Sep 12, 2019

Axios Login

By Ina Fried
Ina Fried

Caution: Happy Fun Ball may suddenly accelerate to dangerous speeds.

Today's Login is 1,258 words, a 4-minute read.

1 big thing: California plays by its own rules

Illustration: Sarah Grillo/Axios

California's embrace of new rules covering gig-economy employers like Uber and Lyft is only the latest example of the state's willingness to regulate business faster and farther than the federal government.

Why it matters: California is the most populous and richest state and home to 3 of the 5 biggest U.S. tech companies, so its laws often become models for other states' rules — and even de facto national standards, Axios' Scott Rosenberg writes.

Driving the news: The California legislature's passage this week of AB5, a bill that makes it tougher for companies to classify employees as contractors, sets the stage for a drawn-out legal battle between the ride-hailing companies and the state government.

  • While individual drivers and labor groups will take the companies to court to force them to reclassify contractors as employees, the companies will promote a 2020 ballot measure to undo the law.
  • The spotlight is on Uber and Lyft, but contractors are common in every corner of the tech industry, and the new rules could have broader impact. According to one count by an employee group, Google has more than 120,000 contractors, making up more than half of its work force.

Before the state tackled the contractor issue, California had already taken on privacy.

  • It passed the wide-ranging California Consumer Privacy Act in 2018. The law kicks in on Jan. 1, 2020.
  • Concern over the California law's tough requirements fueled business support of efforts to pass a new national privacy law in the current Congress, which would pre-empt state rules.
  • Business leaders hoped they'd get a less restrictive privacy regime from Congress than from California, and as recently as this week, more than 50 CEOs sent a letter to key senators urging them to move on a national measure.
  • But every month that passes makes it less likely that Congress will act — and more likely that companies that do business in California, which effectively means nearly all big companies, will have to comply with the state's new requirements.

The big picture: California's role as America's fallback regulator goes beyond tech.

  • As the Trump administration has pushed to roll back the Obama administration's tough carbon-emissions rules for the auto industry, climate-conscious California has stepped in.
  • Last month the state's environmental authorities cut a deal with 4 automakers Ford, BMW, Honda and VW to voluntarily keep tightening emissions standards through the mid-2020s, albeit slightly less aggressively than Obama's mandates required. Other automakers are reportedly weighing whether to join the group.
  • The Justice Department is reportedly pursuing an inquiry into whether the manufacturers' move represents anticompetitive collusion, while the Environmental Protection Agency and the Transportation Department are threatening legal action against California regulators. The president has complained on Twitter.

Yes, but: In one recent high profile case of states going after a business, California hung back while others took the lead.

Meanwhile: Uber say that despite California's changed rules it doesn't plan to reclassify drivers as employees, arguing that driving isn't part of its core business. Kia Kokalitcheva has more here.

2. Exclusive: Larry Ellison reboots philanthropic effort

Larry Ellison. Photo: Gregg DeGuire/WireImage

Larry Ellison is relaunching his foundation, broadening its scope to include global education, improved agriculture and protection of endangered species, along with the existing medical work.

Why it matters: The 75-year-old Ellison signed on to Bill Gates' Giving Pledge back in 2010, agreeing to donate nearly all his wealth, but has thus far been pretty quiet on the philanthropy front, save for some investments in medical research.

Unlike the way some other large giving efforts are structured, Ellison isn't planning on his foundation spending down its fortune in his lifetime, but rather hopes the resources will last in perpetuity.

Yes, but: there is no specific dollar target in terms of how quickly Ellison will divest himself of the bulk of his worth, estimated at between $65 billion and $70 billion.

The foundation's staff is currently at 8–10 people, and I'm told it may add another dozen people over the next year or so. However, it isn't looking to follow the model of the Gates Foundation or other foundations that hire lots of subject matter experts.

What they're saying: As in business, Ellison says he is looking for a return on his investment.

"Good motives are rarely enough," he says on the foundation's newly relaunched website. "Good philanthropy needs the ambition to make sustainable change and to not be satisfied with results that fall short of this."

Meanwhile: Ellison is also finding himself with more work on his plate at Oracle. On Wednesday the company announced that co-CEO Mark Hurd is taking a leave of absence for health reasons, with his duties to be shared by Ellison and the company's other co-CEO, Safra Catz.

3. Salesforce makes latest gift to Bay Area schools

Photo: Salesforce

Speaking of philanthropy, Salesforce is granting another $18.2 million to Bay Area education efforts, including $8.5 million to the San Francisco school district and $8.7 million to Oakland's schools, along with another $1 million going to two area nonprofits.

Why it matters: What began as an effort to equip San Francisco middle schools with WiFi in a dozen schools in 2013 has turned into a major source of outside funding for Bay Area public schools, with contributions of more than $67 million over the last 7 years. Salesforce has also expanded its efforts beyond San Francisco to other places where it has large operations, including Indianapolis and Chicago, as well as locations in Europe and Asia.

The latest donations are designed to give the principals at each San Francisco and Oakland public school $100,000 to use as they see fit. In years past, schools have used the money to fund coaches and counselors, visits to colleges and other efforts. Some schools have pooled their money to fund a full-time teacher shared among them.

The bigger picture: Salesforce is hoping its effort will be replicated by other companies in their hometowns as well.

"We can only do so much," Salesforce chief philanthropy officer Ebony Frelix told Axios. "That’s why we are doing a call to action. There's so much more to do."

Even in San Francisco, Frelix notes that there are still plenty of high schools and elementary schools that could use some corporate love.

4. Study: Consumers know their data is being abused

Consumers know their data is being abused and they aren't happy about it, according to a Harris Poll study commissioned by IBM.

According to the study:

  • 7 out of 10 people say they know their data doesn't necessarily stay with the original company they share it with. And over half of them have personally had their data compromised, or know someone who has had their data compromised.
  • Consumers say they value their privacy more than product quality, by a score of 53% to 44%.
  • Two-thirds of those surveyed strongly believe that businesses should be doing more to protect their data.
  • More than three-fourths of those surveyed say they would share more data if they could later take it back.
  • The vast majority of those polled (84%) agreed with the notion that consumers have lost control over how personal information is being used by companies.

Meanwhile: IBM is releasing the study in conjunction with the launch of the z15 mainframe, which it says leads the industry in terms of managing privacy across hybrid, multi-cloud environments.

5. Take Note

On Tap

Trading Places

  • Former FBI deputy director Sean Joyce, who joined Airbnb as head of trust back in May, has decided to leave the company. He will be replaced by Margaret Richardson, former chief of staff to Attorney General Eric Holder.
  • The Telecommunications Industry Association named David Stehlin as its new CEO, effective Sept. 23. Stehlin was previously a general manager at testing firm Spirent Communications.

ICYMI

  • Lines in the code for iOS13 offer some hints into the augmented reality device testing going on inside Apple. (9to5Mac)
  • Palmer Luckey's border surveillance tech firm Anduril Industries has secured funding that values it at more than $1 billion. (CNBC)
6. After you Login

As long as we are talking "SNL" bits, nothing beats Celebrity Jeopardy in my book.

Ina Fried