GIG Companies Dominate Labor-CA Ballot.

Bloomberg Businessweek November 9, 2020 pp20 “Uber scores a victory” “California voters passed a proposal by app-based companies to keep drivers as contractors” image source

A California ballot measure, backed by Uber, Lyft and others that use drivers and other workers as independent contractors rather than employees, passed with 58% of the vote. This vote has indirect implications for the GIG-economy with “lawmakers in Illinois, New York, and elsewhere as these governments consider greater labor protections for the growing ranks of gig workers.” Some gains for these contractors did result from the California mandate including “...minimum pay while riders are in drivers’ cars and health-care subsidies” potentially increasing Uber’s labor costs by 5% according to Morgan Stanley.

“Labor groups and other critics say it allows companies to deny drivers their right to substantial benefits and wages.” Reportedly corporate supporters Uber, Lyft, DoorDash, Instacart, Postmates and others spent $206M or ten-fold more than the opposition to carry this initiative. This amount of campaign spending, of course, is only a small fraction of what supporting traditional wage and benefits would cost. William Gold, (Stanford University Law Professor and former chair of the National Labor Relations Board under President Bill Clinton), commented that “These companies are the new robber barons, and they’re using the system to establish a privileged status for themselves.” Realistically reversing course would require a new ballot measure.