Uber adapts to Covid and ‘Laborism’

Allysia Finley

Uber’s CEO is a political refugee. Dara Khosrowshahi, 51, immigrated to the U.S. as a boy after the Iranian revolution in 1979 when the family’s pharmaceutical and consumer-products conglomerate was nationalized by the new regime.

Four decades later, Mr. Khosrowshahi (pronounced cause-row-SHAH-hee) finds himself leading another successful enterprise that has become a target of government. Last year California’s Legislature passed a law known as AB5, which aims to make “gig companies” like Uber reclassify workers who are now independent contractors as employees.

While he demurs from discussing politics in an interview over Zoom, he explained in a podcast in August that “I do think we have the system that’s optimized. . . . It’s called capitalism. It’s not called laborism. It’s not called socialism. It’s capitalism, and it’s a system that’s built to maximize shareholder value and capital.”

“Laborism” is an apt description of California Democrats’ ideology. AB5 was driven through by unions, which want to organize hundreds of thousands of gig workers and other freelancers. The National Labor Relations Act and antitrust laws don’t allow independent contractors to unionize. So lawmakers passed AB5, which aims to force companies to reclassify them as employees. It presents an existential threat to the business models of Uber, DoorDash, Instacart and Lyft —app-based platforms that connect customers with workers in return for a cut of the payments. They allow drivers and food couriers to work whenever and wherever they want, even for multiple platforms.

Click here to read more of this Wall Street Journal article by Allysia Finley.