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Startups Built on Exploitation Don’t Deserve to Survive

So Uber and Lyft may have to face the music that their drivers are finally considered employees in the state of California.

There’s been a lot of talk about how the ruling will ultimately be the end for Silicon Valley, how it will stifle innovation, how it will cost the state of California valuable jobs.

Good. Uber and Lyft deserve to go out of business.

Don’t get me wrong. There are thousands of fiercely talented people working at Uber and Lyft — including many of the drivers — but that’s got nothing to do with it. The problem is that, like the fast-food industry, exploitation is literally central to the business model of these companies. We know this, and yet we continue to use these services. We use them because they’re too convenient not to use. They’re designed that way.

We tell ourselves things like Lyft is better than Uber. I certainly think so. I haven’t used Uber since it ordered drivers in New York City to break the picket line at JFK International when the New York Taxi Workers Alliance protested Trump’s illegal and unconstitutional travel ban. Still, better than awful is still pretty awful. I can choose Lyft over Uber and feel a little better about it, but the better course of action would be to not use either and ride a bike.

We can point at Uber and say things like post-Kalanik and move slow and test things, but Uber deserves every last criticism for exploiting the thousands of “independent contractors” who drive for the company — not to mention Uber’s utter contempt for the law. Kalanik may be gone, but it’s business as usual at Uber.

Whether Dara Khosrowshahi can turn Uber around as a business — and a brand — is one thing, but one aspect of Uber’s operations that Khosrowshahi absolutely will not address is Uber’s relationship with its drivers. If anything, Khosrowshahi’s focus will likely be on navigating the ongoing PR crisis surrounding its driverless vehicle project — and expanding it as quickly and cheaply as possible — not suddenly recognizing the rights of the human beings who do most of his company’s driving.

There has also been a lot of predictable chatter about whether the new court ruling may “force” Uber and Lyft out of California. Speaking via email with Ars Technica, Michael LeRoy, a professor of labor law at the University of Illinois at Urbana-Champaign, said it seemed unlikely that Uber would remain in California as a result of the ruling.

“It’s hard to see Uber sticking around to bear these new costs. Over time, they might consider withdrawing from this immense market and become more focused on international markets with huge populations and far less regulation.”

Uber still isn’t profitable — and that’s after everything it’s already done.

The real question isn’t whether ride-sharing services will remain in California — though it’s an important question — but how the ruling will impact how startups and venture capitalists perceive labor, and whether emerging businesses will adopt more sustainable, ethical approaches to growth.

It’s deeply saddening to think that, ultimately, investor impatience is more likely to kill Uber than opposition to its odious business model.

When the mainstream news media talks about damage, it usually means financial damage. Dollars wasted, productivity lost, costs incurred. But companies like Uber cause more than just economic damage. They cause social and cultural damage, and that’s what really matters. It matters because the behavior of companies like Uber normalizes treating human beings like disposable commodities or resources to be expended. It rewards business models literally built on the backs of exploited workers. It asks whether using advances in medical science to cure patients is a sustainable business model.

It’s time we stopped rewarding companies for callous indifference to basic human dignity, and start investing in companies that invest in people. If Uber and Lyft cannot survive without exploiting the drivers who power their empires, then they deserve to fail.

If you ask me, they can’t fail fast enough.