Posted November 06, 2020
By Ray Blanco
The Glossed-Over Election Win Catching the Eye of Big Tech
Its hard to look past this weeks crazy election proceedings.
States are lighting up blue and red, with both sides confident that theyre going to win.
But the decision between Trump and Biden wasnt the only thing voters found on their ballots this election season.
In California, Americans voted on Proposition 22 the most expensive ballot measure in the states history.
The proposition was to allow gig companies like Uber, Lyft and DoorDash to classify drivers as independent contractors instead of employees.
Uber has argued time and time again that drivers are not a part of its core business and that it is a tech company NOT a transportation company.
That distinction is what Ubers entire business model is based on, so Im not surprised it was willing to pump so much money into getting Prop 22 passed.
Personally, Im on the side of less government involvement in private companies Id rather let the public decide whether or not they want to drive for Uber.
Californians ultimately agreed and voted yes on the measure a big victory for companies like Uber.
But ride-hailing players arent the only ones with skin in the game. I think that Silicon Valley noticed the win and may just use this new amendment to the law to their advantage
Ubers Changing the Rules
While I am fundamentally on the side of Prop 22, I couldnt help noticing some of the language Uber used if the measure did not pass
Essentially, Uber argued that unless it drastically changed its business model, it couldnt handle the cost of classifying its drivers as employees and the benefits that came along with that.
It was a smart, if not a bit threatening, play on Ubers part
Do you bankrupt a company or force them to lay off massive amounts of people? Or do you let drivers decide for themselves how they want to proceed? The choice for Californians was obvious.
And if it works for Uber
Why couldnt other tech firms give it a try?
Gig companies just proved that you can shape state law to your advantage and by doing so, gave a roadmap of sorts to those watching in Silicon Valley.
Uber clearly needs this cost-cutting to even stay above water. Its yet to reach profitability and many question its ability to EVER get over that hump.
But other tech companies are eyeing their roads to profitability as well and if cost-cutting and lawmaking can get them there, theres no doubt in my mind theyll take it.
It could mean big moves in some of our favorite tech names in 2021 as they craft how best to take advantage of these new developments.
And Ill be keeping an eye out seeing how this all goes down in the tech world
Onward and upward,