless vehicles on our roads, we need leadership that puts safety first,” Conigliaro said. “Chao's hands-off approach could be dangerous for America's roads."
Chao’s administration will also likely have a heavy hand in determining the regulation of autonomous vehicles. The agency released guidelines for self-driving vehicles in September. It may fall to the next transportation department to finalize those rules. Where Chao stands on self-driving vehicles is unclear, but her department’s actions could influence the livelihoods of millions of truck and ride-hail drivers.
In October, Otto, the self-driving truck company owned by Uber, demonstrated its first delivery for Anheuser-Busch.
Chris Spear, president and CEO of the American Trucking Associations, the largest trade group for that industry, said in a statement that Trump “could not have picked a more qualified, experienced and dedicated individual to serve in this important role.”
“I had the privilege of serving with and working closely with Secretary Chao during my time at the Department of Labor, and I am extremely pleased that she will be taking on this new challenge,” Spear said.