Democrats have declared war on the gig economy. For union-fed politicians, it is a survival tactic. But attacking companies like Lyft and Airbnb could also undermine Democrat support among millennials, who are big fans of the shared economy.
Already, support among Americans between the ages of 22 and 37 for the Democratic Party has dropped sharply. Take away their Ubers and they could migrate even further to the right. For them, it might not seem very progressive to stand in the way of progress.
New York’s recent battle against Uber and Lyft is an excellent example. The city council recently passed a measure capping the number of cars managed by Uber, Lyft and other for-hire companies operating in the city’s five boroughs.
The law has nothing to do with easing traffic congestion, as officials claimed. If that were the case, they would ditch some of the infernal bike or bus lanes that are gumming up the streets, as any professional driver will tell you.
Or, the city’s leaders would have stepped in earlier to repair the broken mass transit system. Ridership is down because the subways and buses are increasingly unreliable, thrusting more commuters into private vehicles.
Proponents also argue that the new cap will help struggling taxi drivers, whose investments in medallions have plummeted since Uber and the like all hit town.
Some drivers, facing financial ruin, have taken their own lives. That is tragic, but trying to step in front of innovations encouraged by the internet is hopeless and counterproductive.
Where was the city council when hundreds of small businesses were driven under by Amazon or when Expedia drove thousands of travel agents out of business? Those folks suffered hardship, too.
The difference is that there were no unions funding friendly politicians and urging them to protect those small businesses. The opposite is true in the effort to rein in Uber and Lyft.
New York Councilman Ruben Diaz Sr., a Democrat, successfully campaigned to chair the Committee on For-Hire Vehicles, even though he had accepted tens of thousands of dollars in campaign funds from the taxi industry.
The root cause of Democrats’ opposition to Uber, Lyft and other gig businesses is that party officials are terrified of losing power and money. They worry that private and, more recently, public-sector unions, the lifeblood of blue-state politicians, are under siege.
Not only have private-industry workers increasingly abandoned labor unions, now the Supreme Court has outlawed compulsory dues payments for public employees. That will sharply cut public union political donations, the vast majority of which go to Democrats.
In 2016, for instance, Open Secrets reported that public-sector unions made campaign donations of $65 million, of which 90 percent went to Democratic candidates.
That’s up from a mere $19 million in 2008. The totals of course do not include the vast get-out-the-vote efforts orchestrated by the millions who belong to the teachers unions and other labor groups. That contribution is, literally, priceless.
The attack on Uber and Lyft is not the first time Democrats in New York have taken on “sharing” businesses. They recently cracked down on Airbnb, with the city council upping oversight on the apartment-sharing company and its competitors like HomeAway.
Those firms, which provide short-term rentals to tourists and kids in the city for summer internships, for instance, threaten the stranglehold that the hotel industry and its organized workers union have on lodging.
New York City Comptroller Scott Stringer attempted to blame soaring rents on Airbnb, but common sense suggests that 50,000 shared apartments are unlikely to inflict much pain on a city of 3.5 million homes; other studies indicate little impact on rents.
However, common sense also dictates that Stringer and members of the city council might feel some obligation to the hotel industry, which has donated tens of thousands of dollars to their campaigns.
Mostly, Airbnb hosts are folks like grad students or older couples trying to get by, who are renting out their lone property or an extra bedroom. On average, they rent out a spare room for 60 nights a year — hardly a professional operation.
Their customers, for the most part, are millennials and others who don’t have $500 to shell out for a hotel room. You can bet they are puzzled that anyone would object to the arrangement.
In 2016, Democratic presidential nominee Hillary Clinton came out against the shared economy saying, "Many Americans are making extra money renting out a spare room, designing a website...even driving their own car. This on demand or so called 'gig' economy is creating exciting opportunities and unleashing innovation, but it's also raising hard questions about workplace protections and what a good job will look like in the future."
Read: You may enjoy or even need these opportunities, but I know what’s good for you and this free-wheeling work environment is dangerous to your welfare.
Many embrace gig jobs because they allow unprecedented and rare flexibility. Part-time students, retirees, mothers who have a few hours off while their kids are in school, they all enjoy being able to set their own schedules.
Mostly, it is millennials who are working in the shared economy. Some were jolted by the recession into seeking nontraditional work. Some simply like keeping their own hours and being their own boss.
A report this year from Deloitte noted, “A recent 2017 study reports that overall self-employment is likely to triple to 42 million workers by 2020, with millennials leading the way.”
That’s a lot of folks working on their own, enjoying the freedom and succeeding because of the innovations stemming from the internet and mobile connections.
We’ve only seen the beginnings of this trend, which smart politicians would do well to embrace and even celebrate. Democrats would be nuts to get in the way.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. For 15 years, she has been a columnist for The Fiscal Times, Fox News, the New York Sun and numerous other organizations.