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Emmanuel Macron embroiled in global Uber scandal

Emmanuel Macron went to extraordinary lengths to support Uber’s lobbying campaign to help it disrupt France’s closed-shop taxi industry, even telling the tech company he had brokered a secret “deal” with its opponents in the French cabinet.

Leaked files including text message exchanges between Uber executives and Macron reveal how the cab-hailing business identified him as a key ally when he was economy minister and turned to him to help it behind the scenes.

The files suggest pro-business Macron, who was re-elected French president in April, was close enough to Uber’s managers during his two years in the economy ministry from 2014-16 for them not to think twice about contacting him for possible help when their premises were raided by tax and other authorities.

The Uber files is a global investigation based on a trove of 124,000 documents that were leaked to the Guardian by Mark MacGann , Uber's former chief lobbyist in Europe, the Middle East and Africa. The data consist of emails, iMessages and WhatsApp exchanges between the Silicon Valley giant's most senior executives, as well as memos, presentations, notebooks, briefing papers and invoices.

The leaked records cover 40 countries and span 2013 to 2017, the period in which Uber was aggressively expanding across the world. They reveal how the company broke the law, duped police and regulators, exploited violence against drivers and secretly lobbied governments across the world.

To facilitate a global investigation in the public interest, the Guardian shared the data with 180 journalists in 29 countries via the International Consortium of Investigative Journalists (ICIJ). The investigation was managed and led by the Guardian with the ICIJ.

In a statement , Uber said: "We have not and will not make excuses for past behaviour that is clearly not in line with our present values. Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come."

But most remarkably, the then 37-year-old ex-Rothschild banker told Uber he had cut a deal favourable to Uber with a bitterly divided Socialist government. It appears to have involved the Silicon Valley company closing down its most controversial unlicensed service in exchange for significantly lighter rules for another.

The messages paint a portrait of a politician who was, at least initially, exceptionally accommodating to Uber. “Thanks dear Travis,” the economy, industry and digital affairs minister wrote to the company’s co-founder Travis Kalanick in one late 2014 email exchange. “Let us keep in touch and progress together. Best, Emmanuel.”

The future president was seemingly shy about recording his in-person meetings with Kalanick in his public diary: of four revealed by the leak, only one, in Davos in January 2016, seems ever to have been made public. Behind the scenes, however, files suggest he and his aides were doing what they could to make life easier for Uber in France.

The ‘startup nation’

The story of Uber in France is of a brash US startup playing hardball in the heart of old Europe; of protests, police crackdowns, and beaten-up drivers; of digital dirty tricks, executive arrests, inflatable dolls and F-words from Courtney Love. The remarkable role played by Macron, a young and ambitious minister bent on revolution, has until now gone untold.

Uber’s presence was always going to cause problems in a country that takes workers’ rights as seriously, and defends them as robustly, as France. For many, including in government, Uber’s model was simply anathema, synonymous with wholesale job insecurity and the casualisation of labour.

Besides political and legal opposition, the company’s drivers faced the physical fury of France’s licensed cab drivers , themselves labouring under a regulatory regime that included up to 300 hours of obligatory training and a limited – and insufficient – quota of taxi licences that in some cities changed hands for up to €250,000.

The ensuing clash marked France deeply enough for the Larousse dictionary to add, in 2017, the word ubérisation to its lexicon: “The challenging of an economic model by a new player offering the same services at lower prices, carried out by self-employed persons rather than employees, most often via internet reservation platforms.”

Macron’s early enthusiasm for Uber and what he felt it represented was absolute. Appointed in August 2014, he made no secret of his ambition to both embrace the new digital economy and shake up France’s rigid labour market in an effort to reverse rising unemployment, especially where it was highest – among poorly qualified young men from immigrant backgrounds. He wanted a “startup nation”, and Uber could showcase it.

Macron wanted Uber to show France the potential of the new, deregulated economy; his job, he insisted, was to help “the outsiders, the innovators”. Banning Uber, he would tell Mediapart , would have been tantamount to sending unemployed youths from the run-down banlieues “back there to sell drugs”.

Files show Macron welcomed the company’s input. Before an initial meeting between Uber and Macron, a ministerial aide wrote to its French management asking explicitly for its “regulatory expectations”, as well as the estimated impact of its business on employment and transport costs.

That meeting, when it eventually took place on 1 October 2014 at the finance ministry, set the tone for the rest, unfolding in a “remarkably warm, friendly and constructive” atmosphere, according to an internal Uber note. Macron wanted to “find ways to make France work for Uber, so Uber can work in and ‘for’ France”, it added.

The note suggests the minister was “apologetic” about a law introduced by the Socialist assembly member Thomas Thévenoud that had been adopted only that morning. It radically restricted the activities of VTCs, as app-based ride-hailing services in France are known (the initialism stands for véhicule de tourisme avec chauffeur .

Macron showed a “clear desire to work around the [new] Thévenoud legislation”, according to Uber’s note of the meeting.

The company’s chief lobbyist in Europe, Mark MacGann, was delighted. “Spectacular meeting, never saw anything like it,” he wrote. “We’ll all be dancing soon.” Kalanick, too, was happy, thanking Macron personally – albeit with a caveat.

“I take very seriously your comment that you believe ‘Uber brings innovation and jobs to France’,” he wrote. “I make the commitment to you that we will do just that, and at a rapid pace, if the appropriate regulatory framework can be found to make Uber a success in France.”

The document trove shows this would be the first of almost 50 phone calls, email exchanges or face-to-face meetings between the young economy minister or his staff and senior Uber executives. And for good reason: the app-based service was finding the going in France far from easy.

A key bone of contention was Uber’s “person-to-person” UberPop service, which allowed private individuals to offer rides in their own cars. For Uber, this was car-sharing; for France’s authorities it was an unregulated commercial transport service, banned under the new Thévenoud law and by local government decrees.

It was UberPop that prompted the most violent scenes in France’s taxi wars. The US musician Courtney Love got caught up in one skirmish in June 2015. “Where are the fucking police???” the widow of Nirvana’s Kurt Cobain tweeted at the then president, François Hollande . “Is it legal for your people to attack visitors? Get your ass to the airport. Wtf???”

Taxi drivers had “ambushed our car and are holding our driver hostage”, Love wrote, adding a photo of an egg-splattered vehicle. “They’re beating the cars with metal bats. This is France?? I’m safer in Baghdad.”

‘Sorry to bother you, but there’s a raid happening’

France’s justice ministry, tax authorities and assorted other regulatory bodies all took a very close interest in Uber’s activities, raiding the company’s offices in Paris, Lille and Lyon at least five times between late 2014 and mid-2015.

Politically, the situation was no easier. At the interior ministry – legally responsible for France’s regular licensed taxis – the home affairs minister, Bernard Cazeneuve, disliked what he viewed as a cowboy outfit operating on the fringes of the law; the prime minister, Manuel Valls, was only slightly less opposed.

While the files show Uber executives identified Macron as an ally, they marked Valls down early on as a “strong-minded” opponent, privately denouncing him as “enemy #1” and plotting demonstrations against him – including the surreal suggestion from one senior executive of “lots of drivers with Valls mask on and a guillotine”.

Uber discussed – and often tried – everything from “civil disobedience” to social media campaigns and relentless court challenges. Some suggestions outlined in the files were absurd: at one stage, a senior executive proposed placing inflatable dolls in cars to get round a ban on one class of driver carrying fewer than two passengers. An Uber spokesperson said the suggestion was among “a long list of brainstormed ideas” and was not implemented.

But if the company allowed Macron to present himself as France’s innovator-in-chief, what did it get in return?

One of the regulatory bodies investigating Uber was France’s grandly named directorate general for competition, consumer affairs and the repression of fraud (DGCCRF). The documents show executives believed Macron at least promised to Uber to try to persuade the directorate, which fell under his ministry’s ambit, to ease off.

In November 2014, during raids on its Lyon and Paris offices that infuriated the company, executives’ kneejerk reaction appears to have been to turn to their powerful ally.

“They report to Macron, correct?” demanded the then Uber vice-president David Plouffe from the US. MacGann reported back that Macron had “told his staffers to talk to the DGCCRF” and tell the regulator: “We need to have a technical debate with them … I don’t want them to be too conservative.”

Before a scheduled meeting with Macron’s aides that month, the lobbyist added: “We have put together a long list of examples where we see his ministry contradicting Macron’s commitments to us.” It is unclear if Macron did speak to the regulator, or if he was able to influence the largely autonomous body.

The DGCCRF said in a statement it had “not been pressured or induced in any form”.

In the midst of another raid on Uber’s Paris office in July 2015, this time by government inspectors investigating suspected tax evasion, exchanges between Uber executives – frantically trying to “kill” access to the company’s computers – include a text message from MacGann saying he had “asked Macron to get them to back off”.

The police were not under Macron’s control, as Uber grasped. But MacGann’s message – polite but confident – reads: “Sorry to bother you, but there’s a raid happening … They say they’ll arrest our executive. We’d hoped to reach a long-awaited peaceful climate by this weekend. Could you ask your staff to advise us?” Perhaps advisedly, Macron never replied.

On occasion, the documents raise questions about whether Macron may have intervened. In October 2015, authorities in Marseille appeared to ban UberX, the company’s regular – and legal – service. MacGann immediately contacted the minister, saying Uber was “dismayed” by the decision and asking if Macron could “ask your cabinet to help us understand what is going on”.default

The minister replied: “I will look at this personally. Have all the facts sent to me and we will make a decision by this evening. At this point, let’s stay calm.” Two days later, the Marseille official “clarified” his decision and in effect revoked the ban. A cheery MacGann wrote to Macron: “Good cooperation with your office and Beauvau [the interior ministry].”

The Marseille official – now one of Macron’s close aides at the Élysée – said he did not receive “any pressure nor had any exchange” with Macron’s department about the ban. Macron’s deputy chief of staff at the time, Emmanuel Lacresse, insisted the then economy minister did not intervene in Marseille nor with any legal proceedings involving Uber.

Uber accepted it had “reached out to public authorities” to explain its position and “get clarification on what this meant for our business”.

Working towards ‘the deal’

Throughout nearly two years of regular, generally friendly contact, the documents suggest Macron, his aides and Uber’s French managers were working together on what became a quid pro quo that the company’s executives referred to as “the deal”, without spelling out precisely what it involved.

In essence, it seems Uber decided voluntarily to pull UberPop – outlawed under the Thévenoud legislation – in exchange for a dramatic easing of the rules covering UberX, in particular around how drivers acquired a VTC licence.

At first, the company believed UberPop could be made to work. “Can we submit a concrete proposal for a regulatory regime for UberPop and to significantly lower barriers to entry for VTCs (licensed drivers)?” asked an Uber briefing note before a Macron-Kalanick conference call in January 2015.

But files suggest Macron convinced it UberPop would never fly in France. He backed an approach “whereby we push hard for lighter VTC licensing requirements and rules”, an Uber manager wrote after an 80-minute meeting with the minister that month, rather than maintaining the UberPop model “which he thinks is difficult/not feasible in France in the current environment, or he does not have the political clout to make it happen”.

Pressure continued to build over the illegal UberPop service, and in late June French authorities arrested two senior Uber France executives .

Days later, “the deal” was done, the documents suggest. Uber announced it intended to suspend UberPop within hours. Kalanick sent a text message to Macron, apparently following conversations the economy minister had had with Valls and Cazeneuve.

“Should we trust Caz?” the Uber co-founder asked bluntly. Macron replied: “We had a meeting yesterday with the prime minister. Cazeneuve will keep the taxi[s] quiet and I will gather everybidy [sic] next week to prepare the reform and correct the law. Caz accepted the deal … Best.” At 8pm Paris time, UberPop was pulled in France.

But how would Uber achieve lighter regulations for UberX? Documents suggest Uber had already worked in coordination with Macron’s staff to submit to friendly MPs legislative amendments relating to the VTC sector. Once UberPop had been suspended, Macron went on to pass one of the key provisions in the amendments – a dramatic cut in the training required for a VTC licence – by ministerial decree.

Cazeneuve told a reporter working with the International Consortium of Investigative Journalists (ICIJ), which was given access to the Uber files by the Guardian, that he was unaware of any such deal. He said he was “very hard” on Uber, adding: “I had a very strong intuition this deserved the utmost toughness.”

Macron did not respond to detailed questions. In a statement, the Élysée said Macron’s ministerial duties at the time “naturally led him to meet and interact with many companies engaged in the sharp shift which came out during those years in the service sector”.

Macron resigned from his ministerial post on 30 August 2016 to devote himself to his La République En Marche movement and the presidential bid that would explode France’s political landscape as comprehensively as his support for Uber disrupted its taxi sector.Interactive

Well before then, Uber’s executives were doubting how much he could really help. As early as January 2015, MacGann was complaining the minister had “done nothing for us” since the previous October. By late 2015, managers were wondering whether Macron was quite as influential as they had believed: “Not sure what he wants for us. And not clear he has any power.”

Related: From eureka moment to global domination: a timeline of Uber’s aggressive expansion

A spokesperson for Kalanick said in an industry “where competition had been historically outlawed”, attempts to prevent development in the transport industry were “natural and foreseeable”.

In a statement, an Uber spokesperson said its meetings with Macron were part of his ministerial responsibilities and since 2017 it had declared its lobbying activities in France to a state transparency body.

She said the suspension of UberPop in France was “prompted by the level of violence” targeted at drivers. She said the suspension was “in no way followed by more favourable rules”, and said Uber drivers were now subject to even “stricter regulations”. A law that came into force in Macron’s first term as president, she added, had “drastically changed” operating conditions for drivers and increased “the barriers of entry” for companies such as Uber.

But Thévenoud, author of the law – apparently opposed by Macron – that in effect outlawed services such as UberPop, disputed Uber’s assessment of conditions in France. He accused Macron’s government of failing to recognise decisions by France’s highest courts to reclassify Uber drivers as paid employees. “The point is that today the French government is probably the most pro-Uber government in the western world.”

Source: Newsbreak

 
Written by The Levant

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