Saving capitalism from capitalists - gig economy edition

Sometime back I had blogged about how regulatory arbitrage has been a major contributor to the emergence of many of the tech start-ups. While their "innovation" is lauded, very little discussion around this arbitrage happens.

In this context, the discussion around the new California law, Assembly Bill 5, to take effect from January 1, 2020, which makes it tougher for gig economy companies like Uber and Lyft to classify their drivers as independent contractors and not as employees. This has allowed these companies to avoid paying benefits and protections for these workers.

But the FT writes, the companies are already bracing for a stiff defence to overturn the legislation,

It is certainly not a foregone conclusion that the drivers summoned by ride-hailing apps, along with other gig economy workers, will end up on the corporate payroll. Uber argues that, even with California’s stricter test, it will still be able to treat its drivers as independent contractors. What this comes down to, at heart, is whether Uber is a tech company, or whether it is really just another operator of a taxi-like service. According to California’s new law, companies can only treat workers as contractors if the work these people do falls outside the organisation’s usual business In short: if Uber is a service for supplying rides, then the work of driving would seem to be closely tied to its core mission. But if it is instead a tech company, operating at one remove from the actual service — one that operates an online platform, selling technology services to both drivers and riders in a two-sided market — then driving may not be as central. This is likely to be a hard case for Uber to make. After all, it is so closely associated with its core service that its name has even become a verb for taking a ride. But this is not a foregone conclusion.

How can you with a straight face claim to be a socially responsible corporate citizen and represent sustainable capitalism when you make disingenuous arguments like these? How could the ideologues of compassionate capitalism and liberals opinion makers who wail about inequality and deprivation allow these corporates to discard even pretensions of propriety and scruples and nonchalantly make such arguments?