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There was a dream that sparked the formation of companies like Uber, Lyft, GrubHub, and other early adopters of the “gig economy.” The dream was simple and elegant: Connect consumers with people willing to serve. Apps were created. Lifestyles were adjusted. The convergence of digital and mobile technologies had given birth to a way of doing business that hadn’t been possible before.
Today, California legislature moved to taint the basic premise of the gig economy by taking the “gig” out of the mix. They moved to force companies like Uber to accept those taking advantage of their service from the provider end as employees.
California lawmakers have sent the governor a bill that would give new wage and benefit protections to workers at so-called gig economy companies such as Uber and Lyft.
The 56-15 Assembly vote Wednesday marked a victory for labor unions and a defeat for tech companies that vehemently oppose the proposal.
Democratic Gov. Gavin Newsom has already said he supports it.
This flies in the face of why and how the gig economy was built in the first place. It treats gig workers as victims, as if they were forced to embrace the lifestyle and somehow need protections like indentured servants. And while many of these workers are celebrating the move, many will very likely find out the repercussions were not what they were promised by Democratic lawmakers.
There is no way companies like Lyft and GrubHub can continue to do business the way they’re currently doing it, nor at the costs they currently offer, thanks to this asinine legislation. It will force artificial raises in “wages” that were agreed upon by the workers in the first place. This will drive up prices to consumers, which will limit their usage. As fewer people call for an Uber, drivers will find their win was a great big loser for them.
But it’s a win-win for labor unions. It’s a win-win for Democrats. It’s a win-win for everyone other than anyone who uses the services or is employed by them.
In other words, the vast majority of Californians will lose as a result of this labor union victory.
This flies in the face of what the gig economy means to America. By inserting more government control, there will be repercussions felt by the companies, their users, and the workers who were supposed to benefit from this move.
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