Big Tech Threw $200 Million at a Ballot Measure to Hurt Gig Economy Workers. And They Won

By Ross Barkan, Guardian UK

14 November 20

Having won in California, they will seek devastating victories elsewhere

ne of the darker outcomes of 21st-century work life has been the predatory gig economy. Divorced from healthcare benefits and regular pay, millions of workers are told they are supposed to be lucky to drive passengers around in a car for ever-diminishing returns.

Last week, there was hope that Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors, would be defeated in California, an increasingly progressive state. But voters passed the measure overwhelmingly, thanks to obscene amounts of spending by Uber, Lyft, Seamless and DoorDash. Unleashing more than $200m – 10 times the amount of the proposition’s opponents, like labor unions – the coalition of tech giants easily drowned out those fighting for the rights of workers.

The sum is titanic. Uber and its allies left nothing to chance. Reaping billions in investment capital, the companies could easily deploy the cash to crush those advocating on behalf of their workforce.

With Proposition 22’s passage, the underclass of these tech giants will remain overworked and underpaid, denied the benefits of full-time employees. They will continue to dwell in precarity, unable to access unemployment insurance, paid family leave or healthcare during a pandemic.

The vote will probably have a nationwide impact, since it rejected the principles outlined in a 2018 state supreme court ruling and enshrined in a 2019 state law that said workers who performed tasks within a company’s regular business must be treated as employees. Now gig workers are exempted from these rules and can continue to work independently.

This is a pernicious new era of capitalism, in which companies can brutally exploit their workers without ever turning a profit. Old-world giants, like General Motors, at least needed to make money to survive.

The Uber business model is Trumpian. Storming into cities across the world and openly flouting local regulations, Uber burns up investor cash, winning through sheer ubiquity. Uber loses money every year but devours the market, offering artificially cheap transportation while driving rivals, like taxi drivers, to suicide. There is no way to compete with a company that is allowed to thrive while losing money. Uber can continually discount its rides, confident new capital will arrive to prop it up forever.

In fact, Uber’s survival depends on not classifying its drivers as full-time employees. That would make them a conventional company, subject to certain laws of gravity. Workers can be costly; they make demands, after all.

Had Proposition 22 failed, Uber, with its multibillion-dollar valuation, would have been forced to redirect its capital into the pockets of its workers. This, in the long run, would be unacceptable, depriving its wealthy benefactors and executives of their unreality.

In a sane society, a company could not habitually lose money, punish its workers and keep functioning. Uber can.

For much of the 2010s, gig companies coasted on the goodwill of the public. Blissfully unaware of how their goods were rendered so cheaply, most consumers and politicians celebrated the rise of Uber, Lyft and their brethren.

The outcome of this measure should not be treated as a referendum on big tech – not with such an absurd spending disparity. Give a labor union $200m to counter propaganda, and a vote total could be flipped. The outcome does, however, serve as a warning to the left that these rapacious companies will do anything and everything to protect their unnatural advantage in the marketplace.

Uber and its ilk treat workers as expendable assets. Having won in California, they will seek devastating victories elsewhere. It will be up to other states, even Congress, to somehow bring these companies to heel. This is the fight that must be joined.