‍Introduction

The constant evolution of the online economy in the past decades has not been matched by an equally dynamic regulatory effort in the United States. The federal government’s response has been lackluster with the plethora of Congressional hearings on big tech in the past decade yielding little tangible action in the legislative body (Brown and Nguyen, 2024). Despite the limited federal response, some states have elected to take a more aggressive regulatory approach towards big tech  with California, home of Silicon Valley, being the foremost example. Amongst the state’s massive technology sector, delivery and ride-share applications have drawn the ire of regulators. The pace of innovation in the sector has significantly augmented many workers’ relationship to their job, rapidly undermining a number of hardfought protections workers gained during over decades. As the “gig”  industries alone have now employed over 16% of working Americans at some point in their career and digital contract work grows especially important for individuals lower on the income ladder, the battle in California around regulating the industry proves especially revealing and impactful (Anderson, etc., 2021).

The growth of the tech industry has been accompanied by novel dynamics that alter the power of both industry players and the workers they “employ”. The experience of drivers during their fight to regulate the ride-share industry stands in contrast to similar attempts in the more traditional fast-food industry. Through California Assembly Bill (AB) 257 and later Assembly Bill 1228, fast-food workers secured a state managed sectoral bargaining arrangement. The board AB 1228 created sets wage floors and working conditions for the entire industry and directly includes worker representatives, partially circumventing the need to organize on an individual restaurant basis. The implementation of sectoral bargaining had been a long-time goal of many unions and workers in the U.S. so the board  amounted to a policy win for these advocates (Madland, 2024). Ride-share drivers on the other hand were unable to gain even employee status and its associated privilege despite a lengthy political fight (White, 2023). When AB-5 passed the California Assembly in 2020, reclassifying many independent contractors as full employees, it provided them with the associated minimum wage, unemployment insurance, and union organizing protections. The increase in security for the industry’s workers would be temporary however, as the rideshare companies carved out an exemption to the law for their drivers. Through championing a state referendum in 2020, Proposition 22, the ride share industry was able to reverse much of AB-5 and secure a major policy win for the industry. How did ride-share apps prevent boundary-pushing regulations in their industry while fast-food chains were forced to concede to a revolutionary change in favor of their workers?

I contend that the ride-share industry’s unique business model and market consolidation allowed lyft and uber to successfully prevent greater policy change like that garnered by fast-food workers. I first highlight that above all, the ability to organize is crucial to having and successfully wielding political power. Without the power to focus a group’s effort in politics, money and connections have limited efficacy. The essay then discusses what factors facilitate effective coordination, focusing on the benefits of smaller groups and the existence of prior institutional connections when organizing. Small groups make integrating the voices of members easier and allow for the better enforcement of equitable contributions to the group’s shared goals. When individuals with shared interests have existing connections, it facilitates trust and a level of familiarity that can overcome coordination and free riding costs. These features of organization can be the direct result of market and regulatory structures, which give certain industries and workers an innate advantage in politics. 

The comparison between the ride-share and fast-food industries’ policy fights are apt to support these theories because both battles occurred during similar time periods and in the same political jurisdiction. The political climates of both cases were relatively constant because the respective policy fights occurred within 3 years of one another, making an isolation of the differences between them easier. The fact the policy battle took place in the same political jurisdiction of California also suggests that the actors had the same avenues for change available to them. As a result of these constants, the true causes of the ride-share industry’s relative victory and the fast-food industry’s concessions can be discerned with greater confidence.

The answer to why a major faction of the tech sector was able to avoid tough regulation while a more traditional industry was not can provide deep insight into future regulatory battles. This case study of California offers an illustrative look at some of the unique challenges and dynamics involved in regulating the tech sector. With big tech’s influence in the economy unlikely to be diminished in the foreseeable future, many of the factors that allowed the industry to protect its preferred policy in California are likely to be mirrored across the country. The contrast between workers’ success at securing reforms in a more established industry like fast-food and the failure of ride-share contractors to enjoy similar regulatory changes illustrates the unique power of big tech. The legal status of workers is crucial to determining if the workplace protections that have been erected over the past centuries withstand the gig economy. If future attempts at assuring these worker rights are to succeed, many of the structural advantages the industry possesses must be overcome.

Theory

I propose that the organization of interest groups, shaped by both market and regulatory dynamics, is the major determinant of the ability to expend substantial amounts of money on politics and influence policy more generally. Smaller, more homogeneous groups with greater internal contact tend to be better able to organize political movements and campaigns. Regulatory dynamics that protect and encourage organizing also play a role in a group’s ability to obtain political power. These factors are often dictated on an industry-specific basis, creating disparate levels of political influence between businesses and workers depending on their environment. 

Without organization, mustering successful political pressure is extremely difficult. While independent actors who possess significant sums of money and connections, such as Elon Musk, can at times influence policy makers, large and concerted interest organizations exert even more and lasting power on political outcomes (Gilens and Page 2014). Coalitions necessarily rule in democracies because they supply the weight of multiple actors’ efforts behind a single political initiative and can present a representation of more popular sentiment than any individual could (Holyoke, 2020). Thus, whenever individuals or groups share interests in the political world, organization is crucial to pressure policymakers and make use of all levers of power available to them. The benefits of coalitions in influencing politics extend beyond providing monetary advantages and include the better focusing of powerful actor’s efforts. 

One of the most important factors to inhibiting or facilitating organizing is the number of actors involved in a group. With concerted joint effort, actors in coalitions can ensure they contribute enough resources to make a difference, create a coherent message that resonates with policy makers and the public, and prevent redundancies and contradictions. Despite the clear benefits of coordination, there is an incentive to free ride or not contribute as much to a cause with the hope that if the group succeeds, an individual can avoid any costs while reaping the benefits (Gavrilets, 2015). Large groups also lead to more diverse opinions which can come into conflict and undermine the coherence of an organization. When large and diverse coalitions like the Chamber of Commerce attempt to influence policy, they must coordinate their stance amongst a diverse group of companies and industries which may fall on divergent sides of any one policy issue. Such division can hamstring effective messaging and lobbying for policy change. Smaller groups diminish these issues for a variety of reasons. First, small groups make tracking and normatively punishing shirkers much easier and less costly. The smaller group size also means that individual interested parties have a greater impact on the outcome of the group’s effort such that they are incentivized to contribute more. These factors help address the collective action problem and facilitate more streamlined decision-making. With fewer voices in the room, a group can better incorporate the ideas and values of all its members. Overall, existing literature demonstrates that smaller group size leads to more durable organizations with less shirking (Olson, 1971). The benefits of small groups are often felt in concentrated industries where only a few large corporations are positioned to reap the rewards of each other's effort. The limited competition and extensive resources of companies in such industries means fewer opportunities exist to free ride on or undermine oligopoly efforts. In the realm of policy influence, these qualities prove crucial to success. With policy makers and the public inundated by communication and campaigns, assuring interested parties share a coherent message and lobbying strategy with maximal involvement provides tangible benefits (Holyoke, 2020). 

Beyond the advantages of more condensed interest groups, the level of prior contact and infrastructure connecting interested parties is crucial to successfully obtaining political influence. To organize those with shared interests, one must necessarily establish a connection and shared political issues are not always a strong enough motivator to ensure it. The seemingly benign barrier of connection can in reality be devastating to successful collective action. The effort to find, communicate with, and convince others to join an interest group is both costly and risky. To overcome this cost when no existing connection exists, individuals must bear the risk themselves, leading to a collective action problem that cripples the development of many interest groups (Nownes, 2013).  

When a group of individuals with shared interests are already in contact and possess connection though, it becomes significantly easier to organize around an issue. This connection can be as simple as sharing a workplace or industry in which individuals and corporations talk and interact regularly. The existence of an infrastructure that connects similarly interested parties can provide an obvious avenue for coordination that significantly diminishes the cost of finding and organizing with other interested parties (Bronfenbrenner, 1997). More formalized forums for interactions also exist, such as industry groups and trade unions, and are especially beneficial for wielding political power. When individuals or organizations are more dispersed however, organizing is made more difficult as existing contact is less likely to have been developed and the cost of connection increases (Rhee and Zabin, 2009). Whatever form it takes, when individuals or groups who share a political interest have strong existing connections and forums for repeated interactions, it becomes substantially easier to organize around an issue. This increased coordination results in a more forceful application of political pressure that provides a substantial advantage in policy fights.

The structure of markets can shape group sizes and connections between actors, shifting the dynamics of a political fight. More concentrated business sectors with high barriers to entry mean more constrained competition and greater opportunities for repeated interactions. The connections between market players who necessarily interact and share similar political interests leads to smaller groups with existing institutional connections. This contributes to greater organization and significantly increased political influence. One need only look so far as consolidated industries like that of Oil and their trade group, The American Petroleum Institute, to realize that industries with dominant and consolidated market players often have success in organizing politically. While consolidated industries still have competition for profit, the limited number of opinions and the prior existence of organizations based around shared interests advantage them in policy battles. This has been reflected in the greater propensity of firms to lobby or contribute to trade groups if they complete a merger (Cowgill, Prat, and Valletti, 2023). In businesses with consolidated workers, organization is also substantially easier for employees. When workers have long tenures and there is less turnover, organizing becomes less costly (Milkman and Van Der Naald, 2024). The establishment of shared goals and investments in a certain job make devoting the effort to organizing more worthwhile. 

On the opposite end of the spectrum, market and industry features can prevent coordination and organization. When a market has many actors in a dispersed space and working independently of one another, maintaining interactions, let alone organizing, becomes significantly harder (Rhee and Zabin 2009). Thus, industries without common spaces, communication, and long tenures are significantly more difficult to organize than their more consolidated counterparts. A high rate of turnover in an industry also means any chance at organizing workers faces significant levels of wasted time and effort from individuals who quickly leave the space (Milkman and Van Der Naald, 2024). These features are often built into business models and markets and are nearly unchangeable. This results in certain industries and workers being placed at a stark disadvantage in high stakes policy battles.  

Finally, certain regulatory structures can also either support or undermine the organization of interest groups and their relative power. When certain groups are afforded legal protections for activities like union organizing and enforcing mandatory dues, it allows for the easier organization of interests. Legal protections or the lack thereof can also aid businesses in policy fights. This has been reflected within the U.S. where the variety in state level laws and regulations around union organizing has led to largely uneven union density between states and disparate power balances between workers and employers (Curchin and Brown, 2024). Businesses can also face regulatory hurdles to organizing as intense antitrust enforcement affects consolidation and coordination between firms in a market. No matter the entity then, the legal framework of acceptable organizing practices can alter the difficulty of starting a political movement. 

Research Design

To support these theories, I examine two policy battles between private-sector industries and reformers. The two conflicts both took place in California during the early 2020s, providing a high measure of comparability between the respective political environments. The political struggles  examined also center around legislation in the California Assembly that increased protections for laborers. These basic similarities make any differences in outcome more clearly identifiable as the result of differing market and legal structures in the ride-share and fast food industries respectively. 

The first case I examine is the fight over ride-share app worker classification as either independent contractors, or full employees. This case involved a lengthy dispute in the California legislature where ride-share apps lobbied heavily to avoid regulation and even threatened to halt operations in the state (Sammon, 2020). Despite these efforts, the legislature passed AB-5 which established that drivers were to be considered full time employees beginning January 1^st, 2020, with all the protections this affords. Viewing this as an existential threat to their business model, which relies on cheap labor and limited protections for workers, the ride-share companies turned to an expensive and risky alternative route: direct democracy (Baker, 2020). Through funding and supporting a ballot initiative, Proposition 22, ride-share apps were able to both place on the ballot and successfully pass an exemption to AB-5 in November 2020. This measure kept their drivers as independent contractors, overriding the legislature and weakening protections for ride-share workers. While promising to set some standards for driver pay and health, the initiative was largely a total success for the apps, written and funded by the industry. 

The other major policy dispute I examine is the development of a sectoral union in the fast-food business. After a similarly drawn-out legislative battle, the California legislature passed legislation (AB-257) which established a board made up of representatives from the state, fast-food companies, and fast-food workers to set wages and working standards in the industry (White, 2023). This first of its kind sectoral bargaining unit increased worker power substantially, instantly providing collective bargaining to all workers in the industry without the need to organize at each restaurant. The fast-food companies continued to fight the legislation after passage, threatening to put an initiative on the ballot to reverse the legislation just as the ride-share industry had done. Unlike lyft and uber however, they did not follow through on pushing a ballot measure. While the board was amended with AB-1228 to include some restrictions on what standards it could set, the sectoral bargaining apparatus overall was left intact, providing a major win to workers and union organizers. 

These two cases are strong candidates for comparison as they occur within similar political environments and have broadly similar categories of actors but differ in the specific contours of the market. This unique situation allows for the isolation of variables. Beyond occurring within short succession of one another and under the same political jurisdiction, the cases both involve a business fighting regulations that would increase worker power and protection. The two industries are also both extremely profitable and employ low-wage workers. These shared dynamics are accompanied by the fact that both industries fought regulation hard when it was in the legislature and initially lost. The largely similar beginnings to the policy fights allow us to better identify where the differences began and what caused them. 

When it comes to the reaction of the respective businesses once they lost the initial legislative fight, the distinctions between the cases begin to appear. While ride-share apps organized a large and expensive ballot initiative campaign to protect their drivers’ status as independent contractors, fast-food companies only wielded traditional lobbying to gain back some lost territory. The differing approaches and levels of success between the two industries pose an opportunity to understand what features of each industry caused the disparate outcomes. 

The comparison of these two cases helps explain why ride-share and tech companies more generally are harder to regulate than traditional businesses. With more workers becoming involved in the gig economy, regulating the tech companies managing this new market has become deeply important (Anderson, etc. 2021). The broad similarities between the cases and the study of how the policy debates played out in California, which possesses the largest economy in the United States, provides an impactful case study of the difficulty associated with such regulation. The dynamics in this policy fight successfully isolate market and regulatory structures as the clear independent variables which allows strong conclusions to be drawn from this study. 

Evidence

The Ride-Share Industry: When the ride-share industry lost its initial fight against their drivers gaining full employee status, the companies had a choice to make. They could either continue to lobby against the regulation in the California state government or organize a widespread campaign to pass a ballot initiative that overturns AB-5. The industry leaders choose the latter option despite similar efforts by businesses falling short in the past (Baker, 2010). The decision was bold, but the unique market and regulatory environment in their industry justifiably gave the ride-share companies confidence they could win.

The ride-share industry’s extreme consolidation and the proximity of the major players in the space helped the campaign against AB-5 take off. With only two major actors in the ride-share industry, Uber and Lyft could more easily organize a campaign and communicate strategy throughout the fight. The two driving giants control nearly the entire ride-share market, making the industry a monopsony with little outside competition (Vigderman, 2024). Such consolidation provides these companies with excess influence on both the public and policy makers as the sentiments of just two companies carry the weight of a massive industry. The smaller number of actors in the market also facilitated funding the massive campaign as the division of costs is more easily negotiated amongst two companies without the risk of third-parties free riding on their efforts (Olson, 1971). The greater ability to assure both actors made sufficient contributions and the meaningful impact of each individual company’s efforts on the success of the campaign overall made sharing the financial burden less daunting. This dynamic along with access to massive sums of capital from the industry’s monopsony and connection to wealthy financiers allowed the group to spend a U.S. record $200 million on the ballot initiative (Hussain, 2024). The majority of this money came from Uber ($60 million) and Lyft ($49 million), demonstrating their willingness to bear the cost of fighting for policy change because they were positioned to uniquely benefit (California Secretary of State, 2024). 

Beyond money, the industry needed to develop a coherent message and strategy if they were to have any chance at success. This too was aided by the ride-share monopsony as smaller groups are better able to incorporate member viewpoints and produce coherent products (Olson, 1971). The ability to efficiently make decisions on how the campaign would go about spending the massive sums of money in its coffers was a massive advantage. On any strategy issue or major moment in the conflict, the two leaders could negotiate a consensus without having to accommodate a wide variety of viewpoints. The sophistication of the campaign was highlighted by major public affairs firms such as BCSF and Clyde who prominently showcased their work with the rideshare giants. The firms highlighted how they “worked with the app-based companies to oversee extensive opinion and legal research” and “construct a well-designed initiative”, demonstrating that extensive coordination took place between the two major ride-share players to create their campaign (BCFS).  The small size of the industry significantly aided this strategy development, a key aspect of any policy battle. 

The coordination of the campaign against AB-5 was further aided by the existing physical and institutional connections between the two major ride-share companies. Headquartered less than 50 miles from one another, the two ride-share giants undoubtedly exist in the same tech ecosystem. With contact between top executives and workers at both companies inevitable, powerful individuals from the tech giants had a degree of familiarity with their ally in the initiative fight long before it began. Beyond facilitating communication, the locations of both companies in the tech hub of the Bay Area meant that Uber and Lyft shared financiers who further increased connections amongst the major ride-share companies. Major hedge funds like Vanguard and Black Rock hold substantial investments in the two ride-share companies which further strengthened the connection between the companies and the shared interest in overturning AB-5. While Uber and Lyft are often in competition with one another, the breadth of existing connections and familiarity between the ride-share apps increased the major actor’s ability to organize once they possessed a mutual goal of defeating AB-5. When it came to the laborious task of starting a joint campaign, the existing inter-company infrastructure connecting the two biggest players in the ride-share space undoubtedly proved useful. With familiarity comes a greater level of trust that significantly aids in the formation and durability of coalitions (Bapna et al., 2017). The prior connections between the companies facilitated their contribution to the same campaign, “Yes on 22”, allowing them to pool money and jointly use top law and public affairs firms to coordinate a top-down campaign that co-opted drivers, public interest organizations, and media organizations. 

These factors allowed the ride-share companies to organize an extremely targeted and innovative campaign in support of their ballot initiative. With past businesses sponsored initiatives in California like that of PG&E failing to pass in spite of massive spending, money alone was not enough to ensure success (Baker 2010). The ride-share companies used their massive investment in “Yes on 22” to fund an extensive campaign to gain public support. The group strategically donated to and cultivated connections with minority advocacy groups to build support with the relatively diverse and liberal California electorate. The Yes on Prop 22 Campaign paid the president of the California National Association for the Advancement of Colored People (NAACP) $85,000 to appear in ads supporting the measure. The Pro Prop 22 campaign also engaged in more bottom up outreach through offering members of both the NAACP and National Action Network free rides and donations (Sammon, 2020). This attempt to court influential California voting blocs who typically support the very Democratic lawmakers who passed AB-5 required more than money, it necessitated strong strategy and organization. Beyond the co-option of racial advocacy organizations, the ride-share industry also authored an outreach and media campaign, contacting over 100,000 drivers and coaching them on how to speak with the press (BCFS). The organization of this multifaceted media and influence campaign by the ride-share industry gave them a meaningful advantage in the fight for Proposition 22. The targeting of funds and joint messaging strategy allowed the massive sums of money dedicated to the Proposition to be allocated towards influencing the groups and individuals who could have the biggest sway on election day. 

The group also used their unique access to consumers and workers to target them with ads. Uber sent messages to both drivers and riders promising higher wait times and prices if the proposition failed, even going as far as to say “Prop 22 will save lives” (Vincent, 2020). This strategy allowed the ride-share giant to target drivers and riders with messages tailored to their propensity to use their apps in their daily lives. The savvy technique also provided the app makers with a captive audience since to continue using the app, users were forced to “confirm” the statement (Vincent, 2020). This was only possible because of the unique digital marketplace the ride-share industry maintains. The ability to reach an audience of users with a limited ability to shift to alternatives in the highly consolidated market space is a unique feature of the ride-share industry. With massive troves of user data and many individuals deeply reliant on its platform, Uber was able to target many rideshare users with the coherent promise of personally detrimental consequences if Prop 22 failed.    

The consolidation in the industry gave weight to these ominous messages, providing the pro-Prop 22 campaign yet another strategic advantage. As delivery and ride-share apps have grown to employ over 15% of the workforce at some point in their career, the threat of unemployment stokes tangible fear in many (Anderson, etc. 2021). When an employer promises that a proposed action will lead to job losses and there exists limited alternatives for getting rehired in the industry, their message will no doubt be amplified in many drivers’ minds (Hertel-Fernandez, 2016). The threat of increased unemployment is also amplified for voters as unemployment has been shown to increase election turnout (Cebula, 2017). With both ride-share drivers and the public shown to respond to the type of employer messaging used by Uber, the Yes on Prop 22 Campaign was able to orchestrate a convincing appeal to voters. With high consolidation, lyft and uber’s threat of decreased employment and service quality represented a unified message from nearly the entire industry, providing significant weight to their claims. Without such homogeneity in industry messaging and message targeting, the propagation of corporate talking points would both be more difficult and less impactful. 

Beyond the strategic advantages possessed by those supporting Prop 22, the workers and interest groups opposed to the initiative were at a severe disadvantage. The first source of difficulty for the opposition to Prop 22 was the physical distance between workers. Ride-share drivers are connected through the app to riders without ever being pushed to interact with other workers. Drivers also lack a formal area to physically or digitally speak amongst themselves such as a breakroom or shop floor like at traditional employers. While drivers can seek out one another through non company means, the broad lack of consistent and institutionalized connections exacerbates the costs of organizing a campaign around drivers (Rhee and Zabin, 2009). The massive effort needed to connect with each individual driver and then convince them to join with other faceless individuals was a major obstacle to organizing a widespread campaign against Prop 22. Building an organic campaign based on drivers in opposition to the initiative became even more difficult because the one entity drivers consistently connected with, the apps themselves, openly supported Prop 22. While organizations advocating for drivers’ interests like Ride-Share Drivers United do exist, they are small and weak when compared to the massive industry groups they came up against. 

Beyond the lack of physical connections, the extremely high turnover rate within the industry meant organizing was prohibitively costly. A 2017 report found that as little as 4% of Uber drivers remained on the app for over a year (McGee, 2017). This extremely high turnover meant that even if a group went through the trouble of connecting with and convincing dispersed drivers to join the opposition campaign, much of that effort would be wasted as a supermajority of members leave the industry entirely. The added requirement of near constant organizing to keep up with industry churn made organizing a widespread driver-based campaign nearly impossible.   

Finally, the regulatory contours of the battle further diminished the power of the campaign against power Proposition 22. With ride-share workers necessarily not considered full time employees until AB-5 passed, workers lacked protections like unemployment insurance, minimum wage assurances, and union organizing privileges (Brown 2020). Without such privileges, the companies’ threats of increased unemployment and wait times resonated with drivers who had no semblance of income protection if they were not actively completing rides. 

The lack of protections for union organizing played an important role in hurting the opposition campaign as well. Workers who feel they need greater protection from and bargaining power with their employer can typically form a union and enjoy protection from retribution for doing so. This not only provides employees more direct bargaining power with their employers but also gives worker issues a more formalized and financially powerful voice in politics (Zabin, etc., 2001). Strong unions allow workers to overcome many of the coordination and collective action issues faced by interest groups as they can compel participation through mandatory dues and integrate new workers quickly. 

The absence of a powerful, grassroots campaign would have been remedied had drivers possessed a strong union. This route of organization was not available though as drivers’ long-term status as independent contractors prevented them from unionizing. The prohibition on unionizing entailed a lack of National Labor Relations Board (NLRB) protections which help balance the playing field and protect workers from retribution. Ride-share companies were thus not forced to negotiate with their workers and if the drivers were to go on strike to gain concessions, they wouldn’t enjoy protections from reprisals (Brown 2020). While a legal grey area, independent contractors who engage in certain forms of collective bargaining may also be held liable for antitrust violations, disincentivizing even the formation of drivers’ unions outside the typical NLRB route (Schneider 2023). The ride-share drivers thus lacked any semblance of a self-organized campaign or union-led effort. 

There were examples of unions supporting the campaign in opposition to Prop 22 as they hoped to gain the ability to work with and unionize ride-share drivers. Despite this, the lack of existing connections with drivers and the large costs required to run a statewide ballot campaign without funds from the very group who would benefit from the regulation weakened outside union efforts. With AB-5 going into effect only at the beginning of 2020, unions did not have time to both organize the dispersed drivers and simultaneously conduct a ballot initiative campaign that could rival the ride-share industries. In the end, labor groups only raised a tenth of the money the ride-share apps did to oppose Prop 22, a partial reflection of the differential in political power (David, 2020). 

The result of these dynamics was a deeply unequal legislative battle in which ride-share apps were able to outspend and out organize their opponents. The market structures and business model of ride-share apps afforded them with deep benefits in fundraising and organizing. At the same time, the contours of the ride-share business meant workers had little existing connections with which to build a campaign. The regulatory structure around independent contractors also denied regulatory protections to drivers which exacerbated their susceptibility to threatening company messages around AB-5. In the end, these dynamics played a major role in the ability of the ride-share industry to secure passage of Proposition 22 in 2020 with nearly 60% of the vote (CNN, 2020). 

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The Fast-Food Industry: Less than two years after the ride-share industry’s victory, a similar battle emerged in California over the establishment of a Fast-Food Council to regulate wages and working conditions. This time, the industry’s workers and their allies would secure a lasting victory despite some subsequent concessions. This success was facilitated by the greater competition and number of actors in the fast-food business when compared to the ride-share industry. The regulatory protections for fast-food workers and their existing connections to powerful unions also allowed them to wield more weapons in the policy fight. In the end, these dynamics resulted in a markedly different outcome from what took place in the ride-share fight. 

Unlike the ride-share industry, the fast-food space is much more diverse. The existence of over 38,000 fast-food restaurants in California alone with both major national chains (who have 11,000 locations in the state) and regional chains meant the coordination of these organizations was more difficult (IBISWorld 2024; Scrapehero, 2024). There also exists substantial variation in ownership structures and reliance on franchises within the fast-food industry, further complicating organizing around common interests (Little, 2015). The variation in company policies and the sheer number of franchises in the state meant that to form a campaign amongst these groups required significant organizing costs. The act of reaching out to thousands of individuals who manage fast-food restaurants and convincing them to contribute to a campaign that any one individual franchisee is unlikely to have an impact on is difficult. The substantially larger number of interested parties in the campaign against AB-257 also meant that running a well-coordinated campaign would be more difficult (Sweeney Jr., 1973). Many fast food chains, such as Chick Fil A, market themselves partially based on their quality working standards and may not want to jeopardize losing customers to the variety of competitors if they support an unpopular measure. Both assuring relatively equitable contributions to a ballot initiative campaign and coordinating a message was thus made substantially harder by the industry’s multitude of interested parties and voices. 

The diversity in the physical location of restaurants also complicates the connection of fast-food franchises. With California being the third largest state in the nation, the vast space between many franchises makes organizing strategy hard. The dispersion means there are more limited connections between fast-food business owners and thus less trust to build a complex and expensive campaign on (Bapna et al., 2017). Far from the geographic connections ride-share executives possess by working in the Bay Area and interacting with similar circles of wealthy residents, a fast-food franchise owner from Sacramento is unlikely to ever be in contact with their counterpart in San Diego. 

Despite these challenges to organizing, there were still institutions that connected fast-food restaurant owners during their fight against AB-257. Trade groups such as the National Restaurant Association’s Fast Casual Industry Council and the International Franchise Association (IFA) existed prior to the fight in California to represent the interests of fast-food owners in politics. The existence of these organizations allowed for some coordination cost to be overcome. The large market players in the fast-food space like national chains meant that there were also entities willing to bear some level of free riding to enjoy the benefits trade groups and lobbying provide. These groups were somewhat active in the legislative fight over AB-257 and the eventual passage of the compromise bill, AB-1228 (International Franchise Association, 2023). The voluntary nature of such groups, though, allows chains who do not contribute to free ride off their lobbying efforts, undermining the power of fast food industry groups. Still, organizations like the IFA continue to lobby for preferred legislation and created the “FranPac” to elect pro-franchise candidates to office. The work of the IFA and similar trade groups provide public goods to all franchises through their work, regardless of whether all benefactors contribute to the group (International Franchise Association, 2024).  

The dynamics within the fast food space played into the eventual decision to negotiate limited reforms to the original Fast-Food Council. Continuous lobbying for reforms through their existing trade groups and connections was well within the realm of established precedent for the fast food industry. This contrasted with the more monetarily and organizationally intensive option of sponsoring a ballot initiative. The effort needed to get on the ballot, coordinate messaging around the issue, and divide the monetary burden would require greater organization and uncertainty. This route for achieving regulatory change would be more difficult for the fast food industry than it had for the ride-share industry because of organizational impediments. The many actors in the fast-food ownership space meant organizing a political campaign would have been hampered by sizable free riding and substantial coordination costs. While the industry threatened a ballot measure and began fundraising for it, the aforementioned obstacles to executing such a campaign helped push them to a legislative compromise (Canham-Clyne, 2023). The ride-share companies could have gotten everything they wanted if they authored and passed a ballot initiative overturning AB-257, but this path appeared more risky than traditional lobbying for smaller concessions.

On the other side of the policy battle over the Fast-Food Council were workers and their allies. Fast food workers were substantially more powerful than their ride-share counterparts because of their greater connection both within the workplace and to influential outside groups. Fast-food workers are somewhat geographically dispersed and have moderately high turnover rates, but the difficulty this poses to organization pales in comparison to the ride-share industry. With an average tenure of one to two years and workers possessing common restaurant kitchens where they interact with one another daily, the task of organizing a campaign around workers’ interests is far from impossible (Zippia, 2021). Workers with shared interests can still connect with others and build the investment needed to make organizing for better wages and protections appealing. 

Workers in the industry also possessed organizing protections that allowed them to maintain and develop connections with powerful unions. As full-time employees, fast-food workers possessed full NLRB protections, which greatly increased their ability to connect themselves to unions (NLRB). Even with a small minority of fast-food restaurants unionized, the real push by unions to grow their influence in the industry came because of the realistic promise of future unionization, facilitated in part by the successful creation of a Fast Food Council (Bloch, 2019). Through the establishment of a centralized place for workers to negotiate with employers, unions could circumvent the need to organize on a restaurant by restaurant basis. The greater potential gains from fighting for fast-food worker protections meant that unions were more willing to forcefully lobby on behalf of even un-unionized workers. 

These dynamics allowed fast-food industry workers to connect with an especially powerful union in the Service Employees International Union (SEIU) to support their legislative fight. The SEIU has an extremely long history of organizing low wage workers, especially in key states such as California. The union also possesses substantial clout with lawmakers which the fast-food workers leveraged in their initial campaign for an industry wide council (Minchin 2020). This connection was bolstered by the past work the SEIU had done supporting legislative priorities that benefited fast-food workers. The SEIU has for decades been organizing low wage workers and led a campaign that began with fast-food workers to raise the federal minimum wage to 15 dollars (Minchin, 2020). The “Fight for 15” movement was organized in large part by the SEIU and resulted in many states and companies raising their minimum wage, demonstrating their ability to win legislative fights (Selyukh, 2020). The campaign also connected the organization with fast-food workers, providing a level of prior familiarity and trust between workers and the union. With established connections, the SEIU and many fast-food workers could more easily orchestrate an effective lobbying campaign to get a top priority passed in California. SEIU President Mary Kay Henry hailed the California sectoral bargaining organization as “an essential steppingstone to the kind of sectoral bargaining we need”, demonstrating the strong incentive the SEIU had to partner with workers in California (GUIS, 2022). 

While business interests were still able to use the threat of unemployment and market disruptions to apply some limitations to the Fast-food Worker Council, the revolutionary sectoral bargaining unit remained in place (Canham-Clyne). The regulatory and business structure of the fast-food industry overall allowed unions and workers to organize an effective political campaign in support of major regulatory protections.

Alternative Arguments

Proponents of Proposition 22 argue that the success of the initiative reflects voter’s true opinion, expressed through direct democracy and in response to an out of touch legislature. This argument downplays the importance of the ride-share industry’s massive campaign in shaping public opinion and postulates that Proposition 22 was innately popular. The logic follows that voters opposed what their representatives were doing in Sacramento from the start as it came at the behest of special interests, and they fought back through a ballot initiative (BCSF). In the end, California voters were just more inclined to support the new gig economy with all the flexibility and ease of access to services it provides. Drivers too wanted to maintain their flexibility and freedom by remaining independent contractors rather than face the burden of contracted employment (Mccarthy et al., 2025). In contrast, the fast-food industry chose to not run a ballot initiative because they felt they had less public support to build a campaign around. Organizing ability thus did not play as big a role in the decision of whether to run a ballot initiative or not. The voters in 2020 were simply more supportive of Proposition 22 than AB-5 which had been designed by out of touch representatives. 

To support this theory, they point to the fact that ballot initiatives are a purer form of democracy without special interests using their connections with government officials to sway policy away from the people (Protect App Based Drivers and Services, 2025). They also point to a survey in which 72% of individuals supported Proposition 22 to back up the theory that, even before the campaign concluded, there was overwhelming support for the initiative (Vincent, 2020). With such broad support, the campaign was just the finishing touch to reinforce the California electorate’s deep proclivity for the gig economy. 

While this argument may have some limited validity as AB-5 certainly had its detractors and lobbying on behalf of AB-5 did occur, it significantly downplays the impact of the ballot initiative campaign on public opinion. The reality is that available polling does not support the idea Prop 22 would have certainly passed without a massive and highly organized campaign. Polls throughout the election cycle found support for the ballot measure at well under the 50% it needed to pass with some even finding opposition to the initiative in the majority (Batey, 2020). The study cited by ride-share companies as demonstrating overwhelming support for the initiative has also been called into question because it was based on a sample of only those signed up for an online newsletter related to the ride-share business (Park 2020). While the lack of comprehensive polling data makes it difficult to discern public sentiment throughout the Prop 22 campaign, it is hard to argue there was always overwhelming support for the measure.

Additionally, most Americans support the regulation of big tech meaning public opinion appears to have been predisposed against the ride-share giants. A Pew Research poll found that a majority of Americans support more government regulation of big tech with this number rising to 60% amongst Democrats (Anderson 2024). With Democrats winning the state overwhelmingly in 2020 with 64% of the presidential vote, there was almost undoubtedly support for the regulation of big tech companies like Uber and Lyft amongst the electorate (CNN, 2020). Polling showing support for regulations like AB-5 makes it difficult to imagine that a large majority of California voters favored Proposition 22 prior to the campaign. The massive sums of money the tech giants expended on the campaign itself demonstrates the value they placed on it. If public opinion truly was always on their side, highly savvy companies wouldn’t elect to spend nearly a quarter of a billion dollars on the Yes on Prop 22 campaign. 

Additionally, the belief that ballot initiatives reflect a more organic form of policy making is misguided. Ballot initiatives first require individuals to be organized enough to both write and petition for the measure, limiting the scope of what makes it onto the ballot. Once groups are organized, the massive sums of money needed to pay the filing fee, hire professional signature collecting firms, and market the measure also highly favors the elite use of the policy tool. The campaigns for these initiatives are also largely focused on speed and scale rather than true education (which is more costly and time consuming), meaning that voters are given just a limited, one-sided understanding of initiatives through advertising (Garrett, 1999). In sum, ballot initiatives' cost and structure make them a tool of the elite, undermining the idea that they represent a purer form of democracy than legislative politics.  

The reality is that ride-share companies knew from the start they would have to wage a tough battle if they were going to get their proposition passed (Baker, 2010). In the end, the costs and risks were overcome by the industry’s advantages, allowing them to run a successful campaign. Without such organizational benefits however, the ride-share industry would likely have been forced to accept AB-5 with the possibility of making minor tweaks to the legislation just as the less well positioned fast-food industry was forced to do.

Implications 

The research outlined in this paper generalizes well to states and political jurisdictions with ballot initiatives. While the ride-shares industry’s plethora of organizational advantages makes any political fight against the tech behemoths difficult, attempts at regulation in legislative bodies have been successful in the past. The role of legislators and regulators as guardians of public trust means pure political and financial power is somewhat rebuffed by the policy expertise and ideological conviction in legislatures and agencies. This is partially evidenced in the revival of attempts at regulating the ride share industry in 2025. California legislators have introduced AB 1340 which would allow ride share drivers to unionize, bolstering worker protections and organizational ability if enacted (McCarthy et al., 2025). While the bill has already faced strong opposition from industry lobbyists, the reintroduction of ride-share regulation in the California Assembly represents the viability of legislative politics for regulating big tech. When ballot initiatives exist though, legislator’s power becomes more limited and organization becomes especially important. The increase in scale and lower levels of expertise amongst voters means organization is especially important in securing policy wins through ballot initiatives. As such, this research is primarily generalizable to polities where ballot initiatives are used.     

Interest groups attempting to organize and regulate the gig economy should thus consider the impact of the regulatory arena in which they chose to fight their battles in. While worker advocacy groups in both the ride-share and fast-food industries were able to successfully win the passage of long desired legislation in the California legislature, they faced different end results because of the existence of ballot initiatives. Pro-regulation organizations would be well served by focusing more energy on regulation in states without ballot initiatives or superseding such initiatives through working at the national level. This knowledge will help pro-regulation groups better allocate their limited resources. 

Conclusion 

To support the argument that coordination facilitated the ride-share industry’s successful ballot initiative, I highlight the unique level of consolidation and proximity amongst the major ride share companies. The ride-share monopsony allowed the two major actors in the space to more easily run a large-scale campaign. The fact workers lacked much political power and were unorganized also meant the campaign to pass Prop 22 faced less resistance. These organizational factors facilitated both the ride-share companies’ initial willingness to turn to the ballot initiative to improve their regulatory outlook and the ultimate success of Prop 22.

Organization was also the main issue that forced the fast-food industry to compromise on regulation. With much less market consolidation and more limited connections amongst store owners, free riding and coordination issues were impactful enough to dissuade the industry from running a ballot initiative. The industry was also up against more well-connected workers and unions which would have made passing a ballot initiative significantly more difficult. While the fast-food companies threatened to sponsor an initiative, the industry felt their political outlook meant their best option was to simply reform the council.  

While the research laid out in this paper shows a strong correlation between organizational advantages and winning ballot initiatives, causation is nearly impossible to prove. Without troves of internal documents and interviews with top executives in both industries, we can’t discern the exact calculus that went into each sector’s decision-making processes. While it is highly likely the quality of the Prop 22 campaign was influential in securing the passage of Proposition 22, there is limited public data on its direct impact on voter sentiment. If further research could track both changes in public opinion regarding Prop 22 and better capture the thought process of major industry actors, there could be a more causal relationship drawn between organizational ability and political success. 

In spite of these drawbacks, the research and conclusions shared in the preceding paragraphs reveal important insights. With big tech an increasingly large part of American life, the ability of both the state and national government to respond to and protect their citizens from industry excesses is crucial. Through the case study of California’s ride share industry, policy makers, advocates, and Americans more generally can garner a clear understanding of the obstacles facing regulatory ventures.

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