Two California Ballot Measures Could Have Outsized Impact On Tech Companies

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Two California Ballot Measures Could Have Outsized Impact On Tech Companies

There are 13 measures on the Nov. 3 ballot, but two in particular could have an outsized impact on the tech industry in L.A. and beyond. They are propositions 22 and 24.

Proposition 22, into which Uber and Lyft have poured tens of millions of dollars, has received most of the attention. It will decide whether delivery and ride-hailing workers will be employees or independent contracts. Proposition 24 will determine online data collection and could have broad implications for consumers and tech companies alike.

Here's what you need to know.


Proposition 22

What it is: The initiative aims to classify an estimated 300,000 to 400,000 of California's app-based ride-hailing and delivery drivers as independent contractors. The Uber and Lyft-backed measure has been at heart of a fight over gig workers' rights.

Why it matters: This measure would alter AB5, a new state law that upended gig employment by forcing companies to classify certain workers as employees instead of independent contractors. Independent contractors don't receive worker's compensation or other labor benefits. The arrangement keeps cost down for companies such as Uber and Lyft, who avoid paying payroll taxes.

If the measure fails, experts say that ride-hailing apps could see labor costs soar 20 to 30%, threatening their core business model. And California, a top market for the apps, could be a testing ground. Twenty-six states currently have mechanisms for some type of ballot initiative or referendum, even though they aren't as expansive as California's, said Rey Fuentes from the advocacy organization Partnership for Working Families.

Much like Prop 13, an initiative that has been bedeviled since it was passed in 1978, this measure would become extremely hard to overturn, needing a seven-eighths vote in the Legislature.

Who supports it: Uber, Lyft, DoorDash, Instacart and Postmates, to start. They've poured over $180 million into campaign funding, making this the most expensive ballot measure in California history. Proponents point to the measure as a way to protect driver flexibility and provide workers with benefits. The Prop 22 campaign says failure to pass it will bump up ride-hailing prices by as much as 100% in some places, spike wait times for rides and deliveries and lead to job losses.

Who opposes it: Labor advocate groups have pooled just over $13 million for their No on Prop 22 campaign. They say that under the change, drivers will become ineligible for safety protections offered by the state like paid sick leave and unemployment benefits. And once passed, the proposition will likely never be undone — this one would take a seven-eight vote of legislature to amend.

As we reported last month, new ride-hailing companies are pouncing at the opportunity to attract drivers in one of Uber and Lyft's biggest markets. Two founded in Texas are preparing to launch in L.A. in the coming weeks. Those alternative business models sprung up in the wake of a similar battle three years ago in Austin, when Uber and Lyft left town after the city passed a bill requiring criminal background checks and other protocols. Texas later passed a measure that override local regulations and the companies returned.

Last month, Seattle was the second city to enact a standard minimum wage for gig workers following New York in 2018.

The most recent poll from Berkeley shows support for Prop 22 at 39%, with 36%of likely California voters opposed.

Proposition 24

What it is: This measure would expand on privacy regulations that let consumers opt-out of data sharing on apps and websites. This is already something users can do — if they're willing to sometimes hunt around for that "Do not sell" button.

Prop 24 would require that more companies offer an opt-out feature and allow consumers to correct inaccurate private information. If it passes, the state would also spend $10 million annually on a privacy protection agency to oversee the effort.

Why it matters: This isn't the first ballot measure that's been filed to strengthen statewide online privacy laws. A San Francisco-based real estate developer, Alastair Mactaggart, tried to get a similar measure on the ballot in 2018, but it failed. After negotiating his proposal with the Legislature, California passed the California Consumer Privacy Act of 2018, which went into effect this year. Critics point to loopholes and missteps in the regulations that make CCPA ineffective.

The initiative on November's ballot takes those privacy laws — which include giving users access to their personal info and the option to delete it — a step further. Under the measure, more companies would have to allow users opt-out of sharing personal info. Again, the onus would be on individual consumers to opt out on their own. Prop 24 would also raise fines for collecting data from underage users and allow users to correct personal information.

Who supports it: Andrew Yang, a former presidential candidate, is the chair of its advisory board. "Currently, Big Tech siphons the data of millions of Americans every minute and sells and resells that data for billions of dollars," he wrote in an article for the San Francisco Chronicle last week.

Mactaggart, who introduced the ballot measure, has donated just over $5.5 million into the campaign.

Who opposes: Consumer protection agencies say the initiative won't do enough to actually protect people's private information online. The ACLU of California calls it a "fake privacy law" in its 2020 ballot guide, adding that businesses could start charging consumers who don't want to share their information. These "pay for privacy" schemes are already allowed under the current CCPA and opponents are worried it could become the norm.

"It's out of step with what people want," said Jake Snow, a technology and civil liberties attorney from the ACLU. He's worried the measure will disproportionately affect vulnerable communities who don't have the time or money to safeguard their data.

The Consumer Federation of California, a nonprofit advocacy organization, is the largest donor to the effort opposing Prop 24.

Richard Holober, the federation's president added that users that don't opt in for data sharing could be forced to pay a premium or could be penalized in some way, for instance with slower service and pop-up ads. Both groups advocate instead for an "opt-in" button for data sharing.

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Image Source: Tinder

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Tinder is altering dating profile creation with its new AI-powered Photo Selector feature, designed to help users choose their most appealing dating profile pictures. This innovative tool employs facial recognition technology to curate a set of up to 10 photos from the user's device, streamlining the often time-consuming process of profile setup. To use the feature, users simply take a selfie within the Tinder app and grant access to their camera roll. The AI then analyzes the photos based on factors like lighting and composition, drawing from Tinder's research on what makes an effective profile picture.

The selection process occurs entirely on the user's device, ensuring privacy and data security. Tinder doesn't collect or store any biometric data or photos beyond those chosen for the profile, and the facial recognition data is deleted once the user exits the feature. This new tool addresses a common pain point for users, as Tinder's research shows that young singles typically spend about 25 to 33 minutes selecting a profile picture. By automating this process, Tinder aims to reduce profile creation time and allow users to focus more on making meaningful connections.

In wholly unrelated news, Elon Musk has announced plans to relocate the headquarters of X (formerly Twitter) and SpaceX from California to Texas. SpaceX will move from Hawthorne to Starbase, while X will shift from San Francisco to Austin. Musk cited concerns about aggressive drug users near X's current headquarters and a new California law regarding gender identity notification in schools as reasons for the move. This decision follows Musk's previous relocation of Tesla's headquarters to Texas in 2021.

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Top LA Accelerators that Entrepreneurs Should Know About

Los Angeles, has a thriving startup ecosystem with numerous accelerators, incubators, and programs designed to support and nurture new businesses. These programs provide a range of services, including funding, mentorship, workspace, networking opportunities, and strategic guidance to help entrepreneurs develop their ideas and scale their companies.


Techstars Los Angeles

Techstars is a global outfit with a chapter in Los Angeles that opened in 2017. It prioritizes local companies but will fund some firms based outside of LA.

Location: Culver City

Type of Funding: Pre-seed, early stage

Focus: Industry Agnostic

Notable Past Companies: StokedPlastic, Zeno Power


Grid110

Grid110 offers no-cost, no-equity programs for entrepreneurs in Los Angeles, including a 12-week Residency accelerator for early-stage startups, an Idea to Launch Bootcamp for pre-launch entrepreneurs, and specialized programs like the PledgeLA Founders Fund and Friends & Family program, all aimed at providing essential skills, resources, and support to help founders develop and grow their businesses.

Location: DTLA

Type of Funding: Seed, early stage

Focus: Industry Agnostic

Notable Past Companies: Casetify, Flavors From Afar


Idealab

Idealab is a renowned startup studio and incubator based in Pasadena, California. Founded in 1996 by entrepreneur Bill Gross, Idealab has a long history of nurturing innovative technology companies, with over 150 startups launched and 45 successful IPOs and acquisitions, including notable successes like Coinbase and Tenor.

Location: Pasadena

Type of Funding: Stage agnostic

Focus: Industry Agnostic, AI/Robotics, Consumer, Clean Energy

Notable Past Companies: Lumin, Coinbase, Tenor


Plug In South LA

Plug In South LA is a tech accelerator program focused on supporting and empowering Black and Latinx entrepreneurs in the Los Angeles area. The 12-week intensive program provides early-stage founders with mentorship, workshops, strategic guidance, potential pilot partnerships, grant funding, and networking opportunities to help them scale their businesses and secure investment.

Location: Los Angeles

Type of Funding: Pre-seed, seed

Focus: Industry Agnostic, Connection to South LA and related communities

Notable Past Companies: ChargerHelp, Peadbo


Cedars-Sinai Accelerator

The Cedars-Sinai Accelerator is a three-month program based in Los Angeles that provides healthcare startups with $100,000 in funding, mentorship from over 300 leading clinicians and executives, and access to Cedars-Sinai's clinical expertise and resources. The program aims to transform healthcare quality, efficiency, and care delivery by helping entrepreneurs bring their innovative technology products to market, offering participants dedicated office space, exposure to a broad network of healthcare entrepreneurs and investors, and the opportunity to pitch their companies at a Demo Day.

Location: West Hollywood

Type of Funding: Seed, early stage, convertible note

Focus: Healthcare, Device, Life Sciences

Notable Past Companies: Regard, Hawthorne Effect


MedTech Innovator

MedTech Innovator is the world's largest accelerator for medical technology companies, based in Los Angeles, offering a four-month program that provides selected startups with unparalleled access to industry leaders, investors, and resources without taking equity. The accelerator culminates in showcase events and competitions where participating companies can win substantial non-dilutive funding, with the program having a strong track record of helping startups secure FDA approvals and significant follow-on funding.

Location: Westwood

Type of Funding: Seed, early stage

Focus: Health Care, Health Diagnostics, Medical Device

Notable Past Companies: Zeto, Genetesis


KidsX

The KidsX Accelerator in Los Angeles is a 10-week program that supports early-stage digital health companies focused on pediatric care, providing mentorship, resources, and access to a network of children's hospitals to help startups validate product-market fit and scale their solutions. The accelerator uses a reverse pitch model, where participating hospitals identify focus areas and work closely with selected startups to develop and pilot digital health solutions that address specific pediatric needs.

Location: East Hollywood

Type of Funding: Pre-seed, seed, early stage

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Disney Accelerator

Disney Accelerator is a startup accelerator that provides early-stage companies in the consumer media, entertainment and technology sectors with mentorship, guidance, and investment from Disney executives. The program, now in its 10th year, aims to foster collaborations and partnerships between innovative technology companies and The Walt Disney Company to help them accelerate their growth and bring new experiences to Disney audiences.

Location: Burbank

Type of Funding: Growth stage

Focus: Technology and entertainment

Notable Past Companies: Epic Games, BRIT + CO, CAMP


Techstars Space Accelerator

Techstars Space Accelerator is a startup accelerator program focused on advancing the next generation of space technology companies. The three-month mentorship-driven program brings together founders from across the globe to work on big ideas in aerospace, including rapid launch services, precision-based imaging, operating systems for complex robotics, in-space servicing, and thermal protection.

Location: Los Angeles

Type of Funding: Growth stage

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Notable Past Companies: Pixxel, Morpheus Space



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🚁 One Step Closer to Air Taxis in LA
Image Source: Joby Aviation

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Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.


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