The Same Bill, Drafted by Uber, Submitted to Knesset Three Times

The bill sought to regulate the company’s operations in Israel and was last submitted to the Israeli parliament for approval eight months ago. It was tabled by Knesset members from several different parties. A Shomrim investigation

The bill sought to regulate the company’s operations in Israel and was last submitted to the Israeli parliament for approval eight months ago. It was tabled by Knesset members from several different parties. A Shomrim investigation

The bill sought to regulate the company’s operations in Israel and was last submitted to the Israeli parliament for approval eight months ago. It was tabled by Knesset members from several different parties. A Shomrim investigation

Uri Blau

The Knesset. Photo: Shutterstock

July 10, 2022

Summary

T

he massive leak from Uber reveals that proposed legislation, which was drafted by the rideshare company itself and which would have regulated its operations in Israel, was submitted no fewer than three times for Knesset approval – with each version of the bill almost identical to the previous one. The bill was submitted by Knesset members from several parties for the last time in October 2021. It was recently reported in financial newspapers that Uber is again preparing to enter the Israeli market after its previous efforts failed.

This insight into the company’s global business practices is based on a massive leak of its documents – 124,000 in total – obtained by British newspaper The Guardian and referred to as The Uber Files. The Guardian shared this leak, covering a period from 2014 to 2107, with the International Consortium of Investigative Journalists (ICIJ) and, through that organization, 180 journalists from 44 media outlets worldwide, including the Washington Post, Paris-based La Monde, and the BBC. Shomrim, through journalist Uri Blau, is the Israeli representative on the project.

Among the revelations contained in the leak is that in various countries, including France, the Netherlands, Belgium, India, Romania, and Hungary, Uber operated a mechanism known as the “kill switch,” which allowed it immediately to delete any information that could be of interest to local authorities and regulators. As part of its efforts to get a foothold in Russia, the company made deals with oligarchs closely associated with Russian President Vladimir Putin, despite warnings from within the company. In France, the leak exposes the close relations and tight coordination with then-Minister of Economy, Industry and Digital Affairs Emmanuel Macron in their joint struggle against local taxi drivers. On the Israeli front, the leak reveals Uber’s efforts to penetrate the local market and the expansive network of connections, pressure and lobbying in which it engaged.

Uber currently operates in over 20,000 cities in 72 countries and some 120 million people use its services. In a considerable number of locations where it operates, Uber, by employing aggressive business practices, brought about a decline in the use of traditional taxi services and, in some cases, their disappearance entirely. Last week, it was reported in financial newspapers that Uber is trying once again to enter the Israeli market following failed attempts in the past – attempts that are detailed in this leak.

The Uber Files. Illustration: Rocco Fazzari-ICIJ

Recycled legislation

Uber started to promote the legislation that it drafted just months after opening its first office in Israel in mid-2014. In an email to colleagues, Uber Israel’s CEO Yoni Greifman wrote that he was skeptical that the bill would become law, but the idea was to put pressure on the transportation minister to change the existing legislation. He attached an English translation of the bill to the email, which would eventually be presented to the Knesset with only cosmetic changes. Greifman also wrote that the legislation is important for Uber because it could potentially be the foundation for future regulatory changes and discussions in the media. He added that Knesset members would almost certainly make changes to the bill before signing off on it but that he wanted to be on the same page with regard to the starting point.

Shortly thereafter, in November 2014, Greifman sent his colleagues a jubilant email along with screenshot of a Hebrew document, the headline of which was “Private Member’s Bill: Amendment to the Transportation Regulations (Promoting transportation via online ridesharing services).” After translating the headline for his colleagues, Greifman went on to explain that the document was proposed legislation – drafted by Uber – promoting ridesharing in Israel. Not sparing the exclamation marks, he added that six Knesset members from different parties had signed the bill and that the company hoped that more would add their names. He promised that the two main signatories of the bill would make a public statement the next week and ended up describing the bill as a huge victory and an excellent start for the company’s campaign.

The bill was submitted for the first time by former MK Moshe Feiglin (Likud). In a conversation with Shomrim, Feiglin insisted he does “not remember who helped draft that particular bill, but the important thing is that I completely stand behind it. Online ridesharing services are one of the simplest solutions for Israel’s dire transportation problem.”

Feiglin’s bill did not make it onto the law books, but an examination of the Knesset archive shows that it was submitted once again in 2016 – this time signed by, among others, MK Amir Ohana (Likud), Bezalel Smotrich (Religious Zionism), Robert Ilatov (Yisrael Beiteinu), Yoav Ben-Tzur (Shas), Meirav Ben-Ari (Yesh Atid), Uri Maklev (United Torah Judaism), Miki Zohar (Likud), and Yehuda Glick (Likud). This time, too, the bill was not approved – but toward the end of 2021, it was submitted for the third time. This time, it was tabled by MKs Eitan Ginzburg (Blue and White), Yorai Lahav Hertzanu (Yesh Atid), Idit Silman (Yemina) and Nir Orbach (Yemina).

The explanatory notes accompanying the proposed legislation sound like they were lifted directly from Uber’s talking points – and for good reason. “The goal of this legislation is to reduce the price of public transportation in Israel, to reduce congestion, air pollution and the problems with parking and traffic jams; to expand the range of transportation and transit options available to the Israeli public, to make rideshares more accessible and to increase competition in the field while providing a convenient and innovative source of income for Israeli citizens. This can be done by legislating for the operation of online rideshare services and creating a wide range of suitable compensation for taxi owners (…) The rideshare model has been successfully implemented in more than 400 cities across the world and can be expected to be of great benefit to the Israeli economy and society.”

It is worth noting that recycling legislation is commonplace in the Knesset. A Shomrim investigation revealed that parliamentarians are not always aware of the origin of the bill they are resubmitting.

Former transportation minister Yisrael Katz. Photo: Reuters
Senior officials took a close interest in the outcome of the 2015 Knesset election. They expressed the hope that Yisrael Katz, who opposed Uber’s entry into the Israeli market when he was transportation minister, would no longer hold that position

All this and lobbyists too

The leaked emails accurately reflect the prevalent view within Uber that politics would decide the company’s future in Israel. Senior officials took a close interest in the outcome of the 2015 Knesset election. They expressed the hope that Yisrael Katz, who opposed Uber’s entry into the Israeli market when he was transportation minister, would no longer hold that position. They also met with a representative of the Israel Tax Authority to explore the tax ramifications of the company engaging drivers in Israel – an issue over which it had been criticized bitterly overseas – and were in contact with several Knesset members, including Boaz Toporovsky, who is now chair of the Yesh Atid Knesset faction. Uber hoped that Toporovsky would spearhead the campaign to legalize ridesharing services and he, for his part, asked for material that would help him persuade his party chairman, Yair Lapid, who was finance minister at the time, to support the move. Among the questions he asked was how much it would cost to compensate taxi drivers if Uber were allowed into the Israeli market. At the same time, the company hired the services of Gilad Lobbying at the cost of $6,000 a month, as well as a public relations firm for the same price.

But all of Uber’s efforts were dashed by the vehement opposition of former transportation minister Yisrael Katz. Another obstacle, no less problematic, was created by a 2017 ruling by Eitan Orenstein, the president of the Tel Aviv District Court, who issued an order preventing Uber from offering transportation services using private drivers. The company continued to operate its mobile application in Israel, allowing users to order standard taxis. This service was primarily aimed at tourists, who were already familiar with Uber, and which had almost no impact on the Israeli taxi market. As stated, it was recently reported that Uber is once again planning to try and enter the Israeli market.

MK Boaz Toporovsky. Photo: Noam Moshkovitz, The Knesset
Uber hoped that Toporovsky would spearhead the campaign to legalize ridesharing services and he, for his part, asked for material that would help him persuade his party chairman, Yair Lapid, who was finance minister at the time, to support the move

Coalition whip, MK Boaz Toporovsky, in response: “Throughout my career in politics, I have seen and I continue to see the battle against the high death toll on Israel’s roads as my public mission. From the arsenal of solutions, the two most effective ways of reducing the number of accidents on the road and saving lives are reducing the number of vehicles on the road and promoting public and shared transportation. Ever since Uber considered coming to Israel, I saw it as a company that would reflect the ideal solution as I see it by reducing the number of vehicles, introducing ridesharing and increasing competition in the field of transportation as part of an overall effort to reduce the cost of living in Israel. All of my involvement in this matter has been solely to advance these interests, and I have done so with full transparency and efficiency for the citizens of Israel.”

Greifman told Shomrim, "I have no idea where you’re getting this information. I have no idea what you are talking about in most of these cases.”

Uber’s Israeli representatives were asked a series of detailed questions, but the company opted to respond with a general statement that is designed to be published by all the media outlets involved in the Uber Files project. Jill Hazelbaker, a spokeswoman for Uber, acknowledged “mistakes” and “missteps” that culminated five years ago in “one of the most infamous reckonings in the history of corporate America.”

She said Uber completely changed how it operates in 2017 after facing high-profile lawsuits and government investigations that led to the ouster of Kalanick and other senior executives. “When we say Uber is a different company today, we mean it literally: 90 percent of current Uber employees joined after Dara [Khosrowshahi] became CEO” in 2017, Hazelbaker said in a written statement. “We have not and will not make excuses for past behavior that is clearly not in line with our present values.”

She said that Uber has not used a kill switch to thwart regulatory actions since 2017 and that “no one at Uber has ever been happy about violence against a driver."  The company dismissed any suggestion that it received special treatment from Macron or his cabinet and emphasized that no one who works at Uber today was involved in building relationships with Russian oligarchs.

This is a summary of shomrim's story published in Hebrew.
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