Uber is attempting to colonize the California government
Gig companies are spending $185 million so they don't have to pay their workers a living wage
If you live in California and own a smartphone, or a television, or a mailbox, or a functioning pair of eyes, chances are you have seen ads endorsing the Prop 22 ballot initiative in the state. Uber, Lyft, Doordash, Postmates, Instacart, and other "gig" companies have spent about $186 million so far to trick Californians into voting for this atrocity — by far the most that has ever been spent on any ballot initiative in American history. The campaign is so massive that many people who live all the way across the country, including myself, have seen these ads.
Prop 22 is one of the worst ballot initiatives I have ever seen, and that is saying a lot. It would blow a huge hole in California labor law, creating a permanent sub-caste of workers vulnerable to exploitation, and turn over a huge chunk of California's political sovereignty to ruthless money-torching corporations by requiring a seven-eighths majority in the legislature to amend it. Naturally, it is being sold on lies. For God's sake, Californians, vote this thing down.
As Alex Sammon explains at The American Prospect, the basic idea of Prop 22 is to carve out a gig worker exception in the recent state law AB-5, which forced businesses like Uber to treat their workers like normal employees. That means paying the minimum wage, as well as unemployment insurance payments and other protections. Prop 22, by contrast, would formalize a system in which these workers would have "no eligibility for state unemployment insurance, extremely curtailed worker protections, no overtime, no sick leave, no workplace discrimination protection, and no right to collectively bargain," writes Sammon. In return, workers would get an undefined assistance with health insurance premiums and disability benefits, and a much weaker wage standard — guaranteeing just $5.64 per hour, according to a UC Berkeley analysis.
The companies claim Prop 22 would help ordinary drivers. It would "protect the ability of app-based drivers to choose independent work" and provide "drivers new benefits and protections," a pro-22 website claims. In reality, Uber and company want these things because it would save their owners and executives money — as Sammon writes, "refusal to pay into the state's unemployment insurance fund has saved Uber and Lyft a combined $413 million since 2014."
These companies have also bought off several nominally "progressive" organizations in a breathtakingly cynical piece of woke-washing — making out as though this assault on the labor rights and incomes of a heavily-minority workforce is actually a racial justice issue, somehow. In particular, California NAACP President Alice Huffman has been publishing absolutely shameless pro-22 agitprop after an $85,000 payment to her consulting firm. (She has done the same routine with several other dubious ballot initiatives this year.)
One especially bizarre aspect of this situation is that, even with all their cheating of employment and anti-trust regulations, almost all these companies have been hemorrhaging money for years. Uber alone has lost something like $27 billion since 2009 — that's more than an entire year of profits from the massive Bank of America — yet somehow it keeps not going bankrupt. (It seems it has a blank check from the bottomless sovereign wealth fund of Saudi Arabia.) So here we have a whole sector of the economy maniacally dedicated to maximum exploitation of workers that doesn't even make any money.
Moreover, there is little prospect of these companies ever making mongo profits, as their colossal venture capital investments would necessitate, even if they can treat their workers like disposable hand wipes. Taxi driving and food delivery are low-margin, high-investment businesses that cannot grow exponentially in the fashion of Google or Amazon. The only reason that Uber and Postmates have grown so fast is that they hugely undercut all the normal competitors that have to make their accounting work. Customers like these companies largely because they get a huge discount from what it actually costs to provide the service.
Indeed, voting against Prop 22 is arguably a pro-business move in addition to being pro-worker. If you believe in market competition, companies should have to compete fairly on grounds of price and quality, not be undercut by a cynical evasion of labor and anti-trust law. (They should also be prohibited from dumping their services under cost, but that is a subject for another article.)
But perhaps the most offensive part of Prop 22 — the one that gives away the whole game — is the seven-eighths majority requirement to change it through the legislature. This is not the move of a coalition that thinks it is on the side of the majority of Californians. This is what you do if you are pushing a grossly unfair measure with lies, and you are pretty sure there is going to be a huge backlash when people figure out they've been sold a bill of goods.
Of course, if Prop 22 passes, Uber and company will continue to rely on the California government for their basic functioning — from building and maintaining roads, to running the legal system, to providing basic services all their workers and customers rely on, and a hundred other things. It's a classic Republican Party strategy of quiet authoritarianism: set up minoritarian structures that make it nearly impossible for the people to actually overthrow your power no matter who they vote for. In effect, these companies are trying to colonize the power of the state for themselves.
Californians: Don't fall for it!