
Ask HN: What do you think will happen to the Gig economy with the bill? - Shopr
Please give you thoughts on what will happen to Uber, Lyft, DoorDash etc. with the new bill that’s being passed in California.<p>This bill would require these companies to treat their contractors as employees - providing health insurance, benefits, etc. Completely killing the low on demand labor they currently benefit from.<p>What do you think startups that are relying on contract &#x2F; on-demand workers should do?<p>Shameless plug - I’m building Shopr. A marketplace that connects online shoppers to nearby apparel stores to get their items delivered within 2-hours (vs. the typical 2-5 day shipping). Our model uses contract drivers to fulfill the orders, which is why I’d like to hear your opinion.<p>Thanks!
www.ShoprDelivery.com
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dmode
There are several ways it can play out. Governor can veto the bill or can seem
amendments that codifies some exemptions for the gig economy. If the bill
passes as is, Uber will most likely continue to operate as is and battle it
out in court. The ABC test is still fairly vague and if you can build a true
marketplace, where buyers and sellers have full control, you don't have to
change anything. Think of the eBay model. Uber can make some fundamental
changes, like allow drivers to set prices, select rides etc. and give them
more control. If Uber chooses to convert some drivers to employees, they will
probably raise prices to cover those costs. This will play out over the years,
but the fundamental message is clear, don't run a business whose business
model depends on having everyone as "contractors"

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baggy_trough
Here are some of the numerous regulatory issues that companies will need to
deal with. It seems almost impossible.

[http://coyoteblog.com/coyote_blog/2015/06/ca-labor-
commissio...](http://coyoteblog.com/coyote_blog/2015/06/ca-labor-commission-
has-just-killed-uber-though-it-may-take-years-to-bleed-out.html)

~~~
Shopr
Thank you for sharing this, I didn’t even take in the smaller thinks like
sexual harassment training into consideration.

Reading over your article definitely makes it seem impossible in the current
state we’re in. This will definitely require higher prices for the services.

How do you feel about the bill? Are you for or against it. From what I read
your article seemed pretty objective.

~~~
baggy_trough
Personally, I'm against the bill, because I think California has a very poor
regulatory environment for running a business, and it seems to be getting
worse all the time. This just adds to that problem, in some cases
dramatically.

Note, I didn't write the article.

~~~
dmode
California has the 4th largest economy in the world and is growing faster than
most states. In 2019 alone, California probably created ~$300bn in public
value through IPOs. Clearly, the regulatory environment seems to be great for
running a business

~~~
malandrew
California succeeds despite the regulatory environment.

Hollywood is there because of the great weather and sunshine which allowed
filming all year long.

Tech is there because of the defense industry set up there during WWII.

Agriculture is there because of the great weather and soil.

Basically, every advantage California has is the result of its geography and
weather. If you remove these three industries, there isn't much of an economy
that isn't dependent on the money that these three industries bring into the
state.

~~~
dmode
Florida has all of these, but doesn’t have the same economy

Edit: actually, let me get into more detail on why I reject this hypothesis
that I hear all the time "California is successful despite its govt /
regulations etc.". I reject it in the simple notion that if the regulatory
environment was bad for business, it will BE bad for business and it will play
out over a time period on actual outcome. It is almost like a product manager
saying that "I have the best product, but my users hate it". The fact is that
the regulatory environment created the most successful economy in the US is
the only thing that matters. Now let me get into why the regulatory machine
works - first of all California legislature understands that we live in a
knowledge economy - which means a low value regulatory relief like tax cut is
unimportant. Rather, what people in the knowledge economy are looking for are
safety nets, equality, worker protections, anti-competes, accessible
healthcare, acceptance etc. The same arc that provides the strongest LGBT
protection in the nation also passes AB5, with the sole intention of
protecting worker rights. California laws provides volumes of the above -
resulting in global talent willing to move here. Couple that with strong
environmental protections, which not only provide recreational opportunities,
but also spurs alternative industries. Looks the explosion in solar providers,
electric car companies etc.

~~~
sloaken
Given your first line 'Florida has all of these, but doesn’t have the same
economy' is wrong in so many ways, I have a hard time accepting your second
paragraph.

~~~
malandrew
Yup, someone clearly doesn't know much about the history of Florida, which was
swampy and mosquito invested and only really became inhabitable after the
invention of air conditioning and when terraforming become advanced enough to
drain swampy areas. It was basically continental America's last frontier.

[https://www.politico.com/magazine/story/2017/09/08/hurricane...](https://www.politico.com/magazine/story/2017/09/08/hurricane-
irma-florida-215586)

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rajacombinator
Haven’t read anything about it but the usual outcome in situations like this
is that entrenched players (who secretly backed the politicians responsible)
come up with a clever legal structure that allows them to evade the laws.
Small players can’t compete and are forced out by barriers to entry.
Politicians collect fat checks. Citizens are either oblivious or confused why
life got worse. But it goes on.

~~~
sloaken
I could not agree more, and that is why I hate ALL politicians, and the
corporations that buy them.

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prepend
I think it will have a bigger impact on FedEx and the “real gig economy” that
has millions of contractors.

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401kguy
This does not generalize to the broader gig economy, but I expect quarterly
losses will increase for Uber and Lyft, whether due to adhering to or fighting
the bill.

While I’m not a fan of either company, heavy blows to both have the risk of
putting Lyft into a downward spiral as they have far less capital to weather a
storm than Uber. If the duopoly becomes more like a monopoly that would give
Uber even more leverage over drivers.

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gshdg
Business models that rely on being able to exploit workers who are desperate
for income by compensating less than is required to survive in the expensive
cities where those businesses operate will fail. This is not a bad thing.

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buboard
Almost every company had an "unfair competitive advantage" until regulation
took over. It seems the gig economy did not move on to other things fast
enough and now they 've "overstayed their welcome".

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anovikov
If they really relied on revenue and profit, so function like normal
businesses, they would simply register overseas and pay drivers using bitcoin.

Problem for those companies is that they rely on inflated valuations fueled by
printed money i.e. basically robbing these same contractors but in their old
age, their future pensions/public funds... Which leaves them in quite a
difficult predicament, but why should we care?

