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Billionaires Tricked Us Into Voting for a Serfdom

Uber, Lyft and Postmates’ Prop 22 will fundamentally reshape how labor is negotiated — and exploited — in this country

For months, Californians have been under siege by political ads begging voters to say Yes on 22 — a proposition that would keep drivers for apps like Uber, Lyft and Postmates listed on the books as “independent contractors,” rather than traditional employees.

Ads in newspapers. Ads in the mail. Ads on every local TV station, playing at every ad break. Ads via billboards. Ads via the apps themselves. The blitzkrieg of reminders no doubt left an impression, given how they hammered the same points over and over again: that a majority of drivers wanted to remain contractors, because of the flexibility it gave them; that Prop 22 would provide all the essential employment benefits; that any other way would mean the end of Uber.

In reality, only one of those points really rings true. The survey methods for the claim that a majority of drivers support Prop 22 were suspect. The benefits provided under the ballot initiative pale in comparison to the legal protections given to traditional employees. But giving tens of thousands of drivers access to health care, a living wage and insurance protections would cost hundreds of millions for companies like Uber and Lyft to implement.

So what did they do?

Calling it a life-or-death battle, they started a petition to create a ballot initiative, and then spent a state record-breaking $205 million to support it. The assault worked. Prop 22 passed today with a stunning 58 percent of the vote. It will fundamentally, and likely permanently, reshape how labor is negotiated in California — and the rest of the country, too.

What we’re witnessing is the coronation of a new kind of economic serfdom that strips workers down to their body and their time, with no need to provide tools of the trade, stability or upward mobility. We stood by as the myth of the young, educated, empowered part-time Uber driver withered away into the truth: that many gig economy “contractors” work full-time hours for app-based companies, with little flexibility or freedom in their day-to-day schedules. The rideshare industry is constantly looking for fresh blood, and why? Because so many people give up on it after realizing that they can’t make ends meet in the shadow of an exploitative model.

The California legislature tried to address this rising trend in labor by enacting a law dubbed AB-5, which intended to fix the “misclassification” of many full-time employees as contractors by various industries, chiefly rideshare. The problem was that AB-5’s overly broad design ended up being a small disaster, affecting all kinds of freelance workers (journalists, photographers, performers) and putting their wages at risk.

Sensing weakness in the law, Uber and Lyft, along with a coterie of related app-based companies like Postmates and Instacart, decided to attack AB-5 through another method: the petition-based ballot initiative. California’s ballot initiative law gives significant power to the people, as pretty much any issue can end up on a state election ballot if a campaign can generate enough signatures. The problem is that getting those signatures, and then running a statewide campaign, costs money — and your reach grows with every additional dollar in the coffer. Uber and co. had the money, and they spent it in every way possible.

Because this is America, that plan also involved heavy doses of deception. Uber et al hired PR firms to create political mailers that look like voter guides from nonexistent progressive organizations, adding labels like “Feel the Bern, Progressive Voter Guide” and “Our Voice, Latino Voter Guide” to the mailers. The campaign donated $2 million to the California Republican Party, while also stacking its ranks with consultants and lobbyists known to have repped the tobacco industry. They went after labor activists and critical academics, such as Veena Dubal. Drivers, meanwhile, were reminded constantly that they needed to support Prop 22, otherwise potentially lose their jobs; naturally, these reminders came via the apps they used for work. The intrusive messaging has pushed a group of drivers to sue Uber over breach of state laws on employers pushing political campaigns.

“I can’t rule out that employers have engaged in coercive tactics like this in the past, but I have never heard of an employer engaging in this sort of barrage of coercive communications on such a broad level, ever,” David Lowe, a partner at law firm Rudy, Exelrod, Zieff & Lowe, told the New York Times. 

Meanwhile, when you inspect the purported benefits of Prop 22 for drivers, you start to see deliberate holes placed everywhere, as in the plan’s so-called wage guarantees. Uber and co. claims that the law will ensure drivers are paid 120 percent the state minimum wage of $13, plus 30 cents per mile. That sounds pretty good, until you notice the caveat that this is only for “engaged driving time” — literally just the time spent driving a customer, not the time between rides. Factor that in, plus the vehicle maintenance and fuel costs you have to cover as an “empowered” contractor, and you’re left with take home pay of $5.64 an hour, as estimated by the U.C. Berkeley Labor Center.

It’s no surprise that despite Uber and co.’s statement that a majority of drivers support Prop 22, the odds are high that the result was affected by misleading language. And so we see it again: a direct democracy victory that was guaranteed largely by the force of smoke, mirrors and $200 million, rather than an earnest look at the future.

Fundamentally, the fight over the gig economy isn’t about a new group of freelancers — it’s about the shift and collapse of conventional long-term employment patterns. We know that unstable jobs have devastating impacts on long-term economic success, as well as mental and physical health. Yet thanks to an adulatory tech media and a credulous public, we all ended up praising a robbery as a revolution. Gig companies waved their low prices in our faces until mainstream America convinced itself that Uber and Lyft were worth not just economic support, but political approval. Nobody, not even regulators, really cared that rides were only cheap because of a business model that strips rights from workers, plus reams of venture capital.

Then the pandemic happened, and what did we find? Tens of thousands of Uber and Lyft drivers, seeking unemployment but unable to get any benefits because their employers never paid into the state fund. In light of that context, the passage of Prop 22 becomes the worst kind of harbinger. It’s a sign that things have gotten too bad to fix. How ironic that despite Uber and Lyft being two publicly traded companies “worth” more than a combined $70 billion, they have never turned a profit. They lose billions each year, and for what? So that we can collectively prop up the serfdom while acknowledging that the gig economy might be unsustainable?

I think Congresswoman Barbara Lee perfectly captured the grossness of the whole endeavor in a public call last month: “You have very clearly crossed the line when you try to claim the equity mantle for a campaign that has always been about allowing multibillion-dollar app companies to write their own law so that they can keep exploiting the labor of drivers, eight in 10 of whom are people of color,” she deadpanned.

Worse yet, by design, Prop 22 is nearly impossible to overturn. It’s immune to reforms from the local level, too, meaning cities can’t implement their own policies to help drivers. This is the bleak truth of direct democracy in a system where money speaks more loudly than data, truths, and even stories of back-breaking loss.

Uber, Lyft and other gig-economy companies will likely look to Washington, D.C., for their next campaign. They don’t want to litigate this state-by-state. The playbook for them is clear — and now, labor activists have a lot more territory they have to win back.

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