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Tags: uber | lyft | gdp

Gov't Rescue of Gig-Workers Could Drive Ride-Sharing Out of Business

uber and lyft

(Michael Vi/Dreamstime)

Jared Whitley By Wednesday, 15 July 2020 12:58 PM EDT Current | Bio | Archive

The biggest problem with mainstream, left-wing journalists is they so desperately imagine a perfect world they’re often incapable of seeing reality. Given that the higher purpose of the news industry is to just report the news, this is a major situation indeed; one even unwelcome, if not detrimental.

A trenchant example of this came recently from The New York Times, which has abandoned even the appearance of reporting facts, with their editorial "Uber Rides Cost More? OK." In it they argue that the solution to helping workers in the gig economy from being "exploited" is a heavy-handed piece of far-left California legislation, California Assembly Bill 5 (AB5).

The bill reclassifies independent contractors ("gig workers," like rideshare drivers for example) as employees, thereby requiring for them all the benefits that usually go with full-time work. Casually peppering their article with authoritarian terms like "force" and "compel," the The New York Times editorial board fatuously insist that, "The gig economy has become a part of our daily routines. But workers shouldn’t have to bear the brunt of a business model that works only when they are exploited."

This all sounds great – until someone looks at reality.

AB5 was sold as a worker-protection bill, but would create a taxation and regulatory bonfire that would make gig work in California virtually impossible. The gig economy is a critical part of modern life, and setting it ablaze wouldn’t warm up those The New York Times perceive as having been left out in the cold — it would burn all of us alive.

Upwards of 600,000 Americans work as rideshare drivers, feeding an explosive demand for the service. In 2015, 15 percent of the U.S. was ridesharing but by 2018 it was 36 percent. This growth has expanded into delivery services, with UberEats, GrubHub and DoorDash nearly doubling their footprint during COVID-19.

And that’s just rideshare — more than 57 million Americans work in the freelance economy in one way or another, worth $1.4 trillion a year the U.S. GDP.

This has provided a great way for people from a variety of walks of life to earn more money. Between being accepted to business school and when the school year started, I drove for Uber and Lyft rather than deal with the hassle of a short-term, full-time job.

Police, whose livelihood is threatened by disturbing current social trends, can work as freelance security in their off-hours. Low-skilled immigrants can quickly start making money, like in New York City, where nine out of 10 rideshare drivers are immigrants and 54 percent must provide the bulk of their family incomes.

While it might sound nice that the California State Assembly and The New York Times editorial board want to rush to the aid of these poor, disadvantaged gig-workers, the truth is legislation like AB5 is far more likely to drive them out of business.

According to a study from the Berkley Research Group, reclassifying rideshare drivers as employees significantly threatens both the viability of the companies that employ them and the income-earning opportunities these drivers depend on. This would create a "downward spiral in demand for app-based transportation services" which would slash the number of gig-employed drivers by 80% to 90%

So AB5 would kill rideshare services; putting them out of business.

Then there will be no one to bring The New York Times staff their late-night sushi or drive them home safely at night a necessity. 

The AB5 legislation would also hurt freelance journalists, like Larry Buhl who wrote for Business Insider that it would force him to "leave California just to work in my field," or Emma Gallegos who couldn’t qualify for a freelance-writing job because of onerous California requirements. Alisha Grauso told The Guardian that AB5 "keeps us from doing our job and takes money out of our pockets. No industry has been impacted as much as freelance writers because of the nature of our work."

Given the volatility of the modern media world, perhaps this is the very reason The New York Times wants legislation like AB5 contaminating economies everywhere across the country. If a dinosaur like The New York Times can sabotage independent journalists with a bad law, it can maintain its stranglehold on America’s eyeballs — thusly allowing the Times to continue bloviating every day that everything is racist, no matter how badly their business model is working out in reality.

If states like California — or similarly hopelessly blue New Jersey, New York, and Illinois — are going to stomp on gig workers’ lifeline, the Federal government will need to intervene to proect them. Gig workers need a federal regulatory standard. If Republicans stand up for the needs of this large, diverse group, they can appeal to this constituency as champions of both the worker and the broader economy.

And if they help send The New York Times to the trash, so much the better.

Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. Read Jared Whitley's Reports — More Here.

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Gig workers need a federal regulatory standard. If Republicans stand up for the needs of this large, diverse group, they can appeal to this constituency as champions of both the worker and the broader economy.
uber, lyft, gdp
Wednesday, 15 July 2020 12:58 PM
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