Bulletin
Investor Alert

New York Markets Open in:

Oct. 26, 2020, 2:22 p.m. EDT

In record-breaking $200 million fight to preserve the gig economy, messaging doesn’t always need money

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Alphabet Inc. Cl C (GOOG)
  • X
    Alphabet Inc. Cl A (GOOGL)
  • X
    Facebook Inc. Cl A (FB)

or Cancel Already have a watchlist? Log In

By Levi Sumagaysay and Elisabeth Buchwald

1 2

Fisk, who teaches labor and employment law, added: “Of course, the line between a company using staff to communicate the company’s own message and the company trying to control the staff’s own politics is fuzzy.”

Beyond the in-app ads supported by its own employees, the companies paid out plenty of money to spread their message everywhere else, through advertising. The Yes on 22 ads feature people talking about the flexibility the companies offer their workers and poll numbers that claim most gig workers want to remain independent contractors. 

As of Oct. 17, the most recent date for which expenditures are publicly available, the Yes on 22 campaign spent just shy of $66 million on TV ads since April, when it began airing them around the state.

Production costs for those commercials, including for camera operators, wardrobe stylists and set designers, total $11.7 million. Several people who appeared in both video and print ads were paid from $500 to more than $2,000. 

The campaign has spent $27.5 million on online ads on Facebook, Google, LinkedIn /zigman2/quotes/207732364/composite MSFT +1.58% and mainstream publications such as the Los Angeles Times, San Francisco Chronicle, Sacramento Bee, San Diego Union Tribune, Southern California Newspaper Group and Politico. It has also spent $853,000 on radio ads.

By contrast, the opposition has spent about $10.2 million on overall advertising, including $8 million on TV commercials.

Meanwhile, the Yes on 22 campaign has also paid $6.8 million for polling and survey research, including $411,000 for polling and more to Berkeley Research Group, a consulting firm that is behind some of the “independent studies” the companies cite when they say most drivers want to remain independent contractors or mostly work part-time. 

The opposition points to research from the labor studies departments of universities such as UC Berkeley and UC Santa Cruz, which disputes the polls and studies often quoted by the Yes on 22 campaign. For example, gig companies say most of their drivers work part time, but researchers say the company’s services rely heavily on those who are working full time. 

See: Uber CEO says prices could double if drivers become employees, but this economist isn’t buying it

“You get a polling company to ask the right questions, you can get to whatever you want,” said Larry Gerston, political science professor emeritus at San Jose State University. “You have to take these things with a grain of salt.”

Another notable expenditure: The Yes on 22 campaign paid nearly $100,000 to the public relations firm of Alice Huffman, president of the state NAACP. The high-profile statewide civil-rights organization is a prominent supporter of Prop. 22, although some local NAACP branches do not agree with that stance. Endorsements by racial-justice groups could be significant because a majority of gig workers are minorities and immigrants.

The campaign has also placed advertising in smaller publications for certain groups, including Black Voice News, the Central Valley Voice, a publication that defines itself as a “minority publication,” the Los Angeles Sentinel, the Oakland Post and Our Weekly.

See: Race has played a large role in Uber and Lyft’s fight to preserve their business models

The campaign spent at least $877,000 on slate mailers, which are lists of propositions and candidates to support that are distributed by for-profit groups that have been paid by campaigns. One such mailer that had fine print saying it was prepared by “Feel the Bern, Progressive Voter Guide” drew a rebuke from Sen. Bernie Sanders, who tweeted on Oct. 12 that the mailer was a “lie” and called on Californians to vote no on Prop. 22 if they opposed “corporate greed.” 

Other big-ticket items listed as expenditures: About $4.7 million to campaign consultants, including Huffman’s PR firm; more than $2 million to the California Republican Party and the Republican parties of Ventura, Sacramento, Santa Clara and San Diego counties; more than $2 million for legal and accounting services; and a little over $1.2 million for phone banks.

One gig worker who spoke with MarketWatch could barely contain his anger about the campaign. “I’m sick of the lies on TV, all the money they’re spending,” said Denny, a gig worker in Los Angeles who asked that his last name not be used. “I know the truth. I’ve done Instacart for over three years. Sure, flexibility and independence are great. The only problem: It’s not worth it.”

Denny, who said he is semi-retired, said people have to consider that gig workers have expenses that should be factored into any examination of their pay. “We have taxes, gas, car insurance… commercial insurance is very expensive. There’s a whole laundry list.”

Denny said he made about $1,000 a week when the shelter-in-place orders began in March. “Two or three months later, Instacart added a lot of new shoppers, now you can’t make jack.” He is barely working now and is lucky if he makes $200 a week delivering groceries, he said.

Here are the total campaign contributions made by each of the biggest gig companies, most of which are still struggling to turn a profit: Uber gave more than $57 million, including non-monetary contributions and loans; Lyft was second with about $49 million; DoorDash followed with $48 million; Instacart gave nearly $32 million; and Postmates contributed more than $13 million. 

“Wish I ran a company that was ‘not profitable’ yet had eight-figure amounts of money to throw around,” said Tyler Breisacher of San Francisco, who delivers for DoorDash and Postmates. “It’s a ridiculous amount of money just to get out of giving workers the same rights and benefits that every other company has to give.”

Despite all the money it is spending, the campaign is also being accused of improperly cutting costs. The opposition has complained to the U.S. Postal Service about the Yes on 22 campaign using nonprofit postage rates for its mailers. In a letter to the U.S. Postmaster General, attorneys for the No on 22 campaign said the Yes side, which spent $3.5 million on postage through Sept. 19, appeared to have saved at least $1.5 million. In total, the campaign spent more than $9 million on postage, according to MarketWatch’s analysis.

Vetter, the spokesman for the Yes on 22 campaign, said: “As a 501(c)(4) organization, Yes on 22 is eligible for the appropriate non-profit postage rates with the USPS, which we applied for and were granted by the U.S. Postmaster.”

/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 229.53
+3.58 +1.58%
Volume: 33.15M
Jan. 25, 2021 4:00p
P/E Ratio
37.03
Dividend Yield
0.98%
Market Cap
$1708.29 billion
Rev. per Employee
$877,393
loading...

1 2
This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.