Though typically thought of as competitors, Uber and Lyft have proposed to fight the law together. The companies proclaimed they will not change the status of its drivers, refusing to provide any new benefits in 2020. Uber and Lyft are openly and brazenly disobeying the law, overriding any meaningful notion of a government as a representation of its people. Instead, the tech giants say they will spend upwards to $90 million in legal fees and a ballot measure to maintain the current exploitative status of its workers. With money, lawyers and a near infinite pool of people who need a ride, Uber and Lyft may have calculated it is cheaper to litigate each and every case against them than to comply with the law.

We have all taken an Uber for the cheap, quick and efficient service it provides, especially when you’re on the go. As soon as we sit in our Uber ride, we quickly recognize a class and often even a generational or racial difference between the app-user and the driver. However, seldom do we realize that both parties are contributing to and reinforcing a billion dollar “gig economy” that treats both the app-user and the driver as consumers of the app-service. In fact, these corporations willfully disregard state laws and have brought new meaning to the intersection of economics, law and culture.

To date, app-based companies operate in a nebulous legal grey-zone between the legal status of an employee and an independent contractor. By successfully operating within each state’s definition of an independent contractor, these app-services have extracted billions of dollars of profit from their workers by providing no minimum wage, overtime, meal and rest breaks or any other benefit a regular employee should enjoy.

California is trying to address this problem with a new bill that extends these basic rights to approximately 1 million Californians who work full-time for various app-based companies such as Uber and Lyft. The law attempts to rectify what lawmakers have identified as a misclassification of workers as independent contractors instead of employees, which has led to “the hollowing out of our middle-class,” California Governor Gavin Newsom said in his signing statement. Though many exceptions were carved out of the law, app-based companies were not given any and this has angered many in Silicon Valley.

Though typically thought of as competitors, Uber and Lyft have proposed to fight the law together. The companies proclaimed they will not change the status of its drivers, refusing to provide any new benefits in 2020. Uber and Lyft are openly and brazenly disobeying the law, overriding any meaningful notion of a government as a representation of its people. Instead, the tech giants say they will spend upwards to $90 million in legal fees and a ballot measure to maintain the current exploitative status of its workers. With money, lawyers and a near infinite pool of people who need a ride, Uber and Lyft may have calculated it is cheaper to litigate each and every case against them than to comply with the law.

The state of California is ultimately approaching the issue from an impotent and toothless perspective. Though the law is written in a manner that deals with this burgeoning technology and economic sector in a way that is equitable to its constituency, it ultimately lacks an enforcement arm. It becomes incumbent upon each aggrieved employee to seek representation and each law firm be willing to take the case on. Otherwise, the law is simply ink on a piece of paper until someone enforces it. Although within hours of the law’s passing a class action lawsuit was filed against Uber, results from such litigation may take years.

With the bill, California is in a unique position where the state could, if it had the will to do so, combat economic exploitation while curbing economic incentives for illegal immigration into the state. App-based services have been a cash-cow for illegal immigrants and other non-citizens. By not requiring tech companies to fill out a regular W2-form like every other business, these quick, short-term, services-based jobs are full of non-citizens this law would no longer permit to be hired. Through the independent contractor status, illegal immigration and the gig economy are in a symbiotic relationship.

Beyond dictating local governments and shaping law, app-based companies are having a subliminal effect on American culture in the way in which we view labor, production and the value of goods and services. Uber argues its main business is not to give rides to app-users, but rather, it’s a “technology platform for several different types of digital marketplaces.” In this respect, Uber is not only arguing that the driver is not an employee, but even further, that they are a consumer of the app-service just like the person they’re giving a ride to! So if the driver and the rider are both consumers, then how is the capitalist extracting profit? According to the labor theory of value, a goods or service’s value is based on the amount of labor it takes to produce it. But today, these billion-dollar companies are taking the nuanced position that, “labor doesn’t exist,” in its goods and services.

An already noted symptom of late-stage capitalism is how the television viewer became the laborer for the media product despite being referred to as an “audience.” If there are no eyes to look at the television set, then why air the program or sell the air-time at all? Uber is attempting to take this alienation to another level. Uber believes the law does not apply to them because both the driver and the rider are consumers of the app-service and profit is being extracted from their use of the technology service, while no labor is actually being performed. Through this view, millions of people who make a living off app-based services are denied basic labor rights because their labor has become invisible by new technology.

Considering these companies will not comply with the law and will fight every lawsuit, what can be done? Corporate death penalty is perhaps the best solution. If tech companies will not comply with basic state regulations regarding employer-employee relations, then state governments must consider revoking an entity’s legal status to operate as a business. If on January 1, 2020, Uber and Lyft fail to comply with the new law, the most justiciable solution is to ban their operation within the state.

The concept of the corporate death penalty has existed in American law since the 19th century. In fact, in 1825, Pennsylvania had passed a law allowing to revoke a business’ corporate status “whenever in their opinion the operation of the corporation may be injurious to the citizens of the community.” And by 1870, 19 states had made similar laws allowing the state legislature to eliminate the existence of a corporation if it refused to comply.

As California has unveiled this new law, many more states will soon follow. Now that it is abundantly clear tech-companies do not intend to comply with the law as every other business is required to do so, the exploitation of workers, the encouragement of illegal migration and the negative effects upon our culture can all be eliminated by adding a clause into the bill allowing the state to terminate the business’ corporate status.



Perseus is an attorney and the author of the upcoming book, Iranian Sun, which can be found at www.IranianSun.com.