Through our collective experiences studying the future of work from various angles—as participants, builders, and investors in the category—we’ve come to believe that the gig economy is broken, and Prop 22 ensures it stays that way.

Prop 22 is the California ballot proposition that would exempt app-based transportation and delivery companies from having to provide employee benefits (such as minimum wage, paid time off, and sick leave) to gig workers.

Labor laws should reflect the changing nature of work, but Prop 22 is effectively permanent and immutable

By allowing gig companies to classify their workers as independent contractors who earn less than the minimum wage, there are negative externalities to all taxpayers—who foot the bill for government assistance programs like Medicaid. As taxpayers, we are in effect subsidizing the profitability of gig companies that have large independent contractor... See more

We’re concerned that the gig model is reliant on the misclassification of workers, and fear for the future of work in this country should the model continue to gain steam without significant updates.

The classical idea in economics that competitive-equilibrium pricing maximizes social welfare relies on the assumption that every participant in the market has the same welfare weight—but that’s not the case in markets where there is significant inequality.

And importantly, though the nature of work is constantly evolving, Prop 22 requires a seven-eighths supermajority of the California legislature to amend, making it next to impossible to change the law in the future.

It’s clear that Uber, Lyft, Postmates, etc. have led to tremendous value creation, but that value has disproportionately accrued to executives, employees, and investors of those companies, rather than to the workers that enable these services to operate on a daily basis.

New models focus on wealth creation for participants, not just hourly payments or one-time transactions.