Uber has revolutionized the transportation industry, created a gig economy for part-time flexible employment, and improved the lives of millions of Americans.
So naturally, left-wing California state politicians want to kill the company off once and for all.
California State Assembly Speaker Anthony Rendon described the gig economy in bleak terms: “When you hear about folks talking about the new economy, the gig economy, the innovation economy, it’s f—king feudalism all over again,” he said. Rendon’s colleagues share his contempt: A new bill targeting supposedly exploitative ride-sharing companies such as Uber has passed the State Assembly and a State Senate labor committee, inching its way toward passage. The bill would codify a court decision to reclassify Uber and Lyft drivers from contractors to employees, mandating substantial business killing expenses (mostly involving wages, benefits and workplace regulations) that the gig economy specifically evolved in order to avoid.
This bill’s passage would probably put Uber and Lyft out of business in their hometown of San Francisco. This would leave not just California but potentially the entire country worse off. It would certainly hasten the exodus of California’s middle class, perhaps just in time to cost the Golden State a seat in Congress.
Uber and Lyft have vastly improved the average person’s quality of life. Gone are the days of hunting down a taxi or drowning in paperwork to get an expensive rental car. A chauffeur service is now available at the touch of a button. And affordable “pool” features allow riders to share a ride with others and get around the city for dirt cheap prices.
Plus, part-time drivers have flexibility and opportunity never previously available in the taxi industry. Neither Uber nor Lyft is currently profitable, and one of their biggest financial challenges is their already-steep labor costs. This bill would turn their budget headaches into financial disaster.
According to MarketPlace, “if [the bill] were signed into law it would add an estimated $500 million in expenses a year for Uber, $300 million a year for Lyft.” Marketplace also quoted one Columbia University business professor, Leonard Sherman, who said the bill would “attack any possible path to profitability.” Put simply, these companies just can’t afford to treat part-time contractor drivers as employees.
California is trying to “protect” these workers from making a living. After all, Uber is already experimenting with driverless cars. It’s almost guaranteed that a huge spike in labor costs would prompt the company to double-down on its efforts to phase out drivers altogether. Plus, workers might lose part-time flexibility or the ability to switch interchangeably between driving for both Uber and Lyft, a common practice right now.
Who would that help?
Well-intentioned big government blowhards may think they’re helping workers by intervening, but they’re actually just going to mess up an industry that has been propping up California’s economy. Voters won’t appreciate it, either. As the Las Vegas Review Journal’s editorial board put it, “California millennials who embrace socialism while enjoying the conveniences created by capitalism are about to get a rude awakening.”
A rude awakening indeed. This latest bill targeting ride-sharing is just another reminder that California seems intent on hampering the innovation that’s kept the state afloat up to now. Let’s just hope that the rest of America doesn’t also suffer the consequences.
