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OpEdNews Op Eds    H4'ed 11/1/20

Uber Is OLD

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Uber's business model is out-dated and can only stand in the way of progress.
Uber's business model is out-dated and can only stand in the way of progress.
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Employment law has to be re-rewritten and brought up to date--and it's a slow, messy, and painful process. But Prop 22 will only hinder this progress by locking us to the mistakes of the past decade.

It can't be easy to masquerade as a "disruptive startup" when you've been the world's largest de facto taxi corporation for almost ten years.

And yet Uber--like some middle-aged guy who still acts like a teenager--keeps trying to pull this act off. And with the other corporate supporters of Prop 22, they keep trying to tell us that Prop 22 will defend their "new" model of employment.

But this whole "gig economy" thing isn't new--it's getting pretty old!

Let's step back in time a bit, to the years 2009 through 2012. Uber and Lyft didn't invent the idea of treating their workers as Independent Contractors--in fact, much like their taxi-hailing apps, they copied that directly from the existing taxi industry. Most taxi drivers have been independent contractors in California since the 1970s.

What Uber and Lyft did bring to the table was massive amounts of venture capital, that allowed them to promote their apps to the public; and with that, the need to pay back that capital to their investors. Uber's and Lyft's massive amounts of borrowing--far more than they have ever generated in profit--is the foundation of the constant existential peril of going out of business that they operate under. The core of their business model involves fighting this existential peril by always expanding (achieved, for example, by offering rides at an artificially low price), and by keeping drivers as low-paid and fragmented as possible.

The old distinction between "Employees" and "Independent Contractors" had been workable, as long as most "Independent Contractors" were not misclassified. That is, as long as they were actually independent, relatively self-controlling, and performing work that was incidental, rather than central to, the company that was employing them. But over the last decade, unscrupulous corporations have abused IC status more and more, stretching the situation to the breaking point. And Uber and Lyft, pushed by their existential money problems, have been at the forefront of these abuses.

Californians have responded to these problems with a new movement to rewrite employment law and establish new clarifications over the distinction between employee and IC status. Lawmaking has been famously compared to sausage-making--a messy, unsightly process--and the reforms initiated by Assembly Bill 5 (AB5), and continuing even now, are far from finished. There is no quick solution.

But make no mistake: Prop 22 will not help solve these problems, it will only exacerbate them by locking us into the outdated, abusive and abused system of the past decade. Redefinition and clarification of employee rights and employer responsibilities helps everyone--both employees and (responsible) employers; but Prop 22 is an attempt to sabotage these much-needed reforms.

As I pointed out in my previous article in this series, Uber, Lyft, and the rest are extremely unlikely to go out of business due to the failure of Prop 22. At any rate, they clearly feel they can afford to burn $200 million dollars by blanketing the media and everyone's mailboxes with advertising.

(Although California taxpayers did help pay for those flyers, by the way.)

Incidentally, may I ask, Are you sick of even hearing about Prop 22?

No doubt, for the vast majority of people, the answer is a loud yes.

If you are sick of hearing about Prop 22, vote no! If Prop 22 fails, the only outcome will be that a few companies have to change their employment structure, and pay their workers better. Fears of massive layoffs are unfounded: there will still be demand for drivers, and in fact opportunities could expand as competitors to the Uber/Lyft duopoly come into the market.

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Anthony Kalamar is an independent scholar and writer on environmental and technology issues.

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