Uber and Lyft May Have a Hard Time Finding Its Way in Washington: Here's Why

For ride-sharing giants like Uber and Lyft, navigating through Washington's corridors of power will be extremely difficult. Apart from persistent opposition from a number of progressives against the creative disruption in transportation, the two companies will also be having a tough time dealing with a liberal firebrand, Democratic Senator Elizabeth Warren.

The 'sharing economic model' has not yet caught on with the majority of Americans more so with Capitol Hill veterans in Washington who legislate a plethora of nationwide economic regulations.

Senator Warren, a well-known staunch Washington critic against quasi-freelance gig-oriented firms like Uber and Lyft accused them of being destabilizers of US economic security particularly the vulnerable working class who are sharing the use of their private cars for a fee. She added that the benefits of the ride-sharing business model is overrated.

"The much-touted virtues of flexibility, independence and creativity offered by gig work might be true for some workers under some conditions," Sen. Warren said in a speech in Washington on as quoted by Financial Times.

"[But] for many, the gig economy is simply the next step in a losing effort to build some economic security in a world where all the benefits are floating to the top 10 per cent."

Her hostility is not a good sign for app-based companies and startups that depend mostly on contract-based work arrangement to stay afloat. These firms are also lobbying their way into halls of Congress in the hope of defending their position in the economy amid controversies over inadequate consumer protection and security for workers.

The political timing is quite bad considering that frontrunners on both sides of the political spectrum (presumptive Republican nominee Donald Trump and Democratic candidate Hillary Clinton) are both blaming America's corporate entities for many of middle class' maladies.

"Their business model is, in part, dependent on extremely low wages for drivers," said the outspoken liberal as quoted by the Washington Examiner.

Meanwhile, a recent study by the Pew Research Center reveals that Americans are increasingly getting familiar with 'sharing economy' services offered by companies like Uber and Lyft for ride-sharing and Airbnb and HomeAway for lodging. In a survey of 4,787 Americans, Pew found a 72 % rise in total percentage use of these app-based companies for services that include errand applications, grocery delivery, carpooling, ride-sharing, lodging, and so on. The study revealed 15% of Americans have used a ride-hailing services while 11% have made online reservations for services like Airbnb or HomeAway.

"The sharing economy has been the subject of much ongoing debate, but these services are impacting consumers to widely varying degrees," said Pew researcher Aaron Smith as quoted in a report by DNA.