Corporate America's Second War With the Rule of Law
Last month, after a fierce lobbying battle, California passed a law that will likely end up mandating that companies in the “gig economy,” such as Uber, treat gig workers as employees. After losing the battle to carve out an exception for Uber drivers, Uber’s general counsel, former Obama official Tony West, announced the company simply did not believe the law applied to it. Disrespect toward law is not a surprise at Uber. From the very beginning, leaders there have often seen laws as something to be tested, not followed; at one point in 2017, the company was under five separate criminal investigations.
West’s announcement reflects an important ethos at Uber, and in corporate America in general. On the verge of the 2020s, we’re reverting to the 1920s: The rule of law, if you are powerful in either business or government, increasingly seems optional.
Elite disrespect for law is prompting a political backlash, often framed as a “techlash.” The gig economy law exists largely to address Uber’s history of a two-tiered system of worker treatment. There are the drivers who do the work, and there are the executives who control strategy and structure. Earlier this year, Uber unilaterally slashed pay for its drivers in Los Angeles by 25 percent, prompting a strike. Meanwhile, former CEO Travis Kalanick—who was removed from a leadership role after overseeing a corporate culture of alleged sexual harassment within the company and an expansion strategy of disrespecting laws set by elected leaders—remains a billionaire. The new gig economy law passed by California’s legislature is the democratic response to this unfair situation.