The reactions ranged from praise for improving treatment of Uber drivers to alarm about the perceived stifling of a booming new niche industry to a third camp which described the California decision as being less important than most believed. Here’s a sampling.

A New York Times analysis framed the ruling as being a pivotal moment for labor in the 21st century:

Companies like Uber and its rival Lyft, and Instacart, a grocery delivery service, have long faced questions about whether they are creating the right kind of employment opportunities for both the economy and for workers. The technology companies have contended that their virtual marketplaces, in which people act as contractors and use their own possessions to provide services to the public at the touch of a smartphone button, afford workers flexibility and freedom.

 

Yet labor activists and others have said such roles — with people working as freelancers and having little certainty over their wages and job status — are simply a way for companies like Uber to minimize costs, even as they maintain considerable control over drivers’ workplace behavior . …

 

The classification of freelancers is in dispute across a number of industries, including at other transportation companies. And the debate is set to escalate as the number of online companies and apps like Uber and others rises. Venture capitalists have poured more than $9.4 billion into such start-ups — known as on-demand companies — since 2010, according to data from CB Insights, a venture capital analysis firm, spawning things like on-demand laundry services and hair stylists.

 

”For anybody who has to pay the bills and has a family, having no labor protections and no job security is at best a mixed blessing,” said Robert Reich, former secretary of labor and a professor of public policy at the University of California, Berkeley. ”At worst, it is a nightmare. Obviously some workers prefer to be independent contractors — but mostly they take these jobs because they cannot find better ones.”

Concern that it will inhibit tech startups

But in Media Nama, a popular English-language website focusing on India’s tech economy, writer Riddhi Mukherjee worried about the implications of the California ruling were it copied worldwide:

[Many online] services started of as startups [sic], and the option to bring on board contractors and vendors to provide the service on the ground allowed them to become an Uber or Flipkart. If the California Labor Commission ruling were to become binding, and if online services that act as Intermediaries are forced to directly employ all contractors/vendors, then startups with limited capital will not be able to enter similar businesses. Competition will decline, smaller merchants will find it difficult to find buyers, and they will be negatively impacted.

One writer for the Silicon Beat blog was similarly concerned:

The California Labor Commission ruled that Uber drivers are employees, proving that the agency knows nothing at all about technology. If this ruling becomes the standard government reaction to companies that engage in the sharing economy, there will be no sharing economy of which to speak. …

 

Basically, the ruling is saying that, because Uber doesn’t want you to show up in a rusting hulk that might break down on the way to airport, you are an employee. And basically, the commission is saying that if I rent my house for a weekend on AirBnB, that makes me an employee of AirBnB.

 

Granted, the commission is quick to point out the ruling only applies to Berwick and isn’t “policy.” But you can bet every Uber driver will be gathering Jiffy Lube receipts at this point and filing a similar claim. You can also bet that courts and other labor commissions will be looking at cases like this.

 

Well, if Uber drivers are “employees,” one can make the argument they are owed benefits, insurance, and all other things that usually apply to a full-time employee. If everyone who is a major participant in the sharing economy is considered an “employee,” the business model simply doesn’t work.

Professor: Single ruling has little effect on big picture

But a labor law specialist interviewed by Atlantic Online challenged the idea that the California ruling would have a clear, dramatic effect.

Sam Estreicher, a professor of labor and employment law at NYU School of Law says that while the ruling is important, the fate of Uber and other ride-sharing companies and their contractors and employees may be decided more slowly, on a state-by-state basis, and hinge heavily on the interpretation of labor laws within those jurisdictions. In some places that may mean finding a midway point between employee classification and the current policy, which largely absolves the company of responsibility for its drivers.

Estreicher says that beefed up regulations that bring the companies into compliance with similar, non-sharing-economy companies in each state might be a plausible solution.

Uber is appealing the Labor Commission ruling.

At Bloomberg View, for instance, the editors made a splash with a recommendation drawn from Australia’s approach to limited water. “The system sets an annual cap on the amount of water that can be used without threatening future supply, then breaks that amount into entitlements for different users, which they can trade, temporarily or permanently,” they wrote.

“California, like most other U.S. states, also lets farmers buy and sell their water rights, to each other or to cities. But the transactions are not supported by a transparent online marketplace (though laws passed last year will help track water use). And they’re bogged down by red tape and other costs. The volume of trading shows it. From 2006 to 2010, agricultural districts or urban water utilities bought only about 3 percent of the water used in California’s San Joaquin Valley, according to the Public Policy Institute of California.”

Tilting the policy balance

In some ways, the creation of formal water market in California would be reminiscent of the cap-and-trade regime already well underway in pricing carbon emissions. That has raised questions about the level of complexity involved in taking on the project.

As one carbon trading expert has indicated, Californians can and do already trade water, but not within the sort of Australian-style system sophisticated enough to address water allocations at the statewide level. “It’s the equivalent of someone driving around and talking to ranchers and asking them if they want to sell their water,” McKenzie Funk told NPR. “To have this sort of hyper-efficient, computer-driven water market I think could help if it sends a price signal. But to set it up would be a mess.”

On the other hand, some observers noted, more efficient water markets could be opened up simply by stripping away the favoritism embedded in current regulations, rather than adding layers of new policy.

Water pricing in California has long been shaped by regulatory distortions. As Shikha Dalmia noted at The Week, “Although residential users pay more for water than farmers, they still pay below-market prices. Sacramento homes pay a flat rate for their water, no matter how much they consume. They don’t even have meters. In Fresno, which gets less than 11 inches of rain a year, monthly water bills for families are sometimes only a third of those in Boston, which gets four times more rain.”

Meanwhile, agricultural users have enjoyed cut-rate water for decades. Writing in favor of water markets at the Sacramento Bee, Lawrence McQuillan and Aaron White cast blame at “California’s 1930s federal Central Valley Project and 1960s State Water Project,” which “provide water to contractors at heavily subsidized prices. Farmers in parts of California are consuming subsidized water at $20 per acre-foot that is worth more than $2,000 per acre-foot in urban areas.”

Although Dalmia agreed that shifting “overnight” to full market pricing was “probably not doable,” she argued that California’s biggest water users, who benefit the most from market distortions, should bear the biggest cuts in the interim.

Tweaking taxes

As policymakers puzzle over California’s pricing regime, some proposed solutions have muddied once-reliable partisan lines on issues as fundamental as tax policy. At National Review, for instance, two co-authors recently made the case for slapping a special water inefficiency tax on organic farmers. The logic, wrote Terry Anderson and Henry Miller, is that “organic agriculture uses more of critical inputs — labor, land and water — than conventional agriculture. Taxation would reduce the demand for water-wasting organic products relative to non-organic alternatives, and thereby reduce some of the pressure on California’s dwindling water supplies.”

With few, if any, policy analysts pushing for a hands-off approach to California’s water woes, prospects for fresh legislation amid the state’s ongoing drought seemed set to brighten.

This axiom is playing out right now in Australia, where the government has repealed a carbon tax adopted in 2012 when another regime was in power. Here’s some analysis from the liberal Vox site:

The repeal is a big blow for climate policy. Economists have long argued that carbon pricing is one of the most effective ways to tackle global warming. The premise is simple: People should pay for the damage they cause by emitting carbon. And making fossil fuels more expensive will spur companies to seek out cleaner alternatives.

But the major weakness of a price on carbon has always been politics. So many daily activities depend on fossil fuels — from driving to home heating to industry — and the pinch from any tax is likely to be more noticeable than, say, that from more complex regulations. …

And so Tony Abbott and the Liberal Party made repeal of the carbon tax a major issue in the run-up to the 2013 elections. Abbott argued that the tax was costing the Australian economy some $9 billion per year and had little climate benefit so long as other countries weren’t also enacting their own carbon taxes.

Hilarious that Vox labels concern about how much something costs a “politics” problem.  But still.

Same populism in Melbourne and Fresno

Now of course AB 32 isn’t the same thing as a carbon tax, but both California’s and Australia’s initiatives build on the idea that families and businesses should pay more for energy that isn’t renewable. Subtext: Fossil fuels are evil.

But when believing in this truth began to have a price-tag — and especially when it seemed pointless, because most of the world wasn’t into symbolic masochism — Aussie voters bailed.

And in California, so did 16 Assembly Democrats.

Assembly Bill 69 by Assemblyman Henry Perea, D-Fresno, would delay for three years [an AB 32] rule requiring the energy industry to purchase permits for transportation fuels. Lawmakers and critics have been warning for months about a resulting price bump. …

In a show of broad discontent, 16 Democrats last week sent a letter to the Air Resources Board urging the air quality regulator to delay implementing the new rule. …

Perea said he still supports AB 32’s overarching goal of reducing emissions but does not believe consumers have been adequately prepared.

That’s from the Sac Bee earlier this month.

Notice the parallel between Perea’s double-talk and Vox’s? The liberal website likens concern about higher costs of energy to playing “politics” with the issue. Perea suggests the public won’t mind paying more for energy — so long as it’s “prepared” for the pain.

Somehow, I don’t think the Fresno pol actually believes that.

Last weekend Australians voted the ruling Labor Party from power. The Opposition Coalition led by Tony Abbott of Australia's conservative party, which is called the Liberal Party, defeated Labor Party candidate Kevin Rudd on promises to end the country's carbon tax.

Gone from office is Prime Minister Julia Gillard, who was replaced as Labor Party Leader by Rudd. Gillard left extremely unpopular because, among other policies, she had imposed the carbon tax. She also was working with California environmental officials.

The landslide victor, Abbott, commonly is referred to as “pugnacious.” He promised to curb Gillard's more restrictive environmental policies, which have damaged the country's recent mining boom. As the anti-Labor Party poster nearby shows a major Abbott plan was getting rid of Gillard's carbon tax.

Abbott proclaimed, “Australia is once more open for business.”

Broken promise

When elected six years ago, Gillard promised voters she would not impose an economy-wide carbon tax on the country. Then she reneged on that pledge, imposing it on July 1, 2012. According to the Carbon Tax Facts website, which backs the tax:

“At the centre of the government’s policy on climate change is pricing carbon. Many commentators and politicians have referred to this as a 'carbon tax.' The idea is that polluters will pay per tonne of carbon they release into the atmosphere. This cost will initially be set at $23, and increase gradually until 2015, when we will shift to a trading scheme that will let the market set the cost. This is widely thought of as the most effective and least costly mechanism to reduce carbon output and reduce the level of climate change that is occurring.”

But Gillard's reneging on her pledge riled Aussie opposition.  Two grassroots organizations, The Carbon Sense Coalition and the No Carbon Tax/Climate Skeptics Party, took on her Labor Party.  Then several large Australian businesses and the country’s second largest airline, Virgin Australia, posted losses for the year, blaming her carbon tax.

California cooperation

Just this past summer, Gillard's government was working with California on carbon trade implementation. Reported Reuters:

“California and Australia on Tuesday agreed to share information on the design and implementation of their carbon markets, a move that could help pave the way for an eventual link between the two jurisdictions.

“The two partners agreed to share technical expertise on market design, administering allowance auctions, and implementing carbon offset schemes, while also discussing how to link their markets in the future.”

Hey, Abbott!

Abbott promised a distinctly different environmental program from Gillard. He pledged to dump the carbon tax and end any thought of entering into an emissions trading or carbon credit auction scheme.

In addition, Abbott pledged to promote the use of domestic oil, natural gas and coal, as well as developing nuclear energy for Australia. And he promised to impose tougher environmental standards for wind energy plants; and to address noise pollution complaints from residents living near the nation’s giant wind farms.

Abbott is a former Rhodes Scholar, seminarian and one-time manager of a cement plant, one of the industries hardest hit by the carbon tax.

Global warming

Critics of Abbot's position contended that global warming mandates drastic action against carbon pollution. The Carbon Tax Facts site cited above argued:

“Aside from a swathe of overwhelmingly negative effects to our way of life and the environment if we do not make a global effort to fight climate change, there are significant risks to the Australian economy if we do not take steps towards pricing carbon. John Birmingham of the Sydney Morning Herald published an illuminating article detailing how we will end up paying whether or not a price on carbon is introduced. The difference is to who that money will go – to Australian taxpayers in the form of compensation, or to overseas jurisdictions in the form of penalty payments. [-]

“To illustrate the risks facing us if we do not act, let’s consider the case of Qantas, who now faces an initial carbon tax penalty of 15% on its carbon emissions for any flights it makes into or out of Europe. This penalty will increase over time, and is payed directly into the coffers of the European Union. The reason for its imposition is specifically because Australian does not have carbon price in place.”

But voters weren't convinced the threat was so serious, and backed Abbott.

Warren Duffy, president of Friends for Saving California Jobs, is an award-winning talk show host, columnist and author.  His recent book is “The Green Tsunami-A Tidal Wave of Eco-Babble Drowning Us All.” 

By John Seiler

California’s gun control fanatics took a rest this year because of the election. Gun control loses for Democrats. But they’ll be back next year for sure. We’ll be reminded of the Aurora and other massacres.

In fact, it’s gun control that is most deadly, disarming decent, law-abiding citizens and leaving them at the mercy of criminals. This video shows what happened when Australia, formerly a free country, imposed gun control: Armed robberies up 69 percent, assaults with guns up 28 percent, gun murders up 19 percent and home invasions up 21 percent.

(Hat tip to LewRockwell.com.)