California Prop 22

[viscousmemories]

Sam interviewed the author of this article on Majority Report today.

This could go in the Momo-Fukuber thread but I don't want to let the others off the hook.

tl;dr - Uber, Lyft, DoorDash, and Postmates have poured $200 million dollars into promoting Prop 22 in California (Roughly 10x the amount that the anti-22 campaign has raised) in an effort to avoid having to treat their employees like employees, which has broad implications across industries and the country.

[JoeP]

Democracy Plutocracy

[Ensign Steve]

Yeah, the Yes on 22 ads are playing constantly on the TV, and they are SOOO misleading. It's like Prop 8 all over again, literally saying the opposite of what it does.

[SR71]

Right up there with right to work.

[LarsMac]

When I was working in similar activities, years ago, I liked being a contractor, rather than an employee.

Of course that was years before Uber and such, and life was much simpler then.
When I was looking into Uber, the idea appealed to me, precisely because it would be a contractor relationship. The deal fell through because they didn't want me using my 12 year old Lincoln Town car.
Having to buy a newer car was a show-stopper for me.

[ChuckF]

I have unpopular opinions on this topic

[viscousmemories]

My breath is bated.

[JoeP]

Originally Posted by ChuckF

I have unpopular opinions on this topic

Unpopular with vm, or unpopular with the 1%?

[ChuckF]

Probably everybody? Basically, AB5 tries to solve the problem of exploitative gig economy work, apparently deciding as a matter of policy that the damage it does to bona fide freelancer/consulting is merely acceptable collateral damage. (For example, if my client has the choice between contracting with a consultant located in California or one located in North Carolina, I am probably going to pick the one in North Carolina just to avoid the risk of being the test case for choosing the wrong one out of many categories of workers who are exempted, or incorrectly applying the tests for professional services without any legal precedents to guide.)

Fundamentally, the reason that the gig economy is exploitative is that there are too few people with good jobs. Uber and Lyft etc. can pay so little because the value of the labor is low. This has the beneficial effect of increasing access to services and reducing cost to everyone (including low-income people who may not otherwise have easy access to these services) and the deleterious effect of making gig workers vulnerable to exploitation.

The reason that AB5 is a thing is that before the Dynamex decision, gig workers were - or at least very plausibly probably were - independent contractors under the then-prevailing standard. Dynamex and AB5 changed the standard. But I think AB5 is the wrong approach because it doesn't actually fix, or even really try to fix, the underlying problem of a glut of undervalued labor being available for (and depressing the value of) gig work. The only thing is really seems to do is change math for gig platforms.

Here is what I mean: I am Uber. 10% of my business is from California. If the cost of complying with AB5 is less than that 10%, it is worth it to comply (assuming this doesn't have knock-on effects in other jurisdictions, which it almost certainly would). If it is greater than or equal to that 10%, it is not worth it. It is much cheaper to pay a contractor than it is to pay an employee, so I will probably replace a lot of contractors with a few employees and reduce service offerings. In the meantime, I will use a lot of resources to try to minimize the cost of that compliance, including using a lot of resources to push for an exemption like a lot of other industries received. If I can't, I should just pull out of California. That seems like a poor outcome for consumers who lose access to lower costs for services and for gig workers - who haven't seen the value of their labor increase at all.

There are also gig workers who are not being exploited and actually do want the flexibility afforded by independent contractor work. For example, if I retire and want to do part time consulting for my former employer while my replacement learned the role, can we even do that? Would they have to re-hire me as an employee and would that fuck with my retirement? Maybe AB5 has a clear answer for that and I don't know it - I am not an employment lawyer. But I DO give a lot of advice on consulting agreements, and I would have to take that into account before advising anybody to enter into what is normally a pretty routine post-retirement arrangement.

Basically, it seems like AB5 is trying to wish the benefits of employment into existence without acknowledging or addressing the reasons that it is so easy to exploit independent contractor relationships. And it does so in an oddly anti-innovative way. Uber and Lyft and Doordash and all those awful apps are already here and have people working. AB5 puts up barriers that new companies will have a hard time clearing, especially if they are in sectors that don't have access to an exemption under AB5 or the resources to lobby for one, like Prop 22.

The main thing AB5 may have going for it is that it's in California, and other states may follow suit, so it may wind up having broader effects in a way that incentivizes broader changes. But that is equally likely to just increase compliance costs to the point that the gig economy stops functioning at all. It seems like a better solution might be just to tax individual transactions to fund unemployment insurance and other state-provided benefits for gig workers, but that is not really going to cut it for FICA etc. I don't know the answer, but I know that Uber and Lyft care about the math and only the math.

[Oxymaroon]

I can see why that might be an unpopular view.
The last thing most people want to hear is: "It's not that simple."
But it hardly ever is....

[viscousmemories]

Originally Posted by ChuckF

many words

That's a compelling argument against AB5, but how should that impact ones decision on how to vote on Prop 22? This is all academic to me since I'm not in California and don't as a contractor, but it's an interesting dilemma to me. It seems like you might vote 'yes' on Prop 22 to weaken AB5, but practically speaking wouldn't that only benefit the behemoths while still leaving all the little guys with the worst parts of AB5? And wouldn't that also undermine any potentially positive impacts of AB5 spreading outside of California?

[ChuckF]

I don't live or vote in California either. If I did, I would probably vote yes on Prop 22 to keep Uber and Lyft operating in the California market. I think that, on balance, the benefits of having more people earning some money driving for them coupled with maintaining access to these options for low income or disabled people who may not otherwise have a lot of options outweigh the harm of their business model. Like I said, the reason that the business model is exploitative is that there is a lot of low-cost labor available because people don't have a lot of alternatives. That sucks, but that is how it is in an unequal society. AB5 is filled with holes for other industries. Companies with workers doing commercial fishing are a lot more dangerous than driving for Uber, but they don't have to comply. Neither do newspaper comics, as long as they only get 35 cartoons from one cartoonist in a year. After the 36th, they do - once again, giving industry a guidebook to do the math. If it's ok to exploit a freelance writer 35 times a year, how many Uber pick ups are ok?

I'm not convinced that AB5 propagating outside of California is necessarily positive, either, and I think a lot of states would find the policy implications troubling. Seems like the best way to regulate an abusive industry is to regulate the industry, rather than distorting a lot of other arrangements while hoping that Uber is going to start employing its drivers, which is objectively absurd. The taxing power can be used more surgically. California isn't usually shy about that.

[LarsMac]

I used Uber quite a bit the last couple years I was working, and got to know a couple of the local drivers. In Colorado, most seem content with the arrangement.
Many drivers sign up for both Uber and Lyft.
They can pick the ride request to which they respond, and up to the point the fare actually enters their vehicle, they can change their mind. As an employee, that could be a show-stopper.
They use their own vehicle. As an employee, can they receive compensation for fuel? Who pays the maintenance on my vehicle if I am an employee?

Part of the issue is liability, of course. Insurance can be a big part of it as well.
My insurance company would charge me much more if they see that I am hiring out my car for Uber. Who pays that if I am an employee?

The same kind of arrangement would apply to over-the-road truckers. The pay scale is much different for owner-operators than for employees.
O/Os pay their own insurance, license fees, and State permits.
Employees drive company vehicles, licensed and maintained by the companies.

AB5 sounds like it was trying to fix something that may not have been broken.

[JoeP]

Originally Posted by viscousmemories

such lawyer

[ChuckF]

Originally Posted by LarsMac

I used Uber quite a bit the last couple years I was working, and got to know a couple of the local drivers. In Colorado, most seem content with the arrangement.
Many drivers sign up for both Uber and Lyft.
They can pick the ride request to which they respond, and up to the point the fare actually enters their vehicle, they can change their mind. As an employee, that could be a show-stopper.
They use their own vehicle. As an employee, can they receive compensation for fuel? Who pays the maintenance on my vehicle if I am an employee?

Part of the issue is liability, of course. Insurance can be a big part of it as well.
My insurance company would charge me much more if they see that I am hiring out my car for Uber. Who pays that if I am an employee?

The same kind of arrangement would apply to over-the-road truckers. The pay scale is much different for owner-operators than for employees.
O/Os pay their own insurance, license fees, and State permits.
Employees drive company vehicles, licensed and maintained by the companies.

Yep, and I think AB5 is still stayed from being enforced against trucking companies.

FWIW, owner-operators are also getting screwed all the time for a lot of the same reasons that Uber/Lyft drivers get screwed. The business is shifting and tech is driving costs down, and a lot of the efficiencies are at the expense of workers.

Obviously California can't do it on its own, but a civilized healthcare system that doesn't enslave workers to employers for healthcare would go a long way towards fixing the underlying unbalance.

[JoeP]

Uber bought itself a law. Here's why that's dangerous for struggling drivers like me | Cherri Murphy | Opinion | The Guardian

We can’t let them. In California, one of the world’s wealthiest economies, I should be able to afford rent and pay my bills as a driver. I shouldn’t be forced to scour for public bathrooms or work 70-hour weeks to do this job. But that’s what these companies have forced upon us.

Uber may have bought itself a law, but it has not bought itself reprieve. All labor has dignity, and driving for Uber or Lyft should be no different.

Cherri Murphy is a social justice minister and Lyft driver based in Oakland, California. She is also an organizer with Gig Workers Rising.

[ChuckF]

Originally Posted by JoeP

Would be nice to show one's work here.

[fragment]

Originally Posted by ChuckF

Would be nice to show one's work here.

Yeah, it's not like it was linked in the quoted article or anything.

[ChuckF]

Yeah, I saw that, but I don't see how that supports the conclusion that "I should be able to afford rent and pay my bills as a driver." Where does that understanding come from? Certainly not from the Berkley calculations you just linked to - those seem to suggest that one should NOT drive for Lyft to afford rent and pay bills, don't they? They suggest that one could earn quite a bit more by working a minimum wage job in California at $12.00/hour.

I note that the author is also a social justice minister and an organizer with Gig Workers Rising. Do those jobs not pay minimum wage?

[Kyuss Apollo]

When scrolling down the page to the careers portal on the Gig Workers Rising site, there is no "Careers" link. Lots of projects happening, and it is a non-profit so maybe there's a director that makes a salary but no apparent paid positions and they aren't looking for hired help.

A social justice minister could make more than $12 an hour if they got hooked up as director of some program or other but those seem to me like pretty competitive jobs to land and there's also a lot of volunteer positions as well.

So the quick 5-minute internet search answer is probably not.

[ChuckF]

Huh. That's seems odd, doesn't it? I wonder why people shouldn't be able to afford rent and pay bills as a social justice minister or organizer? Especially in California, one of the world’s wealthiest economies.

[fragment]

You're being obtuse, Chuck. You know very well that:

1) "I should be able to pay basic expenses with my work" is a statement about how the economy ought to work and is different in kind from "I should work the best paying job" which is a statement about practical personal decision making

2) The economy doesn't magically come up with minimum wage jobs the instant people want them

3) People often do some things, like organising and ministering, because they feel satisfying or necessary, rather than for payment, but driving for ride-shares is rarely one of those activities

You may well disagree with the the notion that work should be rewarded at a level sufficient to meet basic needs, so let's discuss that rather than the smokescreens, huh?

[ChuckF]

Originally Posted by fragment

You're being obtuse, Chuck. You know very well that:

1) "I should be able to pay basic expenses with my work" is a statement about how the economy ought to work and is different in kind from "I should work the best paying job" which is a statement about practical personal decision making

Did someone somewhere say "I should work the best paying job?" I might have missed that. Though maybe it's not the worst idea if worried about meeting basic expenses.

Should one be able to pay basic expenses with any type of work at all?

2) The economy doesn't magically come up with minimum wage jobs the instant people want them

True, very true. That's a big reason that I think AB5 is bad policy.

3) People often do some things, like organising and ministering, because they feel satisfying or necessary, rather than for payment, but driving for ride-shares is rarely one of those activities

Also absolutely true. Also, people often do some things to earn a little extra money, and not to earn a living - like maybe, driving for ride-shares, or playing a music gig, or consulting. Or all the stuff I talked about earlier in this thread that gets swept up into AB5.

You may well disagree with the the notion that work should be rewarded at a level sufficient to meet basic needs, so let's discuss that rather than the smokescreens, huh?

I don't disagree with that at all! Actually, I spent a fair amount of time talking about it already in this very thread. Like when I said:

Basically, it seems like AB5 is trying to wish the benefits of employment into existence without acknowledging or addressing the reasons that it is so easy to exploit independent contractor relationships. And it does so in an oddly anti-innovative way. Uber and Lyft and Doordash and all those awful apps are already here and have people working. AB5 puts up barriers that new companies will have a hard time clearing, especially if they are in sectors that don't have access to an exemption under AB5 or the resources to lobby for one, like Prop 22.

Or when I said:

I think that, on balance, the benefits of having more people earning some money driving for them coupled with maintaining access to these options for low income or disabled people who may not otherwise have a lot of options outweigh the harm of their business model. Like I said, the reason that the business model is exploitative is that there is a lot of low-cost labor available because people don't have a lot of alternatives. That sucks, but that is how it is in an unequal society. AB5 is filled with holes for other industries. Companies with workers doing commercial fishing are a lot more dangerous than driving for Uber, but they don't have to comply. Neither do newspaper comics, as long as they only get 35 cartoons from one cartoonist in a year. After the 36th, they do - once again, giving industry a guidebook to do the math. If it's ok to exploit a freelance writer 35 times a year, how many Uber pick ups are ok?

The author of that particular piece says that she "should be able to afford rent and pay my bills as a driver." I just didn't see any explanation as to why that is true? As you correctly say, the economy doesn't magically come up with minimum wage jobs the instant people want them. She seems to think they can be wished into existence - but I agree with you that she's probably wrong.

The fundamental issue isn't really about the gig economy at all. It's that the value of unskilled labor is low and falling. That's why I said:

Obviously California can't do it on its own, but a civilized healthcare system that doesn't enslave workers to employers for healthcare would go a long way towards fixing the underlying unbalance.

[Kamilah Hauptmann]

(Not calling anyone out here.)

A couple base assumptions I hold:
Certain jobs as necessary for society to function, eg. food prep, janitorial, crop harvesting.

Regarding human resources to do that job as a maintenance issue to keep operating. Pay the workers or they will eventually stop working efficiently or break down entirely.

Excess supply of workers skilled in their jobs*, redundancy, and cross-training are hedges against breakdowns in the orderly operation of society. And thus, the JIT and efficiency at all costs model of business is too fragile for orderly society. (Hello pandemic and a society that treats humans as replaceable parts.)

*Yes, I just said someone skilled in their work is a skilled worker, university degree or entirely uneducated alike. Calling the Mexicans out in the fields busting their asses unskilled could be part of the reason it's hard to get a white dude to do a job that's 'beneath' them. But there's a whole rant there about hierarchy vs egalitarian.

Cringing and pressing post.

[ChuckF]

Completely true. That's why I think AB5 is the wrong tool - it just becomes another variable in a math problem for gig platforms, without actually addressing the circumstances that make underused labor vulnerable to exploitation. So it destroys the benefits of efficiency (which can disproportionately affect those least able to afford it) and threatens the income it does provide to the people who use it. There's no backstop to fix the damage, or even a plan to stimulate one. Better in the meantime to change the math problem with a more precise tax solution, to extract resources the state can directly use, I think.

Basically, it's an obscenity that a society with this level of wealth can tolerate this degree of inequality. Universal basic income is one of the better ideas I've heard to address it, but that is a tall, tall order. Universal healthcare would be a start.

Also lol it's not hard to get white dudes to take agricultural jobs because it's beneath them, it's hard because those jobs are fucking hard. There was a good Planet Money a couple months ago about trying to get local workers to come in an help with harvest. Basically they destroy all the produce because they don't know what they're doing and then don't come back because it's too hard.