Independent contractors

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

Nearly 60 percent of Californians approved a proposition to exempt Uber and Lyft from most of Assembly Bill 5.

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Should Americans be allowed to freelance? Progressive Democrats have been pushing legislation at the state and federal level that would force gig economy companies like Uber and Lyft to make all of their independent contractors full-time employees.

But that movement had a major setback in the 2020 election when California voters came out in favor of Proposition 22, which severely limits the impact of a 2019 law that, as it was originally written, could have wiped out the state's freelance economy.

The law, Assembly Bill 5, had already been weakened by several carve-outs. But Prop 22 deals a massive blow to A.B. 5's original intent because it means that Uber and Lyft drivers will be mostly exempt from its requirements.

Back in May, Democratic presidential contender and former Vice President Joe Biden called attempts "to gut" A.B. 5 "unacceptable," urging Californians to vote no. Nevertheless, in this overwhelmingly blue state, almost 60 percent approved Prop 22 at the ballot box.

When Reason covered A.B. 5 earlier this year, its most vocal opponents turned out to be freelance writers.

Randy Dotinga, a left-leaning San Diego-based freelance journalist and the former president of the American Society of Journalists and Authors, said at the time that "this is a really unusual position for people in creative fields like freelance journalism to be in…By nature, most of us are liberal, progressive Democrats. We're also pro-union for the most part. And here we are saying this goes too far."

Conservative journalist Kassy Dillon agreed, calling A.B. 5's supporters "people who don't get it…They're activists. They're cutting people off from opportunity."

It didn't occur to California lawmakers that many freelancers prefer the flexibility that comes with being an independent contractor.

Like many other companies, Vox, which supported A.B. 5, ended up cutting 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 having no job at all.

"For us, this is about focusing on ensuring that jobs are good jobs," Coral Itzcalli, a spokesperson for Mobile Workers Alliance, which is trying to unionize the industry, told Reason. "If we have one or 100 jobs that are paying less than minimum wage, there is absolutely no benefit. I [would] rather have 50 good jobs than 100 bad paying jobs."

Although the law applied to freelance writers, its real targets were gig economy startups like Uber, Lyft, and DoorDash. Uber and Lyft said that if A.B. 5 were enforced as originally written, it would cause hundreds of thousands of drivers their jobs, and may have even forced the companies to shut down operations in California.

Williamson M. Evers, a political scientist and senior fellow at the Independent Institute, a libertarian think tank, sees A.B. 5 as a trial run for national legislation with the same aim. "Basically this is a unions versus independent workers struggle. The unions are declining, except public employee unions. And so they're desperately thrashing around for people that they could organize."

The ridesharing companies spent over $200 million on Prop 22, trying to convince California voters to exclude them from A.B. 5, while the law's opponents spent roughly $20 million. Proponents of A.B. 5 attribute their defeat to the fact that they were outspent, but Evers is skeptical.

"I don't think money determines political outcomes. In 2016, Hillary Clinton vastly outspent Donald Trump and she lost anyway. It's not really determinative. The Prop 22 people had 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," Dotinga said. "We are workers, too. And many of us choose this field. We are not exploited. We don't exploit others. We're not scabs. We're small businesses and we deserve to be treated that way."

"The real exploitation is the thing that forces people to work hours they don't want to work and in ways they don't want to work," says Evers.

Produced and narrated by John Osterhoudt. Feature image by Lex Villena.

Photos: Rick Wilking/REUTERS/Newscom; Sam Hodgson/ZUMA Press/Newscom; MIKE BLAKE/REUTERS/Newscom; MIKE BLAKE/REUTERS/Newscom; MIKE BLAKE/REUTERS/Newscom; LUCY NICHOLSON/REUTERS/Newscom; Deccio Serrano/ZUMA Press/Newscom

NEXT: Joe Biden’s Endless River of Debt and Regulation

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  4. Fuck the Unions!

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    2. Each person has their knowledge and skill for sale. It is their responsibility to sell it to their advantage or not. An employer has a job to be done at a time, place, method and price as needed…it is the employers responsibility to determine if a person is agreeable. These relationships are private contracts and none of outsider business. Why should an employer be forced house a labor contractor? Why would an individual surrender its rights of negotiation to a labor contractor?

  5. Now georgia is finding the same voting tabulation glitches as Michigan.

    https://www.politico.com/news/2020/11/04/georgia-election-machine-glitch-434065

    Update bight before the election. Not shady at all.

    1. Minor, isolated software problem. Was dealt with. Yawn.

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      4. Sure it was. We believe you.

  6. Cali being a super majority democrat hellhole, they will find another way to fuck you.

  7. Cognitive dissonance anyone? The same voters overwhelmingly voted for the folks that produced this pro-union legislation.
    Perhaps fighting on single-issue grounds is the way for libertarians to find consensus and educate voters . And maybe those same voters will find a way for principles to overcome their desire to punish someone who uses crass language.

    1. If only people could vote semi-rationally, focused on actual issues and policies, and not on personalities and campaign imagery.

      Perhaps democracy works as well for adult voters as it does for preschoolers (or tribes of chimpanzees).

      1. It’s the worst form of government, except for all the others.

  8. ‘Randy Dotinga, a left-leaning San Diego-based freelance journalist and the former president of the American Society of Journalists and Authors, said at the time that “this is a really unusual position for people in creative fields like freelance journalism to be in…By nature, most of us are liberal, progressive Democrats. We’re also pro-union for the most part. And here we are saying this goes too far.” ‘

    Fucking retard. So, statist control and government interference is a good thing, until it threatens your rice bowl. Fuck you, Randy.

    1. Everybody’s conservative about the things they know best. Or, yeah, it’s fine when we fuck you, no fair when you try to fuck us back.

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  10. Heard the liberals on NPR lamenting on how corporations will no longer have to give benefits to all their employees. They cannot comprehend their good intentions having bad results.

  11. “If we have one or 100 jobs that are paying less than minimum wage, there is absolutely no benefit. I [would] rather have 50 good jobs than 100 bad paying jobs.”

    Knowing Progressives as we all do, I’d say they’d prefer NO jobs rather than 50 good jobs and 50 unemployed. “Equality for all (except us)!”

  12. Yet another case of corporations engaging politics so that the will of the people can triumph over democrats.

  13. “For us, this is about focusing on ensuring that jobs are good jobs pay union tribute,” … a spokesperson … trying to unionize the industry, told Reason.

    Fixed.

  14. I see from the ballotpedia entry linked in the article that, while Prop. 22 allows independent contractors to work in ride-share arrangments, it imposes quite a bit in the way of requirements on the company engaging them — not as much as for employees, but more mandatory terms than they might like. So it doesn’t restore the status quo ante AB 5 for ride-sharing; it’s a compromise.

    1. It’s a compromise that the employers (who more or less wrote the proposition language) can abide, as opposed to the language of AB5 (aka, the “Screw Uber” bill), which would make their business model more or less untenable in the state.

      In a way, this proposition passing might have helped the Dems in Sacramento since their constituents (and especially their fund raising wellsprings) would have been very upset to lose the convenience of doordash/grubhub, uber/lyft, and instacart, especially in the pandemic lockdowns where the state/local governments are continuing to cultivate panic and trying to keep people afraid to leave their homes for any reason other than to attend a BLM rally (because the virus knows why people are gathering, and it respects the cause enough to not spread at those kinds of gatherings.

  15. Steel, auto and other labor unions helped destroy the economies of Pittsburgh, Detroit, Cleveland, Buffalo and the rest of the rust belt in the 1970s and 1980s.

    Since then, teacher’s unions have damaged or destroyed many public school systems (especially in Democrat cities), while public sector union pensions are now threatening the financial viability of NY, IL, NJ, CT and other deep blue states (which is why they wanted Trump to bail them out in the covid $$$$ legislation).

    Unions are nothing more than parasites.
    .

  16. Next step is that the government finds a way to implement this without voter approval.

    1. That’s what AB5 was in the first place.

      Uber and Lyft more or less wrote this prop and got it onto the ballot, where the voters over-ruled the work of the legislators who they keep re-electing in landslide victories.

      What might be interesting, although unlikely, would be if the voters in CA were to step back and look at how the state Dem party and elected officials sided on the slate of propositions; they’d see that their actual policy preferences are about the opposite of what their alleged representatives would like to see imposed in the people of the state. It was particularly interesting this year to see how many of the props had the Dem party endorsing one side and the NAACP endorsing the other.

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  20. Government interference in the employer/employee nexus is evil. Anything that reduces this interference (withholding taxes, etc.) or its scope (contractors, union membership, etc.) is a good thing.
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