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.

By John Seiler

India is being hit with a series of blackouts that have crippled the country. It sounds a lot like California dipped in curry. From The Economist:

* India has “blackouts (during peak hours the system delivers 10% less electricity than customers want) and an inadequate grid that does not reach some 300m people.” In California’s case, it’s 37 million people. And we haven’t had blackouts in a decade only because the weather has been cool. (So much for “global warming.”)

* “There is also a risk that India cannot deliver the long-term increase in electricity generation that its economy needs to fulfil its potential…. Trapped in the middle are the firms that run power stations. In desperation they are importing pricier foreign coal, but the grid companies cannot afford the power it produces. With too little coal and wobbly customers, the private firms that have built new power stations are in financial trouble. Another wave of private investment looks unlikely.” In California, our anti-business regulations have forced the state to import 29.6 percent of our electricity from outside the state. See the explanation and chart below.

* “In India, though, no one expects perfect design. The economy sits somewhere between the old command-and-control approach and the new ways of markets and private capital.” In California, the mix is the same, but the sequence the opposite: The old ways were markets and private capital. The new ways are “command-and-control,” as in AB 32, the Cap-and-Trade scheme of the California Air Resources Board and such nutty schemes as Gov. Jerry Brown’s Browndoggle choo-choo train and the Delta tunnel.

* “The problem has been clear for ages. A circuitous blame game is taking place. Ministries squabble but no one knocks heads together.” Same thing in California.

* “Power, so vital for growth, is India’s biggest bottleneck. The danger is that it becomes a metaphor for the whole economy….” Same here. All that “green power” just isn’t going to provide enough juice.

* “Jawaharlal Nehru, the country’s first prime minister after independence, was obsessed with hydroelectric dams, calling them the ‘temples of modern India.’ It would have been good for India’s environment, and the world’s, had many more temples been raised. The fad for hydro trickled away and it now provides only 14% of India’s power compared with up to a half in the 1960s.” In California, we’re actually working to tear down our hydroelectric dams.

* “The subcontinent has plenty of sun and wind, and states including Gujarat and Tamil Nadu are keen to encourage investments in renewable energy. These are likely to be niche sources of power, thanks to problems getting land and their high cost.” Note the word: niche, not rich. In California, the obsession with expensive renewable energy is slamming the state economy.

* “As for nuclear power, India’s attitude has long been hyperbolic on paper and ambivalent in practice…. Events in Japan have not helped. ‘By the time people forgot Chernobyl, along came Fukushima,’ says one industry bigwig.” Same thing in California. No Nukes rules.

* “If the test is avoiding a national catastrophe, India’s power sector will pass it. But if it is delivering the infrastructure that can allow the economy to grow at close to a double-digit pace and industrialise rapidly, India is failing.” Of course, California hasn’t had double-digit annual growth in decades. It’s a stagnant economy, to a great extent because it doesn’t produce enough cheap energy to keep industry humming.

Poverty to middle class — and back again

Not all the analogies are exact. California now uses a lot more natural gas than India; while India prefers coal, which is the one resource they have in abundance. India is determined to raise its people from poverty into the middle class; while California’s elites, in government and business, seem determined to destroy the middle class — or drive it to other states.

Right now, the high tech is in California, while the call centers are in India. In 20 years, it will be the opposite. Then, the wealthy Indian middle-class will complain about how tech support is provided by Californians with Valley Girl accents.

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As to how much of California’s energy comes from out of state, my colleague Wayne Lusvardi told me, “According to the table below, the answer is 29.6 percent.”