Unions Lost a Major Battle in Their War on the Gig Economy

They’re introducing third world practices of exploitation in the first world. Vote no on this corporate power grab. We’re not getting benefits. And I knew that coming into this. I like the flexibility. Should Americans be allowed to freelance? Progressive Democrats have been pushing legislation at the state and federal level that would force companies like Uber and Lyft in particular to make all of their independent contractors full-time employees. Would you like to see this California based law go nationwide? Well, of course. But that movement had a major setback in the 2020 election when California voters came out in favor of severely limiting the impact of a 2019 law that, as it was originally written, would have wiped out the state’s freelance economy. California voters appear to have approved Proposition 22.

00:46 - Assembly Bill Five had already been weakened by several carve-outs, but a referendum on the 2020 ballot was the biggest blow to the bill’s original intent, because it means that Uber and Lyft drivers will be mostly exempt from its requirements. Back in May, Joe Biden called attempts to gut AB5 unacceptable, urging Californians to vote no on the referendum. Nevertheless, in this overwhelmingly blue state, almost 60% approved the measure at the ballot box. When Reason covered AB5 earlier this year, its most vocal opponents turned out to be freelance writers on both the left. This goes too far. And right. They’re politicians, they’re union workers. There are people who don’t get it. They’re activists.

01:26 - They’re cutting people off from opportunity. It didn’t occur to California law makers that many freelancers actually prefer the flexibility that comes with being an independent contractor. Companies like Vox, which wrote articles in support of AB5, cut its staff of independent contractors because it couldn’t afford to bring them on full time. Labor activists and progressive lawmakers were, in effect, deciding on behalf of workers that if they couldn’t have a full-time job with benefits, they would be better off not having a job at all. For us, this is about focusing on ensuring that jobs are good jobs, right? If we have one or a hundred jobs that are paying less than minimum wage, there is absolutely no benefit.

02:04 - We, I rather have, you know, 50 good jobs than a hundred bad paying jobs. And those 50 good jobs are actually giving a living wage. Although the law applied to freelance writers, its real targets where gig economy startups like Uber, Lyft and DoorDash. Uber and Lyft said that if AB5 were enforced as originally written, it would cost hundreds of thousands of drivers their jobs, and may even force the companies to shut down operations in California. Basically this is a unions versus independent workers struggle.

02:36 - The unions are declining, except public employees unions, and so they’re desperately thrashing around for people that they could organize. Williamson Evers is a political scientist and a senior fellow at the Independent Institute, a libertarian think tank in Oakland, California. He says that Uber and Lyft weren’t bluffing when they said they’d leave California. If you say, well, in California, it’s just to be a sinkhole, nothing but expense and red tape and crazy labor costs that are not going to be true in other places, why go there? If drivers are forced to become employees, up to 90% of app based driving jobs could disappear. The ride sharing companies spent more than $200 million on proposition 22, trying to convince California voters to exclude them from AB5, while the law’s opponents spent roughly $20 million.

03:28 - Proponents of AB five attribute their defeat to the fact that they were outspent. I don’t think money determines political outcomes. It has an effect on them. In 2016, Hillary Clinton, vastly outspent Donald Trump, and she lost anyway. It’s not really determinative. The Prop 22 people have the better argument, and they took advantage of what they had to make their case to the people. I hope that there’s some way that the labor movement can look at freelancers of all types and say, this is a valid, honorable profession, that we are workers, too. Many of us choose this field. We are not exploited. We’re not scabs.

04:12 - We’re small businesses, and we deserve to be treated that way. The real exploitation is the thing that forces people to work hours that they don’t want to work. And in ways they don’t want to work. .