I’m going to have a hard time ever voting for a Democrat even if the opposing Republican candidate was incredibly flawed. However, I will gladly use ride-sharing services like Lyft (NASDAQ:LYFT) or Uber (NYSE:UBER). These companies, despite their many shortcomings, represent the ingenuity that has driven America to unprecedented economic power. Unfortunately, misguided lawmakers are hurting both Lyft stock specifically and freedom of commerce broadly.
The sad thing is, I really do want to vote for a Democrat in 2020. Among the everyday muck in the campaign trail, entrepreneur Andrew Yang struck a nerve with me. Completely thinking outside the box, Yang’s policies are profound and visionary. Furthermore, as an Asian American, I identify with his worldview and how he fits into the wider American narrative.
But Yang’s political party’s ineptitude that threatens the LYFT stock price is the very reason I can’t vote for him. Doing so would go against everything that I and millions of Americans stand for.
If you haven’t caught on, I’m referencing California’s devastating Assembly Bill 5, or AB5 for short. Signed into law by Governor Gavin Newsom, AB5 essentially reclassifies an estimated two million California workers as employees. It has a direct impact on Lyft stock because the underlying company’s drivers are independent contractors.
The law will go into effect Jan. 1, 2020. As you might imagine, it’s one of the biggest clouds hanging over the LYFT stock price.
Huge Cost Impositions on Lyft Stock
Typically, I don’t defend big businesses – especially disruptive ones – over the voice of the common worker. Primarily, I identify with the common worker more than I identify with a corporate fat cat. But with AB5 and its Democratic supporters, they’re completely in the wrong.
Underlining the relationship between ride-sharing companies and their clients is a choice. The drivers chose to use their cars as a ride-sharing platform. I chose to accept such services.
Do risks in this relationship exist? Absolutely! You don’t have to look far to find nightmarish stories about LYFT and Uber rides gone awry. Furthermore, the regulatory environment around ride sharing is ambiguous. That really comes into play if, heaven forbid, you’re injured or otherwise damaged in a ride-sharing incident.
However, consumers accept these risks. If instead consumers wanted the protections of a traditional taxi service, they can pony up for one. But as the Pew Research Center reported, an increasing number of Americans are using ride-sharing services.
Left alone, the LYFT stock price should rise as consumers vote with their butts and their wallets.
Unfortunately, politicians can’t leave well enough alone. By forcing the reclassification of independent contractors, sector companies must now incur costs associated with employer-employee relationships. Barclays specified the following:
Beyond higher wages, ride-hailing companies would be responsible for half (6.2%) of employees’ Social Security and Medicare (1.45%) tax, as well as the costs for administering any employee benefits (e.g., health care and 401ks)…
And don’t believe that this is just a crazy California issue. New Jersey introduced bills that virtually mimic AB5. Additionally, New York, Colorado, Oregon, and Washington are actively considering imposing similar laws.
This isn’t just about Lyft stock. Incompetent politicians want to destroy the gig economy.
What Happened to Our Freedoms?
For the most part, I believe that politics is a giant farce. Neither the left nor the right truly care about the hardworking American citizen. Well, that’s not entirely true. Every election cycle, politicians attempt to tug at our heartstrings.
Ultimately, though, as long as no piece of legislation disrupts my ability to live my life, I don’t care who’s in office. But this new breed of activist Democrats, such as California’s Gavin Newsom, are making me think I made a mistake becoming an American citizen.
While I appreciate basic freedoms of speech and religion and all that jazz, what good is it without freedom of commerce? In other words, if I can’t make a living – because believe me, being an employee is not a high-probability pathway to financial independence – I won’t care about any other freedom or privilege.
What confuses me the most is that Democrats supposedly defend personal liberties. In the incredibly contentious issue of abortion, Democrats staunchly support a woman’s right to choose. Well, how about a worker’s right to choose how she or he works?
According to this logic, I’m too stupid to forge my own path in life. Therefore, I need big government to help me.
The Catalyst for Ride Sharing
I’ve injected myself into this story for a reason: I want you to see that not everyone in the gig economy feels exploited. Moreover, I make it a point to chit-chat with my Uber drivers. Not a single one gave the impression that they hated their gig. In fact, many valued the flexibility such opportunities provide.
And if we didn’t have this ridiculous AB5 law that’s rippling throughout the U.S., we could talk about the fundamental paradigm shift that Lyft stock offers. Instead, politicians (mostly liberal ones) seem like they are angling to destroy the natural progression of economic and technological innovation.
Despite AB5, though, I’m generally bullish on Lyft stock and its counterpart Uber. That’s because the American electorate must surely see how detrimental this law and similar proposals are. From stay-at-home moms to small businesses to big corporations, a massive segment of the economy depends on non-traditional working relationships.
Long story short, I’ll be stunned if opponents of reclassification fail in their efforts to overturn this economic fascism. In the meantime, I’m going to vote for the opposite of Andrew Yang: a white man who doesn’t like (or apparently know) math.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.