Look, this is the last post I’m writing in 2019 and I’m tired. But I can’t let the year close without taking stock of how well tech stocks did this year. It was bonkers.
So let’s mark the year’s conclusion with some notes for our future selves. Yes, we know that the Nasdaq has been setting new records and SaaS had a good year. But we need to dig in and get the numbers out so that we can look back and remember.
Let’s cap off this year the way it deserves to be remembered, as a kick-ass trip ’round the sun for your local, public technology company.
We’ll start with the indices that we care about:
Next, the highest-value U.S.-based technology companies:
Now let’s turn to some companies that we care about, even if they are smaller than the Big Five:
And so on.
The technology industry’s epic run has been so strong that The Wall Street Journal noted this morning that, powered by tech companies, U.S. stocks “are poised for their best annual performance in six years.” The Journal highlighted the performance of Apple and Microsoft in particular for helping drive the boom. I wonder why.
How long will we live in the neighborhood of Nasdaq 9,000? How long can two tech companies be worth more than $1 trillion at the same time? How long can the biggest tech companies be worth a combined $4.93 trillion (I remember when $3 trillion for the Big Five was news, and I recall when the group reach a collective value of $4 trillion).1
But the worst trade in recent years has been the pessimists’ gambit. No matter what, stocks have kept going up, short-term hiccoughs and other missteps aside.
For nearly everyone, that is. While tech stocks in general did very well, some names that we all know did not. Let’s close on those reminders that a rising tide lifts only most boats.
Several of the most lackluster public tech companies were 2019 technology IPOs, interestingly enough. Who didn’t do well? Uber earns a spot on the naughty list for not only being underwater from its IPO price, but also from its final private valuations. And as you guessed, Lyft is down from its IPO price as well, which is not good.
Some 2019 IPOs did well in the middle of the year, but fell a little flat as the year came to a close. Pinterest, Beyond Meat and Zoom meet that criteria, for example. And some SaaS companies struggled, even if we think they will reach $1 billion in revenue in time.
But it was mostly a party. The public markets were good, and tech stocks were great. This helped create another 100+ unicorns in the year.
Such was 2019. On to 2020!
The Pallone-Thrune TRACED Act, a bipartisan bit of legislation that should make life harder for the villains behind robocalls, was signed into law today by the President. It’s still possible to get things done in D.C. after all!
We’ve covered the TRACED Act several times previously, as robocalls are, in addition to being horribly annoying, a uniquely annoying high-tech threat. Using clever targeting and spoofing technology, scammers are placing millions of calls that at best irritate and at worst take advantage of the vulnerable.
The new law won’t end that practice overnight, but it does add some useful tools to regulators’ toolboxes. Here’s how I summarized the bill’s provisions earlier this month:
FCC Chairman Ajit Pai was effusive in his praise in a statement:
I applaud Congress for working in a bipartisan manner to combat illegal robocalls and malicious caller ID spoofing. And I thank the President and Congress for the additional tools and flexibility that this law affords us. Specifically, I am glad that the agency now has a longer statute of limitations during which we can pursue scammers and I welcome the removal of a previously-required warning we had to give to unlawful robocallers before imposing tough penalties.
And I thank the American people for never letting us forget how fed up they are with scam, spoofed robocalls. It’s their voices that power our never-ceasing push to fight back against the scourge of robocalls and malicious spoofing.
The FCC is limited in what it can do, and even major fines like this $120 million one have had a negligible effect on the nefarious industry. “Like emptying the ocean with a teaspoon,” said Commissioner Jessica Rosenworcel at the time.
Here’s hoping the TRACED Act amounts to more than a bigger spoon. We’ll find out as regulators and the mobile industry grow into their new capabilities and begin the long process of actually applying them to the problem. It may take months or more to see any real abatement, but at least we’re taking concrete steps.
Welcome to the third annual TechCrunch Include Progress Report. Our editorial and events teams work hard throughout the year to ensure that we bring you the most dynamic and diverse group of speakers and judges to our event stages. And finally, at the tail end of 2019, we bring you … 2018 data. (You can see 2017 data here.)
In 2018, TechCrunch produced Disrupts in San Francisco and Berlin, as well as regional Battlefield events in Zug, Switzerland; Lagos, Nigeria; São Paulo, Brazil and Berlin, Germany. We also produced a number of Sessions events, including the increasingly popular Robotics edition, as well as Blockchain and AR/VR.
It is important to us that we foster an environment that reflects the increasingly diverse tech industry. We are pleased to report that we saw an overall increase across the board with regard to inclusion, while still acknowledging that we weren’t yet where we needed to be when it comes to women and people of color across our stages. Happily, 2019 has been even better, and we’ll bring you those numbers soon.
Below we have compiled data from our 2018 events about the makeup of people who appeared as panelists, judges and founders of the Battlefield competitors.
Our flagship conference attracts speakers, judges and Battlefield contestants from all over the world. It serves as a global arena for startups in all stages of development, as well as investors interested in finding their next big investment.
At Disrupt SF in 2018, of the 153 total speakers and judges, 33% were women and 27% were people of color. On the Battlefield stage, of the 22 teams, 36% had female founders. This is up from 29% the year before.
At Disrupt Berlin, of the 56 speakers and judges, 39% were women and 18% were people of color. Of the 12 teams that competed on the Battlefield stage, half the founders were women.
Our Battlefield competition isn’t limited to Disrupt. We take it on the road in order to give as many startups an opportunity to compete. In addition, these events include panels designed around region-specific topics. In 2018, we hosted Battlefield competitions in the Middle East and North Africa, Latin America and Africa regions.
Battlefield MENA showcased 15 teams; of those, 53% were founded by women. Of the 28 speakers and judges, 35% were women and 75% were people of color.
Fifteen teams competed in Battlefield LatAm, 20% of which were led by women. Out of the 28 speakers and judges, 32% were women and 68% were people of color.
And finally, in Battlefield Africa, a total of 15 teams competed. Of those, 33% were founded by women. Of the 28 speakers and judges, 14% were women and 75% were people of color.
Our daylong Sessions events are targeted at specific topics. In 2018, we held events about Blockchain, robotics and AR/VR. TechCrunch Sessions events attract to the stage specialists in their industries speaking to rapt audiences.
Of the 28 speakers who appeared onstage in Berkeley for Sessions: Robotics, 25% were women and 21% were people of color. In Zug, Switzerland for Sessions: Blockchain, of the 29 speakers, 17% were women and 21% were people of color. And in Los Angeles at Sessions: AR/VR, 34% of the 29 speakers were women and 24% were people of color.
Our event in Tel Aviv leaned heavily toward mobility, and served as a preview of what would become Sessions: Mobility in 2019. Of the 38 speakers in our programming, 21% were women and 63% were people of color.
In 2018, TechCrunch also hosted a hackathon at VivaTech in Paris, as well as presented editorial programming. Of the 20 speakers, 45% were women and 30% were people of color.
The income share agreement (ISA), a financing model where students pay for an education program with a certain percent of their income for several years after graduating, has been one of 2019’s new buzzwords among VCs and entrepreneurs in Silicon Valley. While still a nascent market that faces regulatory uncertainty in the US and abroad, ISAs are a mainstay of learn-to-code bootcamps and are being piloted at dozens of universities. This financing model is receiving attention because it directly aligns education programs with students’ career outcomes — something that could transform parts of higher education.
ISAs will transform the labor market even further though. In the next few years, use of ISAs will likely go beyond formal education programs to create a new category of career accelerators that are more like scaled talent agencies for businesspeople. Across industries and seniority levels, we will see ambitious professionals choose to pay a small percentage of their future income to partner companies that promise to accelerate their career’s rise.
Those companies will provide ongoing hard and soft skills trainings, job scouting, guidance on picking the career track and geographic location with the most promise, prep for compensation negotiations, personal branding guidance, and other tactical support like key people to meet and which conferences or private gatherings are most important to target.
This movement will start with graduates of ISA-financed education programs but will quickly expand to other professionals. As career accelerators prove effective at enhancing participants’ career prospects, peers of those participants will fear that they are less competitive in the job market without having the advantage of a career accelerator helping them as well.
The average annual operating budget for career services departments across US colleges is merely $90,000. For universities, there’s almost no support for job placement upon graduation despite the claims of universities in their marketing materials. And there’s definitely no support provided during the years after graduation.
The promise of ISAs is to incentivize higher education programs to design their curriculum with their students’ future financial success in mind. Most of the ISA initiatives active right now are either used as a replacement for private student loans at accredited universities or as the financing solution for non-accredited vocational programs (a.k.a. “bootcamps”) that don’t qualify for federal student aid. Their focus remains on curriculum though — it’s a wholly different activity to focus on guiding graduates in their careers for years afterward.
2019 was the year wireless earbuds went mainstream. The category has been around much longer, of course, and Apple really broke the whole thing open a full three years ago, with the release of the first AirPods, but sales exploded in 2019. The category experienced a 183% YOY increase in shipments last quarter, according to a new study.
The space continues to be driven by Apple, which currently controls 43% of the market (a number that will likely increase with the arrival of the AirPod Pros), but its near future seems destined to be defined by a race to the bottom. With Apple, Samsung, Sony and Google battling it out for the high end of the market, other players are determined to undercut the competition on price.
At $30, JLab’s Go Air True Wireless Earbuds (the first and last time I’m going to type that full name) are positioned right around Xiaomi’s category defining AirDots. The Chinese manufacturer controls around 7% of the market (a notch above Samsung’s more premium offerings), and it seems well positioned to repeat its fitness band marketshare success with such offerings.
So, where does that leave JLab? Well, there’s a lot of market to be had. As more phone manufacturers eschew headphone jacks on even midrange handsets, there’s bound to be a rush on low-price wireless earbuds. The Go Air are, well, nothing if not that. Price is their defining characteristic. And honestly, that’s fine.
Here’s the thing: I’ve been walking around with the AirPods Pro in my ears for a while now. I was less hot on the original AirPods, but these really feel like the category done right. But it’s not fair to any party involved to compare the two. You can buy eight and a third pairs of these for the price of the Pros. Different price points, different markets, different consumers.
And while it’s true that JLab has already gone a ways toward saturating the market with different models, low cost is the defining characteristic. The company claims to be the top manufacturer of sub-$100 wireless earbuds in the U.S. And the Go Airs are the lowest of the low. On paper, it’s certainly a good deal. The earbuds are light, get five hours on a charge (plus 15 from the case) and are sweat resistant.
I’ve only been playing around with them for the day, and I’ll got a smattering of complaints. The sound isn’t what you would deem “good.” In fact, they’re pretty reminiscent of that $10 pair of earbuds you bought at Walgreens in a pinch. The earbuds and the charging case both feel cheap (and I certainly can’t speak to how long they’ll last), while a USB C or even microUSB port has been traded for a half-USB connector dongle.
Also, unlike most models, the earbuds don’t automatically shut off when they leave your ears. Though that might be more feature than bug for some. Mostly, you just have to remember to pause playback on our phone. The headphones can operate independently of one another, so you can keep one bud in at a time.
Honestly, any quibble I have here comes with the giant, red lettered caveat that the things are only $30. If nothing else, it shows how quickly such products have gone from luxury to commodity. It’s kind of crazy, honestly. If you want premium headphones, look elsewhere, obviously. For something serviceable and more than anything, cheap, the Go Airs scratch that itch.
They’ll hit retail in March.
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
Today, the last day of 2019, we’re taking a second look at Boston. Regular readers of this column will recall that we recently took a peek at Boston’s startup ecosystem, and that we compiled a short countdown of the largest rounds that took place this year in Utah. Today we’re doing the latter with the former.
What follows is a countdown of Boston’s seven largest venture rounds from the year, including details concerning what the company does and who backed it. We’re also taking a shot after each entry at where we think the companies are on the path to going public.
As before, we’re using Crunchbase data for this project (here). And we’re only looking at venture rounds, so no post-IPO action, no grants, no secondaries, no debt, and no private equity-style buyouts.
Ready? Let’s have some fun.
Boston has produced a number of big exits in recent years, like Carbon Black’s IPO, DraftKings’ impending kinda-IPO, Cayan’s billion-dollar exit, and SimpliVity’s huge sale to HP. Despite that, however, Boston is often pigeon-holed as a biotech hotbed with little technology that folks from San Francisco can understand. That’s not really fair, it turns out. There’s plenty of SaaS in Boston.
As you read the list, keep tabs on what percent of the companies included you were already familiar with. These are startups that will to take up more and more media attention as they march towards the public markets. It’s better to know them now than later.
Following the pattern set with Utah, we’ll start at the smallest round of our group and then count up to the largest.
We could actually call the Motif FoodWorks‘ Series A a $117.5 million round as it came in two parts. However, the first tranche was $90 million total and landed in 2019 so that’s our selection for the uses of this post. The company is backed by Fonterra Ventures, Louis Dreyfus Corp, and General Atlantic.
Motif works in the alternative food space, creating things like fake meat and alt-dairy. Given the meteoric rise of Beyond Meat and Impossible Food’s big year, the space is hot. Lots of folks want to eat less meat for ethical or ecological reasons (often the two intertwine). That demand is powering a number of companies forward. Motif is riding a powerful wave.
The company’s known raised capital is encompassed in a large, early-stage round. That means that we won’t see an S-1 from this company for a long, long time.
An email marketing and analytics company, Klaviyo gets point for having a pricing page that actually makes sense — a rarity in the enterprise software world.
The Boston-based company was founded in 2012 and, according to Crunchbase data, has raised a total of $158.5 million. It raised just $8.5 million in total (across a small Seed round and a modest Series A) before its mega-round. How did it manage to raise such an enormous infusion in one go? As TechCrunch reported when the round was announced in April of this year:
The company is growing in leaps and bounds. It currently has 12,000 customers. To put that into perspective, it had just 1,000 at the end of 2016 and 5,000 at the end of 2017.
That will get the attention of anyone with a checkbook. The Summit Partners and Astral Capital-backed company has huge capital reserves for what we presume is the first time in its life. That means it’s not going public any time soon, even if our back-of-the-napkin math puts it comfortably over the $100 million ARR mark (warning: estimates were used in the creation of that number).
ezCater is an online catering marketplace. That’s an attractive business, it turns out, as evinced by the Boston company’s funding history. The startup has raised over $300 million to date according to Crunchbase, including capital from Insight Partners, ICONIQ Capital, Wellington Management, GIC, and Lightspeed.
When might the Northeast unicorn go public? An interview earlier this year put 2021 on the map as a target for the startup. That’s ages away from now, sadly, as I’d love to know how the company’s gross margin have changed since it started raising venture capital in huge gulps.
Cybereason competes with CrowdStrike. That’s a good space to play in as CrowStrike went public earlier this year, and it went pretty well. That fact makes the Boston’s endpoint security shop’s $200 million investment pretty easy to understand. Indeed, CrowdStrike went public to great effect in June of 2019; Cybereason announced its huge round two months later in August. Surprise.
The market is hot for SaaS-y security companies, meaning that there is natural pressure on Cybereason to go public. The firm, worth a flat $1.0 billion post-money after its latest round, is therefore an obvious IPO candidate for 2020. If it has the guts, that is. With SoftBank in your corner, there’s probably always another $100 million lying around you can snap up to avoid filing. (More from CrowdStrike’s CEO coming later this week on the 2019 and 2020 IPO markets, by the way. Stay tuned.)
DataRobot does enterprise AI, allowing companies to use computer intelligence to help their flesh-and-blood staffers do more, more quickly. That’s the gist I got from learning what I could this morning, but as with all things AI I cannot tell you what’s real and what’s not.
Given its investor list, though, I’d bet that DataRobot is onto something. New Enterprise Associates led its 2014, 2016, and 2017 Series A, B, and C rounds. Meritech and Sapphire took over at the Series D, with Sapphire heroing DataRobot’s $206 million Series E. That round creatively valued the firm at, you guessed it, $1.0 billion according to Crunchbase.
DataRobot is hiring like mad (343 open positions as of this morning) and buying other companies (three in 2019). Flush with its largest round ever, I don’t see the company in a hurry to go public. That means no 2020 debut unless it’s monetizing faster than expected.
InsightFinder, a startup from North Carolina based on 15 years of academic research, wants to bring machine learning to system monitoring to automatically identify and fix common issues. Today, the company announced a $2 million seed round.
IDEA Fund Partners, a VC out of Durham, N.C., led the round, with participation from Eight Roads Ventures and Acadia Woods Partners. The company was founded by North Carolina State University professor Helen Gu, who spent 15 years researching this problem before launching the startup in 2015.
Gu also announced that she had brought on former Distil Networks co-founder and CEO Rami Essaid to be chief operating officer. Essaid, who sold his company earlier this year, says his new company focuses on taking a proactive approach to application and infrastructure monitoring.
“We found that these problems happen to be repeatable, and the signals are there. We use artificial intelligence to predict and get out ahead of these issues,” he said. He adds that it’s about using technology to be proactive, and he says that today the software can prevent about half of the issues before they even become problems.
If you’re thinking that this sounds a lot like what Splunk, New Relic and Datadog are doing, you wouldn’t be wrong, but Essaid says that these products take a siloed look at one part of the company technology stack, whereas InsightFinder can act as a layer on top of these solutions to help companies reduce alert noise, track a problem when there are multiple alerts flashing and completely automate issue resolution when possible.
“It’s the only company that can actually take a lot of signals and use them to predict when something’s going to go bad. It doesn’t just help you reduce the alerts and help you find the problem faster, it actually takes all of that data and can crunch it using artificial intelligence to predict and prevent [problems], which nobody else right now is able to do,” Essaid said.
For now, the software is installed on-prem at its current set of customers, but the startup plans to create a SaaS version of the product in 2020 to make it accessible to more customers.
The company launched in 2015, and has been building out the product using a couple of National Science Foundation grants before this investment. Essaid says the product is in use today in 10 large companies (which he can’t name yet), but it doesn’t have any true go-to-market motion. The startup intends to use this investment to begin to develop that in 2020.
Shipfix, a relatively new startup aiming to drag the dry cargo shipping industry into the digital age, has raised $4.5 million in seed funding.
Leading the round is Idinvest Partners, with participation from Kima Ventures, The Family, Bpifrance and strategic business angels. The company was founded in December 2018 by Serge Alleyne (CEO) and Antoine Grisay (COO), and launched just two months ago.
“We’re trying to fix the email overload for everybody involved in the process of fixing a dry cargo ship by providing a comprehensive market monitor,” Alleyne tells TechCrunch.
“We’re also producing data-driven insights that are profoundly missing in the bulk/break-bulk space. Actually the last revolution of the dry cargo industry was email, and so far people still rely on indices based on a panel of brokers while all the data is available in emails”.
To solve this, Alleyne says that Shipfix connects to its clients’ email to extract and anonymously aggregate “billions of data points using deep learning technology”.
The idea is that, rather than spending hours scrolling through your inbox every morning to take the pulse of the market, you can search and filter structured market offers instantly via Shipfix.
In addition, you can browse what Alleyne calls “augmented directories” (ships, ports, companies and people available within emails and signatures — information that isn’t typically available on LinkedIn), and access data-driven benchmarks and indices.
Shipfix customers are primarily anyone chartering/fixing a ship, such as charterers, ship owners, ship operators, freight forwarders and “lots of brokers”.
However, longer term, the startup plans yo onboard commodity traders, insurers, banks, governments and investment firms, based on the granular benchmarks and indices it is building.
“We cover 430 cargo categories from salt, sand, iron ore, fertilizers, grain, steel, etc., and forecasting market pressures around the globe… [is useful] for everybody involved within the commodities space,” adds the Shipfix co-founder.
Meanwhile, the company currently employs 15 people, including senior engineers, shipping professionals, data scientists and analysts. The team is mostly remote-based and spread across 7 cities, with offices in London, Paris and Toulouse.
As Amazon and Walmart-owned Flipkart spend billions to make a dent in India’s retail market and reel from recent regulatory hurdles, the two companies have stumbled upon a new challenge: Mukesh Ambani, Asia’s richest man.
Reliance Retail and Reliance Jio, two subsidiaries of Ambani’s Reliance Industries, said they have soft launched JioMart, their e-commerce venture, in parts of the state of Maharashtra — Mumbai, Kalyan and Thane.
The e-commerce venture, which is being marketed as “Desh Ki Nayi Dukaan” (Hindi for new store for the country), currently offers a catalog of 50,000 grocery items and promises “free and express delivery.”
In an email to employees, accessed by TechCrunch, the two aforementioned subsidiaries that are working together on the e-commerce venture, said they plan to expand the service to many parts of India in coming months. A Reliance spokesperson declined to share more.
The soft launch this week comes months after Ambani, who runs Reliance Industries — India’s largest industrial house — said that he wants to service tens of millions of retailers and store owners across the country.
If there is anyone in India who is positioned to compete with heavily-backed Amazon and Walmart, it’s him. Reliance Retail, which was founded in 2006, is the largest retailer in the country by revenue. It serves more than 3.5 million customers each week through its nearly 10,000 physical stores in more than 6,500 Indian cities and towns.
Reliance Jio is the largest telecom operator in India with more than 350 million subscribers. The 4G-only carrier, which launched commercial operations in the second half of 2016, disrupted the incumbent telecom operation in the country by offering bulk of data and voice calls at little to no charge for an extended period of time.
In a speech in January, Ambani, an ally of India’s Prime Minister Narendra Modi, invoked Mahatama Gandhi and said, like Gandhi, who led a movement against political colonization of India, “we have to collectively launch a new movement against data colonization. For India to succeed in this data-driven revolution, we will have to migrate the control and ownership of Indian data back to India – in other words, Indian wealth back to every Indian.”
Modi, whose government at the time had just announced regulatory challenges that would impact Amazon and Flipkart, was among the attendees.
E-commerce still accounts for just a fraction of total retail sales in India. India’s retail market is estimated to grow to $188 billion in next four years, up from about $79 billion last year, according to research firm Technopak Advisors.
In an interview earlier this year, Amit Agarwal, manager of Amazon India, said, “one thing to keep in mind is that e-commerce is a very, very small portion of total retail consumption in India, probably less than 3%.”
To make their businesses more appealing to Indians, both Amazon and Flipkart have expanded their offerings and entered new businesses. Both of the platforms are working on food retail, too. Amazon has bought stakes in a number of retailers in India, including in India’s second largest retail chain Future Retail’s Future Coupons, Indian supermarket chain More, and department store chain Shopper’s Stop.
Flipkart has invested in a number of logistic startups including ShadowFax and Ninjacart. Amazon India was also in talks with Ninjacart to acquire some stake in the Bangalore-based startup, people familiar with the matter said.
In recent quarters, Reliance Jio executives have aggressively reached out shop owners in many parts of India to showcase their point-of-sale machines and incentivize them to join JioMart, many merchants who have been approached said.
Postmates and Uber have filed a complaint in California federal district court, alleging that a bill limiting how companies can label workers as independent contractors is unconstitutional. The complaint, which includes two gig workers as co-plaintiffs, was filed in U.S. District Court on Monday, days before Assembly Bill 5 (AB-5) is due to go into effect on Jan. 1. It asks for a preliminary injunction against AB-5 while the lawsuit is under consideration.
The complaint argues that AB-5 violates several clauses in the U.S. and California constitutions, including equal protection because of how it classifies gig workers for ride-sharing and on-demand delivery companies compared to the exemptions it grants to workers who do “substantively identical work” in more than twenty other industries.
AB-5 was authored by Assemblywoman Lorena Gonzalez, a Democrat representing the 80th Assembly District in southern California and signed into law in September by Governor Gavin Newsom. It is intended to uphold the ruling in Dynamex Operations West Inc. v Superior Court of Los Angeles, a landmark 2018 decision by the California Supreme Court about how employees and independent contractors should be classified, and ensure that gig economy workers are entitled to benefits like minimum wage, health insurance and workers’ compensation.
But the suit’s opponents, which includes tech companies whose business models rely on the gig economy, as well as groups of gig workers and freelance journalists, argue that it restricts their work opportunities and ability to earn money.
In addition to Uber and Postmates, the complaints’ plaintiffs also include Lydia Olson and Miguel Perez, drivers for on-demand companies. In a post on Postmates’ blog, Perez wrote that he joined the suit because AB5 “is threatening the freedom and flexibility I have relied on in recent years to support my family.”
A statement from Postmates said “AB5 is a blunt instrument, which is why lawmakers exempted 24 industries, seemingly at random, from its requirements.”
The company added that does not want to be exempted from AB-5 or reverse the Dynamex standard, but “call for industry and labor talks with the California legislature to modernize a robust safety net designed specifically for the needs of on-demand workers, that establishes a new portable benefits model, creates earnings guarantees higher than minimum age, and gives all workers both the strong voice they need and flexibility they demand—a framework not currently contemplated under state and federal law.”
As proof that AB-5 violates the equal protection clause, the complaint argues that “the vast majority of the statute is a list of exemptions that carve out of the statutory scope dozens of occupations, including direct salespeople, travel agents, grant writers, construction truck drivers, commercial fisherman, and many more. There is no rhyme or reason to these nonsensical exemptions, and some are so ill-defined or entirely undefined that it is impossible to discern what they include or exclude.”
The complaint also alleges that AB-5 violates due process by preventing people from choosing to work for gig companies, and the contracts clause because mandating companies like Uber and Postmates to reclassify contractors as employees will either invalidate or substantially change their existing contracts.
In statement about the lawsuit, Gonzalez said “the one clear thing we know about Uber is they will do anything to try to exempt themselves from state regulations that make us all safer and their driver employees self-sufficient. In the meantime, Uber chief executives will continue to become billionaires while too many of their drivers are forced to sleep in their cars.”
The lawsuit follows several efforts to stop or limit AB-5. In October, a group of drivers for Lyft, Uber and DoorDash announced they had submitted a California ballet initiative for the November 2020 ballot in response to AB-5. The measure which received substantial financial support from those companies, seeks to enable drivers and couriers can continue to be independent contractors while guaranteeing benefits like a minimum wage, expenses, healthcare and insurances.
Earlier this month, several organizations representing freelancer writers filed a lawsuit in federal court in Los Angeles alleging AB5 places unconstitutional restrictions on free speech, the day after Vox Media announced it will cut hundreds of freelance positions in California as it prepares for the bill.