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title: "Timeline photos One of the bright spots in the recent election was…"
date: 2020-11-06
source: facebook
type: Archer T. Ships added a new photo.
---

# Timeline photos One of the bright spots in the recent election was…

*November 6, 2020 · Facebook*

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![](img/2020-11-06-fb-002-img01.webp){style="max-width:100%; margin:1em 0"}
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One of the bright spots in the recent election was the passage of Prop 22, which exempts some companies (Uber/Lyft) from some of AB5\'s requirements.\
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AB5, as you may recall, was a bill that requires companies that make heavy use of gig employees\--such as Uber / Lyft\--to treat gig employees as full time employee.\
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AB5 would substantially increase the costs of hiring gig employees, making it uneconomical for companies like Uber / Lyft to continue operating in California.\
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IMO, pricing gig employees out of the market was the intent of AB5, as AB5 was written and sponsored by Lorena Gonzalez, a former labor organizer for AFL-CIO.\
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The government transportation unions / cartels pushed for AB5 because a) they want to kill off non-unionized competitors b) its easier to unionize full time employees.\
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For the last 100 years or so, the transit unions / taxi cartels successfully suppressed competition by passing taxi licensing laws. In NYC, for example, the number of taxi licenses now (13,587) is actually \_less\_ than the number of licenses issued when the taxi medallion system was started in 1938 (13,595). As a result, the cost of a taxi license peaked above \$1.3 million dollars/license in 2013.\
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\$1.3 million. Just for permission to give people rides. (Where were progressives while this nonsense was going on? )\
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However, Uber / Lyft were able to successfully defeat the taxi cartels / government transit unions by pouring money into rapidly building their networks, growing the constituency for their services faster than the unions/cartels could fight back.\
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Of course, the unions / cartels didn\'t give up. However, they no longer had the political power to simply ban Uber / Lyft outright. What to do?\
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If they can\'t ban them outright, maybe they could increase their regulatory cost enough to drive them out of business?\
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Here\'s how it works:\
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A lot of people want flexible hours and non-standard pay/benefit packages. AB5 forces companies to offer the same pay/benefits package to someone working 10 hours per week as they do to someone working 40 hours per week. Benefits for a full-time worker average about 30% of total compensation.\
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So, AB5 substantially increases the per hour cost of hiring a gig worker relative to a full time worker doing the same job.\
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For example, consider a full time worker (40 hours/week \* 50 weeks = 2000 hours / year) nominally making \$40/hr. The benefits package will typically cost an additional 30%, so add another \$12/hr in benefit costs to bring the total cost/hour to the employer to \$52/hour. Over a year, that\'s an extra \$24 K in compensation.\
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Now suppose the company hired a gig worker, also at \$40/hour, who worked for 10 hours per week (10 hours/week \* 50 weeks = 500 hours). That puts their total annual compensation at \$20 K (\$40 \* 500). But now add another \$24 K full time benefits package to the cost of hiring them. That puts their total compensation at \$44 K/year, and raises their hourly total compensation to \$88/hour (44000/500 = 88).\
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Obviously, given a choice between hiring a full-time employee at \$52/hour vs a gig employee at \$88/hour, few people are going to hire the gig employee.
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