Reform of the Gig Economy A Wonderful Thing

The California legislature's passage of rights for gig workers is biggest blow against poverty in years

The passage of AB5, ensuring workers like drivers for Uber, Lyft, and DoorDash receive the legal status of employees in California, is the best thing to happen to low — wage workers in years. Authored by ferocious Assemblywoman Lorena Gonzalez, the law affirms previous regulatory and legal action in the state that found that gig workers are workers, not some new classification of people without rights.

Shockingly, California has the highest poverty rate of any state today. Gig jobs are part of this travesty. By rejecting the exploitative gig-economy business model, this victory is the most significant action against poverty, precarity, and homelessness in recent memory. Since drivers are very often people of color, the victory is especially sweet for fighters against discrimination.

In the coming days, we will be barraged by threats from Uber, Lyft, DoorDash and their flacks. Haters got to hate and Silicon Valley exploiters have to exploit. Lyft has been especially raw in trying to scare its drivers. The claims are insulting, but also a hoot to think about over your favorite libation, as they almost come with their own laugh track. What Alice saw through her looking glass is more real than their utterances.

Uber said it would refuse to follow the law, a stance it is now backtracking on after national derision. An Uber investor claimed that passage of AB5 will get rid of drivers, in place of autonomous cars. Tell that to Elaine Herzberg, who was killed by such a car in Arizona, cars that will not be ready for prime time for many, many years. And, while there are many more argumentative charades to come, Uber’s contorted legal claim that it is not a transportation company, but a platform company, and that drivers are not core to its business model, has led to guffawing across the land.

Given California’s unique role and stature, AB5 will resound around the globe. Even the business-oriented Financial Times lauded its passage. Why is it so important?

Silicon Valley’s gig revenue is often based on eviscerating the entire structure of protection for low-wage workers, thin as it is. Greedy companies have been licking their chops to turn all employees into “independent” workers, foregoing any responsibility for Social Security, unemployment compensation, or workers compensation. Costs are moved to workers and taxpayers. In Texas they are currently succeeding at convincing state officials that construction workers are “independent,” without rights or benefits. Other professions are in their crosshairs. The AB5 victory reverses the trend, which in construction will help protect immigrant workers who are routinely exploited on construction jobsites.

Collective action through unions is the best bulwark against exploitation at work. The victory is another repudiation of the “unions are dead” lie, accelerating their revitalization. Unions have problems, as the disgusting corruption scandal in the UAW shows. But, while liberals around the Kamala Harris campaign and discredited former progressives shilled for Uber, it was a coalition of established unions and new union formations in the driver community that won the day. Construction unions were the strongest labor supporters of these drivers. While they are often derided as primarily just white Trump supporters, construction workers are more and more Latinx.

Politically, AB5 should end the harmful lovefest between liberals and these companies. Gig companies pour money into non-profits and think tanks like the Aspen Institute to construct a narrative that their Future of Work is so bright we gotta wear shades. In 2015, anticipating AB5-type battles, gig companies helped put out a letter titled “Common Ground,” which was signed by a number of SEIU officials and foundation-funded liberals. The letter hailed the gig economy, buying into the lie that these workers are “independent” platform contractors. The gig companies knew exactly what they were doing then. Getting well-known liberals to sign on would bolster their fantastical arguments.

We can only hope that some who gave cover to gig exploiters have learned their lesson. While signers like former SEIU state president Laphonza Butler openly worked for Uber on AB5, most kept a low public profile. On Twitter, where gig workers across the country exalted following the Senate vote, Common Ground signers were embarrassingly quiet. Why? Money is the obvious answer. Many of these signers live off of foundation money and must be careful not to offend their paymasters. It is an open secret that foundations don’t like unions. Society must stop “demonizing the rich,” the head of the Ford Foundation told Artnet last week.” Common Ground signer, Uber ally, and former SEIU “thought leader” David Rolf, laid low. An especially sad case is the National Domestic Workers Association, whose leaders signed this letter, and went farther, awarding DoorDash, the cruel tip-stealing company, its “Good Work Code” status, a project it has now abandoned.

Hey, we all make mistakes. But it is time for these liberals conned by the devils of the gig economy to repent.

Fortunately the role of foundation money is getting greater scrutiny. While Ford Foundation money influences discussions of the “Future of Work” at Harvard’s labor center, at the other end of Mass Ave. in Cambridge, the MIT Media Lab is wrestling with its financial connection with the predator Jeffrey “Voldemort” Epstein and his dalliance with Gates Foundation money. Many of those who enabled Epstein are apologizing. Hopefully, after the AB5 victory, good-hearted liberals who provided cover for gig exploitation will change too.

Of course, the industries targeted by the gig companies can improve. Transportation is a real problem, and, many people, especially middle-class students and creatives, prefer to work a number of part-time jobs. But transportation’s problem is systemic and political, and part-time jobs have always been around. The Uber, Lyft, DoorDash claim that you can only fix these things if drivers have no healthcare or injury coverage and are unable to form a union is patently ridiculous.

The AB5 victory came from a Democratic legislative majority with a fervor to reverse the Trump agenda, pushed by a coalition of driver groups and the existing labor movement. For those who say that elections don’t matter or that worker action is dead, AB5 shows otherwise.

For those offended by poverty in America, AB5 is one of the best things to happen in a long, long time. 

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