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Why Uber and Lyft Should Like Trump’s Transportation Pick

Midterm elections nightMidterm elections night
US Sen. Mitch McConnell, Republican from Kentucky, waves to supporters with his wife Elaine Chao during his victory celebration at the Marriott East Hotel in Louisville, Ky. on Nov. 4, 2014.Mark Lyons--EPA

Like any good business reporter, Fortune’s Kia Kokalitcheva jumped on the news Tuesday of the Washington insider Elaine Chao’s appointment as transportation secretary by asking the most pertinent question: How does this affect the companies I cover? I recommend her report, which explores how Chao’s record as George W. Bush’s labor secretary and her subsequent policy pronouncements will affect the so-called ride-sharing industry.

The choice of Chao presents a nice stew of contradictions emblematic of the incoming administration. She has worked in Washington for years, a plus for a boss who never has, but not exactly a fresh start. Moreover, she’ll oversee a vast federal bureaucracy, whereas the issues that matter most to the fledgling transportation-oriented “gig” economy companies like Uber and Lyft—operational regulations and self-driving car rules—tend to be local.

Starting with the gig part of the equation, Chao is a fan of flexibility. She highlights the college educations of many who supplement their incomes as part-time drivers. She’ll undoubtedly favor less regulation, which all companies like. That said, Uber and Lyft already have fought state-by-state and city-by-city to establish regulations for their business. One wonders, as well, just how thoroughly the deregulatory crowd has thought through the likelihood that the mad-as-hell electorate is so excited to be ferrying around strangers to earn some extra cash.

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As for autonomous cars, the secretary of transportation has a big role to play. Already, though, the Obama administration has signaled a desire to take a relatively hands-off approach. In September, the National Highway Traffic Safety Administration, a DOT agency, issued a major report on self-driving vehicles intended as advice for industry rather than requirements. “We are issuing this policy as agency guidance rather than in a rulemaking in order to speed the delivery of an initial regulatory framework and best practices to guide manufacturers and other entities in the safe design, development, testing, and deployment of highly automated vehicles,” it wrote.

Fast action and a light touch sounds like a promising recipe, at least for these upstarts.