How franchising paved the way for the gig economy

While changes in antitrust enforcement have made it easier for large companies to dictate prices and exert greater control over supposedly independent businesses, they have also become a tool to prevent workers from organizing or forming their own collectives. The reorientation of antitrust enforcement has also helped prevent gig workers from organizing and pushing for higher wages. In 2015, the Seattle City Council passed a measure extending collective bargaining rights to Lyft and Uber drivers. Right after its passage, Lyft, Uber and the city's chamber of commerce sued, claiming the measure violated federal antitrust law — on the grounds that workers would potentially be able to spur price hikes. After the federal government weighed in, supporting the suit, the council pulled the collective bargaining provision. Reforming antitrust would require regulators to be honest that “economic efficiency” is not some neutral, objective metric, but an ideological construct, argues Sanjukta Paul, a Wayne State law professor who wrote a study that touched on how gig companies have exerted control over "independent contractors" without using the franchise model. “When you’re telling someone else what to do and dominating them economically and extracting as much as you can from them, effort-wise, whether it’s a worker or small firm, that is ‘efficiency,' ” she says. Paul envisions an alternative metric based on social good. “If we can be more systematic and honest about what values we want to promote,” she says, “then we might say it is actually efficient and pro-social to have truck drivers and taxi cab drivers make a living wage so that they can invest in their communities and then invest in green technology for their trucks and cars.”

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