California's Politicians Threaten to Suffocate Silicon Valley's Gig Magic
One cold, drizzly evening last October, my family and I faced a dilemma. Our planned dinner at a local steakhouse with guests was delayed. Now dinner out would mean screaming, annoyed glances, and a chaotic retreat.
Fortunately, There's an app for that was no longer just an advertising slogan. It was a reality. The bright icons on our phones, brought to our attention an enterprising army of sitters and food couriers. After a brief discussion and the tap of a finger, the mouth-watering scent of steak wafted through our home as the driver accepted several crisp bills as a tip. After we dined and the kids dozed off in their beds, we enjoyed an evening of pleasant conversation.
The magicians of Silicon Valley bring to life countless such once-impossible, minor fairy tales every day. But California's legislators are about to sound Cinderella's clock by turning these win-win propositions into pumpkins at the stroke of a pen.
Isn’t it nice that some third party didn't have the power to arbitrarily grant us these carriages, only to take them away? Every time Joe has somewhere to go and Cindy wants to make a few bucks driving in her spare time, the wizards at Uber grant two wishes at once -- for a pittance. Fairy Godmothers are looking worse every day.
But that doesn't stop people from trying to play that part. Take Assemblywoman Lorena Gonzalez. In her head, Joe has escaped with too much gold in his pockets and Cindy is a helpless maiden. And the ride-share companies? They be dragons lounging on piles of loot.
As if this weren't fantastic enough, consider that her incantation, Assembly Bill 5, is intended to help Cindy ... by making her Uber’s employee, perhaps even retroactively.
They're the good guys, but let's do something Gonzalez hasn’t: Consider the actual wishes of one "Cindy":
"I have four kids -- three in college and one in high school. If things change, and I have to become an employee, I won't be hirable. I won't be able to take care of my children."
This Cindy is no fool. She has cancer and needs many wishes -- to conveniently schedule her treatments. And even if Uber or Lyft could hire her? Their expenses would jump by a third, destabilizing them on the high wire to profitability. As for Joe? I guess Gonzalez wants him to walk.
Gonzalez may stare into space when she conjures up black magic like AB-5, but Joe and Cindy -- you and me, any time we want to trade -- will suffer the consequences.
Perhaps that's why "gig economy" workers oppose it by large margins (including 97 percent of black drivers). Perhaps that's why at least two dozen better-established occupations (such as entertainment workers, travel agents and medical professionals) are scrambling for exemptions. And perhaps that's why small businessmen also hate the bill:
"I like the way it is now. We pretty much get to be our own boss," [said] a driver and owner of a small trucking company... He asked for his last name and the name of his company to be withheld out of concerns over union retribution. "For me, I started off as a company man, then I went off and bought my own truck," ... He later went on to buy a few more trucks, which are now used by independent contractors working for his company."
A legal analysis by the Littler Workplace Policy Institute shows that the bill will make it harder to start small businesses and hints that the first customer of a new business could sometimes become liable as an employer (!) as it is currently written.
Gonzalez and her partners-in-fantasy, the unions, say that this bill will give workers the "dignity and respect they deserve." Is it dignity to presume that two adults can't reach an equitable agreement to exchange work for pay? Is it respect to ignore numerous polls indicating that this measure is unpopular? And is it even proper for the government dictate terms in an agreement that harms no one? Gonzalez may imagine that ignoring the rights and wishes of workers is the path to prosperity, but she oblivious to our real needs. Rather than granting plenty at the wave of her wand, AB-5 would do much more than deprive us of a ride home: It would take away our ability to work or hire on our own terms.