Lyft money saved a California climate measure. It could kill it too.

The battle over California Proposition 30 is blurring tech’s battle lines.

Signage at a Lyft driver and vehicle center in San Francisco, California, U.S., on Thursday, Feb. 3, 2022. Lyft Inc. is scheduled to release earnings figures on February 8. Photographer: David Paul Morris/Bloomberg via Getty Images

Each side accuses the other of putting moneyed interests before the best interests of the state.

Photo: David Paul Morris/Bloomberg via Getty Images

In the fall of 2021, Stuart Cohen and Denny Zane had pretty much given up.

The two California public transit advocates had spent about a year trying to raise money for a state ballot measure that would subsidize electric vehicles and wildfire prevention by raising taxes on California’s millionaires. They’d held a series of symposiums with environmentalists and scientists, who helped shape the idea. And they’d approached Meta, Uber, and “all the biggest tech companies in the Bay Area, except for Apple,” Cohen said, to see if they might throw money behind the effort.

Nobody bit, and by September 2021, they still hadn’t raised the millions of dollars they would need to start collecting signatures. “We mostly left it for dead,” Cohen said.

But the measure, now known as Proposition 30 on the Nov. 8 ballot, didn’t die. It was rescued by Lyft, which went on to spend more than $45 million on the Prop. 30 campaign and now stands as by far its biggest backer — and its biggest liability.

Over the last two months, the fight over Prop. 30 has gotten ugly, with opponents — including California Gov. Gavin Newsom himself — casting the measure as a self-serving plot “devised” by Lyft and writing off the early work of public interest groups almost entirely. “When Newsom came out, I jumped back in,” Cohen said. “I wanted to help have the truth be told.”

That a ballot proposition to raise taxes in an already high tax state would lead to mudslinging was predictable. But the battle lines of the fight have been anything but. The measure has divided the tech industry’s allegiances and has put Newsom on the opposite side of the California Democratic party and many of his allies. In this bizarro world, Newsom and the teachers’ union have teamed up with business groups like the Chamber of Commerce and a whole bunch of billionaires to oppose what they deem to be a corporate carve-out, while environmentalists, labor unions and public interest groups are lining up to defend Lyft’s huge political spending. Uber, which is often aligned with Lyft politically and stands to benefit from the measure just as much as Lyft would, has stayed out of the fight altogether.

Each side accuses the other of putting moneyed interests before the best interests of the state. The No campaign — backed by the likes of Netflix’s Reed Hastings and Sequoia’s Michael Moritz — has cast Prop. 30 as a maneuver to help Lyft make the switch to EVs before a government mandated deadline in 2030. “There’s just zero possibility that it would be on the ballot without Lyft,” Dan Newman, a strategist for Newsom and the No campaign, told Protocol.

On the other side, supporters of Prop. 30 accuse Newsom of spreading misinformation about the measure’s origins and opposing it to appease his biggest donors and to prime the pump for a potential presidential run. “When he says Prop. 30 was devised by a single corporation, I know that’s not true,” said Max Baumhefner, a senior attorney with the Natural Resources Defense Council. “I was one of the people who helped write it, amongst many.”

When he says Prop. 30 was devised by a single corporation, I know that’s not true.

So far, it seems the No campaign’s anti-tech strategy is working. Since Newsom cut an ad in September calling Prop. 30 a “Trojan Horse” for Lyft, support for the measure has fallen precipitously from 63% in July to 41% in a poll released this week. “People have believed it,” Cohen said of the opposition’s talking points. “That’s why I got reengaged to tell the origin story, but it was a little late.”

Carrots and sticks

When Cohen and Zane walked away from what would become Prop. 30 in the fall of 2021, they left it in the hands of Nick Josefowitz, chief policy officer of the transit advocacy group SPUR, who had been working with them to develop the measure. Josefowitz, who happens to be married to Lyft’s former vice president of product, is connected to Lyft CEO Logan Green through a mutual friend. In September of 2021, with other options exhausted, Josefowitz gave Green a call to see if Lyft might contribute. It wasn’t an immediate yes, but Josefowitz said Green was excited by Prop. 30’s potential environmental impact.

Of course, there was also a huge upside for Lyft. Months before, California had adopted its new Clean Miles Standard, which requires rideshare companies throughout California to ensure that by 2030, electric vehicles account for 90% of their vehicle miles traveled. That means rideshare companies will have to find ways to entice their drivers to go electric. Lyft had pushed to get the California Air Resources Board to create new EV incentives to go along with the standard. But ultimately, in comments to the board, Lyft said regulators wound up offering only “metaphorical sticks with no carrots.”

Then along came Prop. 30, which is effectively a carrot patch. The measure would raise taxes by 1.75% on about 35,000 Californians whose annual income is over $2 million, and it would use the majority of the money to offer rebates for new EV purchases and to invest in charging infrastructure. The measure places a special emphasis on people from disadvantaged communities in order to subsidize EVs for people who couldn’t otherwise afford them. That includes lots of Lyft drivers.

Josefowitz said he and Lyft’s leaders continued their conversations over the following months, and by January, Lyft made its first of many contributions to the campaign. “I don’t think we ever really knew how much Lyft was planning on investing,” Josefowitz said. “We took it one step at a time.”

Lyft declined to comment for this story and directed Protocol to a corporate blog post by Green, in which he wrote in underlined text: “Not a single dollar of Proposition 30 is earmarked for Lyft or the Ridesharing industry as a whole. Ridesharing drivers will be eligible just like ALL Californians, but they won’t receive any type of priority or preference.”

Lyft’s lawyers and policy experts were at the table in the fall of 2021 when the measure was being drafted, but so were environmental groups like NRDC, Coalition for Clean Air, and California Environmental Voters. “If Prop. 30 was what the billionaires funding the opposition are claiming it is, then we wouldn’t have supported it,” Baumhefner said, emphasizing that Lyft drivers constitute a tiny fraction of all of the Californians who stand to benefit from the measure. By the state of California’s own estimates, rideshare companies like Lyft and Uber combined account for only about 1.25% of annual vehicle miles traveled.

Lyft’s critics point to a provision in the measure that says people who drive “more than 25,000 miles per year on average” should be prioritized for rebates as evidence of Lyft’s imprint on Prop. 30. But Baumhefner argues it’s a common sense requirement if the ultimate goal is reducing emissions. “It makes sense to go after vehicles that drive a lot,” he said.

For a while, things were looking up for the Yes campaign. The measure received unanimous support at the California Democrats’ executive board meeting in July, and the campaign, which had been keeping the governor’s office apprised of its work, was holding out hope Newsom would back the measure. “It felt like it was just the kind of thing we could get a climate champion, progressive Democrat like Gov. Newsom really excited about,” Josefowitz said.

‘A cynical scheme’

Then, in July, when the measure qualified for the ballot and donations began flowing into the No campaign, everything changed. That month, Newsom published a press release formally opposing the measure, along with the California Teachers Association, which dislikes that the measure fails to guarantee any funding for schools. Newsom cast the measure as a “special interest carve-out — a cynical scheme devised by a single corporation to funnel state income tax revenue to their company.”

Newsom’s public resistance to Prop. 30 only grew from there. In mid-September, he appeared in a statewide TV ad opposing Prop. 30, doubling down on the message and dealing a major blow to the Yes campaign. The ad came in the midst of a much broader tech crackdown by Newsom, who once enjoyed a cozy relationship with the industry.

At the same time, Newsom was just days away from signing an audacious $54 billion climate action plan into law, legislation that proves “there’s a much better, more thoughtful way” to invest in the climate, Newman said. “We all agree that we must do more to fight climate change,” he said. “The question is: Can we do it without raising taxes and letting one corporation push their own public policy?”

But if Lyft’s contributions to the Yes campaign have stoked speculation about Prop. 30’s hidden agenda, the No campaign’s lengthy list of billionaire backers has similarly raised questions about Newsom’s motives.

Campaign finance records show Newsom has raised millions of dollars from people who have also thrown their money behind the No campaign. Hastings, who spent $1 million fighting Prop. 30, also contributed $3 million to help Newsom battle a recall last year and has continued donating to the governor’s reelection campaign this year. Zynga founder Mark Pincus has spent nearly half a million on the No campaign and is also supporting Newsom’s gubernatorial race. Other No campaign backers who have contributed to Newsom’s reelection include Sierra Pacific Industries, Gap heirs William and Robert Fisher and Democratic megadonor Mark Heising.

SAN FRANCISCO, CALIFORNIA - OCTOBER 06: (L-R) California Gov. Gavin Newsom speaks during a press conference on October 06, 2022 in San Francisco, California. California Gov. Gavin Newsom was joined by the governors of Washington, Oregon and the premier of British Columbia to sign a new climate agreement to further expand the region\u2019s climate partnership. (Photo by Justin Sullivan/Getty Images)California Governor Gavin Newsom Photo: Justin Sullivan/Getty Images

Newman called the idea that the governor is being swayed by donors “beyond absurd,” pointing to other Newsom backers, including Ron Conway and Lyft itself, who are funding the Yes campaign. “I assume the accusation would come if he supported it as well,” Newman said. He argues that Lyft’s attempt to frame itself as defender of the climate rings false, particularly since the company has pushed back against past efforts to force rideshare companies to go electric. “That timeline proves that they only care about their profits,” Newman said. “Prop. 30 is by Lyft, and for Lyft.”

While the No campaign has taken on an anti-tech flavor, many of the billionaires bankrolling it actually made their money in tech. That list includes Hastings and Pincus, but also tech investor Arthur Rock, Activision Blizzard CEO Bobby Kotick, Intuit co-founder Scott Cook and Sequoia's Moritz, among others. In a recent op-ed in the Financial Times, Moritz referred to Prop. 30 as a “Lyft bailout” and warned that it could drive business leaders to leave California for lower-tax states. “Governors Ron DeSantis of Florida and Greg Abbott of Texas will be hoping Lyft’s tax bailout succeeds,” the op-ed read.

On the Yes campaign, no one is disputing the fact that but for Lyft’s funding, there would be no Prop. 30. What they refute — emphatically so — is the idea that the measure was “devised” by Lyft and not the transit and climate advocates who say it was their brainchild. “It would have been fair to say this is being funded by a single corporation. That’s the truth,” Cohen said. “But [the opposition] is saying that it was a scheme devised by a single corporation. That’s the difference between misinformation and information.”

Asked to clarify whether the No campaign has any additional evidence to suggest Prop. 30 originated with Lyft, Newman said, “It is because of the money.”

If Prop. 30 does help Lyft in any way, the dozens of climate, health, and public interest groups that have lined up to back it don’t seem to mind. The No campaign, by contrast, has no such institutional support from climate advocates.

And yet, it’s the No side that’s managing to win over voters by the day, turning the cash infusion from Lyft — once Prop. 30’s salvation — into its biggest threat. “The easiest way to peel off the progressives is to say this is all a scheme by a single corporation,” Cohen said. “If they actually focused on the measure, there’s not compelling arguments that peel off progressives and Democrats. Don’t tax the millionaires? Don’t clear the air? Don’t give incentives to low-income folks? None of those work.”


Judge Zia Faruqui is trying to teach you crypto, one ‘SNL’ reference at a time

His decisions on major cryptocurrency cases have quoted "The Big Lebowski," "SNL," and "Dr. Strangelove." That’s because he wants you — yes, you — to read them.

The ways Zia Faruqui (right) has weighed on cases that have come before him can give lawyers clues as to what legal frameworks will pass muster.

Photo: Carolyn Van Houten/The Washington Post via Getty Images

“Cryptocurrency and related software analytics tools are ‘The wave of the future, Dude. One hundred percent electronic.’”

That’s not a quote from "The Big Lebowski" — at least, not directly. It’s a quote from a Washington, D.C., district court memorandum opinion on the role cryptocurrency analytics tools can play in government investigations. The author is Magistrate Judge Zia Faruqui.

Keep ReadingShow less
Veronica Irwin

Veronica Irwin (@vronirwin) is a San Francisco-based reporter at Protocol covering fintech. Previously she was at the San Francisco Examiner, covering tech from a hyper-local angle. Before that, her byline was featured in SF Weekly, The Nation, Techworker, Ms. Magazine and The Frisc.

The financial technology transformation is driving competition, creating consumer choice, and shaping the future of finance. Hear from seven fintech leaders who are reshaping the future of finance, and join the inaugural Financial Technology Association Fintech Summit to learn more.

Keep ReadingShow less
The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.

AWS CEO: The cloud isn’t just about technology

As AWS preps for its annual re:Invent conference, Adam Selipsky talks product strategy, support for hybrid environments, and the value of the cloud in uncertain economic times.

Photo: Noah Berger/Getty Images for Amazon Web Services

AWS is gearing up for re:Invent, its annual cloud computing conference where announcements this year are expected to focus on its end-to-end data strategy and delivering new industry-specific services.

It will be the second re:Invent with CEO Adam Selipsky as leader of the industry’s largest cloud provider after his return last year to AWS from data visualization company Tableau Software.

Keep ReadingShow less
Donna Goodison

Donna Goodison (@dgoodison) is Protocol's senior reporter focusing on enterprise infrastructure technology, from the 'Big 3' cloud computing providers to data centers. She previously covered the public cloud at CRN after 15 years as a business reporter for the Boston Herald. Based in Massachusetts, she also has worked as a Boston Globe freelancer, business reporter at the Boston Business Journal and real estate reporter at Banker & Tradesman after toiling at weekly newspapers.

Image: Protocol

We launched Protocol in February 2020 to cover the evolving power center of tech. It is with deep sadness that just under three years later, we are winding down the publication.

As of today, we will not publish any more stories. All of our newsletters, apart from our flagship, Source Code, will no longer be sent. Source Code will be published and sent for the next few weeks, but it will also close down in December.

Keep ReadingShow less
Bennett Richardson

Bennett Richardson ( @bennettrich) is the president of Protocol. Prior to joining Protocol in 2019, Bennett was executive director of global strategic partnerships at POLITICO, where he led strategic growth efforts including POLITICO's European expansion in Brussels and POLITICO's creative agency POLITICO Focus during his six years with the company. Prior to POLITICO, Bennett was co-founder and CMO of Hinge, the mobile dating company recently acquired by Match Group. Bennett began his career in digital and social brand marketing working with major brands across tech, energy, and health care at leading marketing and communications agencies including Edelman and GMMB. Bennett is originally from Portland, Maine, and received his bachelor's degree from Colgate University.


Why large enterprises struggle to find suitable platforms for MLops

As companies expand their use of AI beyond running just a few machine learning models, and as larger enterprises go from deploying hundreds of models to thousands and even millions of models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

As companies expand their use of AI beyond running just a few machine learning models, ML practitioners say that they have yet to find what they need from prepackaged MLops systems.

Photo: artpartner-images via Getty Images

On any given day, Lily AI runs hundreds of machine learning models using computer vision and natural language processing that are customized for its retail and ecommerce clients to make website product recommendations, forecast demand, and plan merchandising. But this spring when the company was in the market for a machine learning operations platform to manage its expanding model roster, it wasn’t easy to find a suitable off-the-shelf system that could handle such a large number of models in deployment while also meeting other criteria.

Some MLops platforms are not well-suited for maintaining even more than 10 machine learning models when it comes to keeping track of data, navigating their user interfaces, or reporting capabilities, Matthew Nokleby, machine learning manager for Lily AI’s product intelligence team, told Protocol earlier this year. “The duct tape starts to show,” he said.

Keep ReadingShow less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of RedTailMedia.org and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.

Latest Stories