⚡ Lyfts, Laws, and Labor Rights

What does Prop 22 tell us about the future of regulatory entrepreneurship?

On weeks I don't share new events and book reviews, we'll instead be publishing original writing by Reboot community members on our theme of technology, humanity, and power.

Today's essay is by my brilliant friend Allison Tielking. She was a D1 rower at Stanford, a software engineer at Slack, and has braved the minefield of California politics working on Dean Preston's campaign in San Francisco. She's also a badass advocate: I highly recommend you read her op-ed on experiencing sexual harassment in Lyfts, which spurred a broader campaign with riders and company execs to implement safety features in the apps.

Allison will be discussing a key battleground for labor and the gig economy: California's Proposition 22. After yesterday's fantastic discussion with Moira Weigel and Ben Tarnoff on what it means to be a tech worker, I think it's crucial to understand the legislative terrain on which these abstract concepts operate. And whether or not you're a California voter, this measure will set a precedent not only for gig workers' employment status, but also how much leeway we give companies to shape the law in their favor.

🚘 is prop 22 a dead end for ridesharing?

By Allison Tielking

California’s Proposition 22 has become the battleground of a long-time debate over the employment status of gig workers.

The measure would exempt app-based transportation and delivery companies from providing employee benefits to drivers. It was created in response to California Assembly Bill 5 (AB 5), which ruled that most contract workers deserve greater labor protections, including sick leave, unemployment and workers’ compensation benefits, and minimum wage laws.

For weeks, California residents have been inundated with advertising in support of Prop 22. Ads range from traditional TV commercials and sponsored Instagram stories to invasive emails, push notifications, and in-app features of questionable legality. The $200 million campaign behind this advertising is the largest in national history, funded by the companies that would benefit most from its passing: Uber, Lyft, DoorDash, Instacart, and Postmates.

While Prop 22 is only a state measure, California is a linchpin market for these companies. If Prop 22 fails, gig companies could be responsible for years of back pay, lost benefits, and unpaid unemployment insurance. This could be the $413 million nail in the coffin for Uber and Lyft, which remain unprofitable. But if Prop 22 passes, these companies will set an unnerving precedent that any corporation can use a ballot initiative to maintain illegal business practices.

For the Prop 22 campaign, these companies are using the same strategy they’ve used to fight regulatory pushback around the world.

It’s been successful in the past: make an issue as publicly salient as possible, rally the public to their cause, then use their popular support as leverage to win the change they want from resistant officials.

These tactics exemplify regulatory entrepreneurship, which encompasses any line of business in which changing the law is a significant part of the business plan. Uber was the poster child of this 2017 paper, the most valuable private startup at the time. Yet despite past successes, the strategy isn’t as bulletproof as it seems. Prop 22 remains contentious, with only 46% of voters in favor.

So why is regulatory entrepreneurship faltering now?

The original paper laid out three characteristics that make businesses ripe for regulatory entrepreneurship: frequent user interaction, high growth, and mass public appeal. Uber and Lyft checked all the boxes in 2017, but much has changed since then.

  • First, user engagement. Amid a pandemic, ridership has dropped dramatically, going from 21.8 million in Q2 of 2019 to 8.7 million riders in the same period this year for Lyft. With fewer app interactions, the frequent in-app notifications have gone from innovative to irritating. Old riders have more pressing concerns.

  • Second, high growth. The paper makes a key point that many successful regulatory entrepreneurs are startups, which have a futuristic, trendy sheen to them. Since 2017, Uber and Lyft have gone public, morphing into established, large companies with reputations—and responsibility—to uphold.

  • Third, mass public appeal. The more positively a business is viewed, the more likely it is to both mobilize support and lobby behind closed doors. But from Uber’s history of misogyny to their contributions to urban congestion and pollution, people have become increasingly skeptical of these businesses.

I witnessed firsthand how little Uber and Lyft cared about driver well-being when I worked on rider safety features with them for months.

While my suggestions for rider safety were taken and implemented quickly, Lyft and Uber paid little attention to drivers’ stories of passengers making dangerous sexual advances. Rider safety was the major thing threatening their profits at the time, so that’s who they focused on.

Now, these companies are pivoting to pretend to care about workers’ rights—particularly, the flexibility they suggest that Prop 22 will grant—even though the ballot measure ends up massively reducing worker take-home pay while denying workers the benefits they deserve.

The growing coalitions of drivers and other gig workers reject this ploy wholeheartedly. With the support of labor groups, gig workers have taken ownership of the anti-22 movement, leading phone banks and protests not only in California, but around the world. The companies they fight have stolen tips, refused to provide PPE to workers on the frontline, and knowingly put the jobs of hundreds of thousands of workers, 78% of whom are Black, Latinx, Asian, or multi-racial, on the line.

The growing gig worker movement teaches us that regulatory entrepreneurship succeeds or fails in the court of public opinion.

Gig workers, through massive organizing and years of protest, are showing the public that, at their core, regulatory entrepreneurs are motivated by profit. And whether or not Prop 22 passes, we can ally with workers as consumers and voters to reject wage theft and remove the lobby from the law.

You can find Allison at her Twitter, Medium, or Goodreads (she’s reading 100 books this year!).


🌀 microdoses

  • 🔌 Did someone say global connectedness?

💝 a closing note

There's a lot in Reboot 2.0 that's still being sorted out, so we're especially eager to hear from you. What kinds of events are you interested in? Got any great book recommendations? Just want to freestyle hot takes? Reply to this email (or put some time on my Calendly) to let me know what you think.

Also, check out Reboot’s new Twitter account 🤗 We’ll be live-tweeting events, sharing behind-the-scenes info, and more.

Thanks for listening,

—Jasmine & Reboot team

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