Prop 22 and the Troubling Relationship Between Silicon Valley and Public Policy
Silicon Valley companies have grown into monoliths, valued at billions and powered by the top technologies. Unfortunately, that power can have a significant effect on labor rights, especially given the recent outcome of Prop 22.
Silicon Valley has been in the news a lot these days, but not in the ways they would like. The documentary The Social Dilemma exposes how social media apps are built to keep users addicted to their platforms. Google was also sued by the Department of Justice over anti-trust issues. Major tech companies are in the crosshairs as users reexamine the amount of power and influence they have in our lives. That influence is even harder to handle considering the gig economy’s rise through apps like Uber or DoorDash.
One avenue where app companies luck turned around was in the outcome of Proposition 22. Prop 22, also known as App-Based Drivers as Contractors and Labor Policies Initiative, was a California ballot question in the recent election. This ballot question decided if app-based drivers would be considered as independent contractors and not employees. By reclassifying these drivers as contractors, companies like Uber or Lyft can avoid having to provide drivers benefits like healthcare or paid sick leave.
Those for Prop 22 contend that the shift to employee status would not allow drivers to take on independent work. They also argue that the passing of Prop 22 will save thousands of California jobs and reduce the cost of these services. Those against the passing of Prop 20 argued that it allows for drivers to miss out on benefits while the companies continue to exploit them. A major argument from the No on Prop 22 campaign was dollar value spent on the ballot question.
This singular ballot question made history as the most expensive in California’s history, with over $200 million spent by the Yes campaign. In addition to Uber and DoorDash, Lyft, InstaCart and Postmates also provided funds for the campaign. Along with the standard means of campaigning, Uber went as far as to send out reoccurring Yes on Prop 22 notifications. DoorDash would even make their drivers deliver food in Yes on 22 takeout bags. Between the price tag and less than honorable means of campaigning, this presents a troubling future for the sway Silicon Valley has on public policy.
Big tech companies have a frequent history of skirting laws and finding ways to screw over their workers. Back in 2017, Uber was fined $20 million by the FTC for exaggerating how much prospective drivers could make. DoorDash was recently fined $2.5 million for taking tips from drivers.
For what it is worth, all those dollars paid off. Prop 22 passed, and immediately the stock prices for the companies involved went up. Now that California drivers will be classified as independent contractors, these companies can avoid paying minimum wage as they continue to make billions. Drivers will receive some benefits, but not as much as if they are considered employees. With this win under their wings, it is no doubt that these companies will make attempts to pass legislation in their favor in other states. Especially given how much of our transportation or food delivery revolves around these apps, they continue to control our lives.
The passing of Prop 22 is not the only way Silicon Valley has worked their influence into politics and public policy. Google has increased their lobbying spending as their antitrust case against the federal government made head. Facebook has been routinely criticized for their influence on the 2016 and 2020 election as more and more people get their news through their platform. Big tech companies made major campaign donations to the presidential campaigns of Cory Booker and Pete Buttigieg, which presents a conflict if they have a position in the incoming Biden administration.
Silicon Valley, and the tech companies that inhabit it, will continue to use their power and money on our political system. Instead of the usual means of lobbying to buy influence, the game is through paying for legislation to get your wish.
The obvious solution to this problem is to get money out of politics and regulate these companies from expanding their influence. That is quite a challenge given they can use their power to stop any form of regulation, but it will need to happen if we are to see positive change in the future. Given the incoming Joe Biden administration, it is not clear what relationship Biden will have with Silicon Valley. While there are possibilities of a shift in the winds, there is always the possibility of a continuation of Obama-era policies. Silicon Valley will at least benefit from not having Trump in office, as he has had an antagonistic relationship in the aftermath of the election.
As we reexamine our relationship with big tech companies, many are seeing that they are pushing the limit on the control they have over our lives. However, deleting Uber from our phone will not stop the incoming wave of control they will have on our political systems. If they are not dealt with in a major way through regulation, we will continue to be crushed under their might.
References:
“California Proposition 22, App-Based Drivers as Contractors and Labor Policies Initiative (2020).” 2020. Web. 12 Dec. 2020.
Crowley, Chris. “DoorDash Will Pay $2.5 Million in Tip-Skimming Settlement.” Grub Street. Grub Street, 25 Nov. 2020. Web. 12 Dec. 2020.
Gangitano, Alex. “Tech Industry Cash Flows to Democrats despite 2020 Scrutiny.” The Hill. The Hill, 19 Dec. 2019. Web. 12 Dec. 2020.
Madrigal, Alexis C. “What Facebook Did to American Democracy.” The Atlantic. Atlantic Media Company, 16 Nov. 2017. Web. 12 Dec. 2020.
Nieva, Richard. “Google’s Antitrust Battles: Here’s What You Need to Know.” CNET. 29 Nov. 2020. Web. 12 Dec. 2020.
“No on Prop 22: BY App Companies, FOR App Companies.” No on Proposition 22 California. 2020. Web. 12 Dec. 2020.
O’Brien, Sara Ashley. “Prop 22 Passes in California, Exempting Uber and Lyft from Classifying Drivers as Employees.” CNN. Cable News Network, 04 Nov. 2020. Web. 12 Dec. 2020.
Paul, Kari, and Julia Carrie Wong. “California Passes Prop 22 in a Major Victory for Uber and Lyft.” The Guardian. Guardian News and Media, 04 Nov. 2020. Web. 12 Dec. 2020.
“Uber Agrees to Pay $20 Million to Settle FTC Charges That It Recruited Prospective Drivers with Exaggerated Earnings Claims.” 23 Jan. 2017. Web. 12 Dec. 2020.
“Yes on Prop 22 — Save App-Based Jobs & Services.” Yes on 22. 2020. Web. 12 Dec. 2020.
