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AB-5 was drive-by shooting legislation; Prop. 22 will let the intended target get off scot free
dennis Wyatt web
Dennis Wyatt

Forget about the Grinch.

If anyone steals the Christmas tradition of visiting in-person with Santa this year it’ll be COVID-19 and Assembly Bill 5.

The legislation created by Assemblywoman Lorena Gonzalez is a precautionary tale of how lawmakers that wield great power over the day-to-day lives of Californians have a nasty tendency to approach fixes or issues not as precision brain surgeons but instead as if they were channeling Lizzie Borden.

You’ll be hearing a lot about Assembly Bill 5 in the coming days when you will be asked to decide the fate of Proposition 22 in the Nov. 3 election that you will be able to cast your votes in as early as next week. Remember the good old days when voting in a November election did not start on 100-degree days and the prospects of a winner being determined would happen before Easter?

Gonzalez, in her defense, was trying to right what she believed was a perceived wrong. Uber, Lyft, and Door Dash wanted to have it both ways. They wanted independent contractors that they didn’t have to invest in providing the equipment, health insurance, or payroll taxes that old school business had to pay that adds 25 percent to the cost of a typical employee. At the same time, they not only wanted to dictate various aspects of their work schedule but prohibited them from working for the competition as if they were regular employees.

Lawmakers, whether they meant to or not, drank the Kool-Aid. The politically correct line about the gig economy when they passed AB-5 was that it was an aberration created by Uber et al to prey on vulnerable Californians. Not only have a large share of the drivers that the legislation was designed to emancipate from the gig economy say they aren’t appreciative of being freed from the shackles of being an independent contractor but the “cure” took out unintended targets such as independent truck drivers that were faced holding the bag on truck loans of up to $200,000 to others such as department store Santas.

While pandemic restrictions may make it impossible for kids to sit on Santa’s knee even if the jolly old guy is wearing a hazmat suit, AB-5 threatens to make the American tradition of Santas in retail locations too expensive for brick and mortar stores slammed by all sorts of economic challenges including the 900-pound gorilla in the room — online shopping.

But then again between COVID-19 and on-line shopping decimating in-person retail, perhaps Christmas Future is FaceTime with St. Nick.

Yes, there have since been some carve-outs made for independent workers and other businesses that were collateral damage in Gonzalez’s myopic assumption that nothing mattered — or existed — except for those grieved ride share drivers she sought to help.

And while Gonzalez herself is not responsible for creating the original sin, the house she legislates in is.

Uber, Lyft, Door Dash — and virtually every other darling disruptive economy tech firm that politically correct politicians cherish — have not provided brand new products per se when it comes to delivering food and selling items as they rolled out glitzy tech baubles. Lawmakers have been complicit with allowing Uber et al break everything from regulatory to labor laws and ask repentance later or to operate until such time they can change the rules to make themselves legal.

If Uber or Lyft has taken advantage of employees it’s only because the Dr. Jekyll and Mr. Hyde act more than a few lawmakers, constitutional officers from the attorney general to the governor, as well as regulatory agencies have engaged in over the years. The same people that hammered old school firms into submission with regulations gave the tech disrupters the key to California.

And they did it because the tech firms were showering them with money, lots of money. It’s not campaign contributions as much as it has been tons of capital gain taxes that have allowed lawmakers the currency to not make hard decisions and to divert the equivalent of the gross national product of a Third World country into their pet taxpayer financed causes.

Those capital gain windfalls often come from companies that have diverted billions that once flowed to so-called old school concerns by driving down prices without making a profit so the day could arrive that they could go public after bludgeoning those firms that operated by the state’s rules to assure they would ultimately be profitable.

That sounds like a hell of an indictment of the California Legislature because it is. The business model of Uber and Lyft has always been to ignore “problematic” rules that would keep them in check such as the government does taxi cabs and even limo services.

Now that the state has made losers out of all the people that played by the rules and have lost their jobs or share of the market because of the state’s complicity, they are now trying to reign in the monster they created.

But here’s the rub. The end goal of AB-5 is not to stand up for workers’ compensation and work rules the courts say should apply to them as hailing an independent Uber driver with an app in reality isn’t all that much different than hailing an independent taxi by calling the dispatch number of the franchising cab company. Instead it is to assure the state still can control the fate of the drivers.

A more holistic approach would have been to target Uber, Lyft, and Door Dash et al in such a manner it would benefit drivers and paying passengers as well.

The better move would have been enabling drivers that the tech firms tie up to operate legally as independent jitney drivers by cutting out the middle guys — Uber and Lyft. That way they could operate their own businesses without being subjected to the rules that weighed down taxi companies.

Uber and Lyft got big because lawmakers looked the other way for years when those companies shredded rules that the state hamstrung taxi cab drivers with.

Instead the legislature adopted a drive-by shooting approach. The gunfire they unleashed that was aimed at Uber and Lyft took out bystanders that for years had complied with California law regarding independent contractors as shaped by regulators empowered by legislative action.

No consideration was given to the people who preferred being independent contractors because it gave them needed flexibility and the ability to make a living.

Instead all they were focused on were those Uber and Lyft drivers that were disgruntled.

And to underscore just how concerned they were about those caught up in the crossfire, take note of who were the first innocent victims that the legislature carved out exceptions to AB-5 for — lawyers that work as independent contractors.

That in itself should tell you how messed up the California legislature is.

Proposition 22 is a self-centered solution that Uber, Lyft, and Door Dash have carved out for themselves from AB-5 that was aimed primarily at them.

Regardless of how shallow or shortsighted you may view Gonzalez’s legislation, that last thing that should happen on Nov. 3 is that the monsters the California Legislature helped create and then tried to rein gets away scot free from AB-5 while the collateral damage it caused to others remains mostly intact.