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Column: Uber and Lyft just made their campaign to keep exploiting workers the costliest in history

Michael Hiltzik
Dara Khosrowshahi is CEO of Uber, which just helped make the Proposition 22 battle the most expensive initiative campaign in history. <span class="copyright">(Richard Drew / Associated Press)</span>
Dara Khosrowshahi is CEO of Uber, which just helped make the Proposition 22 battle the most expensive initiative campaign in history. (Richard Drew / Associated Press)

Let's doff our hats to Uber, Lyft and their fellows in the gig economy. Having created a model of exploiting workers and obnoxiously browbeating local officials to get their way, they have now set a record for spending on a self-interested ballot proposition.

The $70 million in new contributions to their campaign to pass Proposition 22 on November's ballot, disclosed Friday, adds to the more than $110 million already contributed, bringing the total to $181.4 million.

One might think this is an obscene amount of money to spend on a ballot proposition that would deny thousands of workers basic workplace conditions, including a living wage, access to unemployment and worker compensation coverage, and the right to unionize. But, to paraphrase the fictional British Prime Minister Francis Urquhart, we couldn't possibly comment.

It's proper to observe, however, that the gig companies' spending puts to shame that of such other self-important interests as the oil industry, which spent $92.6 million to defeat a state oil extraction tax in 2006; the dialysis industry, which spent $110.5 million to kill proposed regulations on their clinics in 2018; and the pharmaceutical industry, which spent $109.1 million to defeat drug price controls in 2016 and more than $81 million to roughly the same purpose in 2005.

Native American tribes also spent about $155 million on 2008 campaigns to uphold gaming compacts they had negotiated with the state.

In almost all these cases, the industry spending swamped that of the opposition. In the case of Proposition 22, the opposition, mostly labor organizations, has raised about $4.8 million.

The latest campaign disclosure says Lyft, Uber, Instacart and DoorDash each contributed $17.5 million more to the campaign as of Friday. Up to then, the campaign had received about $30 million each from Uber, Lyft and DoorDash and $10 million each from Instacart and Postmates, a delivery service now owned by Uber.

No other initiative campaign in California history — given that California campaigns are the most expensive in the country, that means U.S history — has come close to the gig companies' spending on Proposition 22, even accounting for inflation.

I must thank the Yes on 22 campaign for providing me with the inflation adjustment, though it contradicts the point they must have wanted it to make, which is that their spending isn't so much.

To put their thumb on the scale, they threw in Meg Whitman's failed $178.5-million campaign for governor in 2010, though that obviously wasn't an initiative campaign. They also combined the spending on then-Gov. Arnold Schwarzenegger's four 2005 propositions even though they dealt with variant issues, which is more than a teeny bit dishonest.

One has to go back to 1988 to find an initiative battle that matches the one surrounding Proposition 22, in inflation-adjusted terms. But that battle encompassed four measures, of which only one, Proposition 103, won — a major victory for California consumers.

It's also appropriate to remember what some of the gig companies' money has been used for — namely a harassment campaign aimed at Veena Dubal, a UC Hastings law professor who has been critical of Uber and Lyft and their business model.

More to the point, Proposition 22 is aimed at overturning AB 5, the 2018 state law that requires workers such as gig drivers to be designated as employees, with all the benefits and rights that employees receive. The gig companies prefer to classify them as "independent contractors," which isn't allowed under the law.

AB 5, which went into effect in January, included exemptions for numerous work categories but not ride-hailing or gig delivery drivers such as those working for DoorDash and Instacart, which are also big contributors to the Proposition 22 campaign.

(The law provided a temporary exemption for newspaper distributors and carriers, which was lobbied for by the Los Angeles Times and other newspapers. In the session just ended, the state Legislature approved extending the exemption through 2021.)

The companies maintain that they're looking out for the little guy — that Proposition 22 will give drivers rights and minimum pay that they don't receive as independent contractors — but that's mostly blowing smoke. The UC Berkeley Labor Center has estimated that the minimum wage embodied in the measure would effectively come to only $5.64 an hour because of provisions in the initiative.

The truth is that the principal beneficiaries of the campaign are Uber, Lyft and the other gig companies. Uber and Lyft have both acknowledged in public that reclassifying their drivers as employees would blow their business model to smithereens. Uber has lost $15.7 billion and Lyft $4.2 billion in the last three calendar years, and both say they might never become profitable if they have to reclassify the drivers.

That's what's really at stake here: the quest for profit. Don't believe the companies when they claim anything else.