Lyft is a ridesharing company that, in the episodes of The Bob Zadek Show, appears chiefly as one of the two firms at the center of California’s legislative war on the gig economy. Bob Zadek describes Uber and Lyft as the starting point and the original targets of the statute, and as the companies that are always ground central for the fight over independent contracting. The show treats the question of how Lyft drivers are classified as a concrete instance of a broader dispute about whether people may choose to work for themselves.
AB 5 and the targeting of Lyft and Uber
In the July 1, 2020 episode, Bob Zadek introduces the gig economy by naming the services consumers know: Uber, Lyft, Postmates and TaskRabbit. He says the story began in California and is spreading like wildfire in blue states, with bills in the United States Congress attempting to accomplish the same denial of freedom to earn a living. He warns that if Biden ascends to the White House and the Democrats take control of Congress, what is being discussed will for sure be the law of the land Terrible New Worker “Protection” Laws Threaten the Gig Economy (2020).
Guest Kim Kavin, a working journalist, freelance writer, co-founder of Fight for Freelancers New Jersey and a member of the American Society of Journalists and Authors, says the issue came to light in California with AB 5. She notes that a lot of the media has been about people like Uber drivers and Lyft drivers, but that since the law went into effect in California on January 1st, it affects people in more than 300 professions identified so far, from courtroom interpreters and respiratory therapists to a pharmacist with a PhD thrown out of work Terrible New Worker “Protection” Laws Threaten the Gig Economy (2020).
Bob Zadek frames the choice for drivers directly: if you wish to spend your day driving a car, moving other people around and being paid to do it, and you want full-time work and security, there are plenty of opportunities, and you can sign up for a cab company as an employee. If the 40-hour work week and being an employee and not having the freedom are unappealing, the gig model gives people an option. He asks how that could possibly be exploitation.
The Cornell study on driver earnings
Kavin asks whether Bob saw the study that came out the last week from Cornell University about Uber and Lyft specifically. She says it was released the first week of July, that Cornell researchers got hold of all the data from inside Uber and Lyft and went into the apps to look at what drivers were actually doing and how much money they were making. It was a study of just Seattle, but the first time anyone had looked at what they call microdata that way Terrible New Worker “Protection” Laws Threaten the Gig Economy (2020).
She reports the findings: nine in 10 of the Uber drivers in Seattle and Lyft drivers were making more on an hourly basis than the taxi drivers; 92% were earning more than the Seattle minimum wage; the median driver after costs was earning just shy of $50,000 a year, which is way more than taxi drivers and just shy of the median for all Seattle occupations; and 96% of those drivers were working less than 40 hours a week. She asks whether any of that sounds like exploitation.
Bob Zadek answers that it does not, and adds that Uber and Lyft have not made a profit yet, so they cannot be exploiting workers and underpaying them and keeping all of the money for themselves. He argues that the marketplace dictates the value of an Uber driver’s time: if drivers do not make enough they will not sign up, Uber will not have enough drivers, and it will have to increase its cost to consumers to keep the model alive. He says Uber creates almost a perfect marketplace for service, with the price dictated by the market rather than the legislature, and that the marketplace will give all the information anybody needs about whether the business model will succeed.
The breadth of the independent-contractor model
Kavin tells Bob that more than 300 professions have been identified so far, and that depending on whose data one believes and how one defines an independent contractor or self-employed person, somewhere between about 10 and 50 million Americans work this way, either a couple hours a week or as their entire living. She cites California’s own legislative analyst’s office, which in a study back in February said that in California alone the law would hit about a million people, and probably very, very few of them would actually be helped by it Terrible New Worker “Protection” Laws Threaten the Gig Economy (2020).
She gives the example of a sign language interpreter who helps people who are deaf communicate with people who do not speak sign language, and who does that for the courts where someone with a hearing impairment is before the court. The courts keep a list of such interpreters who on any given day can go to any different court around their state. Those interpreters are independent contractors, she says, because it does not make sense for just one town to employ a person who is needed only once in a while. She says these are some of the people being thrown out of work because of the way these laws are written. She adds the example of writers like herself and freelance editing: magazines that need eight or 10 hours a month of help with editing copy are not going to pay someone a full-time 40-hour-a-week wage, but stringing together a couple of such magazines can produce a full-time job. She says the majority of independent contractors are not exploited and are often highly skilled people choosing to work for themselves.
Lyft in the recall and FAST Act episodes
In the March 21, 2021 episode on the case for recalling Gavin Newsom, Bob Zadek supplements a guest’s reference by explaining that EDD is the Employment Development Department, California’s regulatory agency that among other things manages unemployment and taxation and payroll taxes, and that it was the agency taking the lead under Newsom’s direction in making sure nobody dared to do the heinous act of taking control of your life and becoming voluntarily an independent contractor. He is reminded of California’s AB 5, which he says attempted to put Lyft and Uber, as well as other similar gig economy employers, out of business The Case for Recalling Gavin Newsom (2021).
Bob recounts that Lorena Gonzalez, whom he identifies as the guest’s former colleague in the Assembly, from San Diego, conducted a hearing when Uber and Lyft drivers were complaining they were going to lose their jobs, and shrugged it off by saying, “It’s not a very good job anyway.” Bob calls that the arrogance expressed most directly, and says he could not agree more that AB 5 is a huge overreach of legislative power to prohibit, under pain of sanctions, somebody from voluntarily accepting employment as an independent contractor from somebody they want to serve at a price they are willing to accept. He adds that the goal in Washington now in the Biden administration is to nationalize, in effect, AB 5 and to make it the law of the land.
In the December 31, 2022 episode, Bob Zadek returns to the same history. He says those who are junkies on this stuff may remember that Lorena Gonzalez was the sponsor of the statute which California enacted, which declared war on the gig economy. He recalls that when California enacted the legislation it was basically focused on Lyft and Uber, but others were captured as well, and that Gonzalez’s statute sought to declare that the status of Uber and Lyft drivers and other industries was not independent contractors setting their own hours and working, but rather that of employees who had to be treated as employees, with profound cost implications and work rule implications. He calls it a declaration of war against the entire gig economy Which Side Are You On? (2022).
Bob notes that the bill was watered down and affected by California’s Prop 22, which said, “Not so fast, folks. We don’t like that statute.” He says that flushed with the success of that bill, Gonzalez is at it again as the chief sponsor of the FAST Act, and that this might tell you something about the source. He predicts the statute might well be beaten back by a referendum, that if you get a thousand people to sign it and then figure out who in the state benefits, there are a lot more people whose lives have been made miserable than those who will be helped, and that even if it survives there will be constitutional challenges seeking a preliminary injunction, likely producing several more years of postponement.
Across episodes: the same fight, restated
The gig-economy question recurs across four episodes, and the treatment does not develop so much as repeat and extend. The July 1, 2020 episode supplies the empirical case, with Kavin’s account of AB 5’s reach into more than 300 professions and the Cornell study of Seattle drivers, while the March 21, 2021 and December 31, 2022 episodes return to the same origin story, with Bob Zadek naming Lorena Gonzalez as the sponsor of the statute focused on Lyft and Uber and Prop 22 as the measure that watered it down. What changes between the earlier and later treatment is the addition of the FAST Act: in the 2022 episode Bob identifies Gonzalez as its chief sponsor and predicts a referendum and constitutional challenges, a sequel the 2020 episode does not contain. The January 4, 2023 episode repeats the 2022 observations about Gonzalez and the FAST Act almost verbatim California Passes the Worst Piece of Legislation Since AB 5 (2023).
What the sources do not cover
The excerpts do not describe Lyft’s founding, its corporate structure, its revenue or its current legal status, and they do not say what any court has held about the classification of its drivers. They do not state the outcome of the referendum or constitutional challenges Bob Zadek anticipates, or whether the FAST Act took effect. The Cornell study is reported only through Kavin’s summary, and the excerpts do not give the study’s title, authors or methodology beyond the use of microdata from the apps.