FACTS ONPROP 40.

Facts on Prop 40 / The research

SEIU-UHW RESEARCH · ISSUE BRIEF · SEPTEMBER 2026

California’s Tech Billionaires Are Destroying Jobs

By replacing Bay Area tech workers with AI and misclassifying gig workers across the state, California’s tech billionaires are pushing Californians out of good jobs.

SEIU-UHW Research DepartmentSeptember 20266 pages

Key Takeaways

California’s tech billionaires are attacking working Californians from two directions at once: by replacing tech workers with AI, and by creating a misclassified gig workforce with no employee protections at all.

In the Bay Area, the tech industry is displacing the very workforce it built: Research from the California Policy Lab shows that college-educated workers in “AI-exposed” fields including software developers and customer service representatives saw unemployment claims spike by more than 50% within a year of ChatGPT’s public release in late 2022. Unemployment among these workers has remained elevated since.1 Research shows that this increase is driven by a hiring slowdown, leaving many recent college graduates without work.2

California’s tech and venture capital elite have also spent more than a decade creating a gig workforce with no formal employment rights at all. Companies like Uber, Lyft, and DoorDash refuse to concede that the drivers on their apps are employees, despite the control that these companies have over the day-to-day work of the drivers.3 Today, California has about 350,000 app-based rideshare drivers and 670,000 app-based delivery drivers, who are denied basic worker protections and employer-provided health coverage.4 The people of California are often forced to foot the bill: 29% of California rideshare drivers rely on Medi-Cal and 16% are uninsured.5 When California moved to hold these companies accountable by making rideshare and delivery drivers employees through California Assembly Bill 5 (2019), big platform tech companies spent over $200 million to pass Prop 22, which exempted them from the new law.6

Silicon Valley billionaires are already engaging in class warfare against everyday Californians. Whether you are a software developer or an Uber driver, the tech elite have made it clear that they are happy to push you aside to make their next billion. At the same time, the public is paying for the tech industry’s negligence, from local economies facing spikes in unemployment to public programs like Medi-Cal picking up the slack of widespread worker misclassification.

Section 1: How Tech Billionaires Are Using the AI Boom to Push People Out of Work

Tech billionaires are replacing Bay Area tech workers and customer service representatives with AI, pushing Californians out of good jobs that sustain local economies.

AI job loss is hitting tech workers in the Bay Area

While the AI boom is making billions for some, there is widespread anxiety about AI-driven job replacement across sectors. Thanks to the California AI-Unemployment Tracker (CAIT), the first state tool in the country to detect AI-related job loss, we know which workers are already being displaced in California. Launched in June 2026 in a partnership between the University of California’s California Policy Lab and the California Employment Development Department, the tracker sorts unemployment insurance claims by how AI-exposed the claimant’s last job was.7 Its central finding is that college-educated workers in certain “AI-exposed” occupations saw a sharp increase in unemployment claims due to the rise of AI.

The tracker shows:

  • Unemployment claims from college-educated workers in highly AI-exposed occupations rose more than 50% within a year of ChatGPT’s late-2022 release, and have remained elevated since.8 Software developers and customer service representatives are the two occupations the tracker names explicitly.9

  • The increases are sharpest and most sustained in the San Francisco Bay Area and in the Information and Professional Services sectors.10

Ben Hyman, the California Policy Lab economist who co-authored the tracker, also points out that the losses among software engineers have not been accompanied by the hiring of the “AI-native” engineers the industry promised would replace them.11 The jobs are going away; the replacement jobs are not showing up.

AI’s impact on tech employment in California has also been evident in the news in recent months. In May 2026, Meta laid of 8,000 employees, which made up 10% of its workforce.12 The company also closed 6,000 open positions, with the given reasoning for both being its increased focus on artificial intelligence.13

Research from Stanford’s Digital Economy Lab also shows that hiring has slowed down for recent college graduates in AI-exposed fields. Stanford’s research finds that employment among workers aged 22–25 in highly AI-exposed occupations is running about 19% below where it would be if it had kept pace with same-age workers in less-exposed occupations.14

What it is costing California

Some Californians may wonder why they should care that highly paid, white-collar tech workers are losing jobs. But concentrated losses of high-wage employment reach well beyond the workers themselves. Tech-sector unemployment ripples through local economies as unemployed workers cut spending on everything from restaurants to childcare.

Section 2: How Tech & Venture Capital Billionaires Have Destroyed Jobs Through Widespread Worker Misclassification

The tech and venture capital industries pushed hundreds of thousands of Californians out of good jobs and into precarious gig work by misclassifying rideshare drivers and delivery drivers as independent contractors — stripping these workers of protections and benefits, and shifting the resulting costs onto public programs like Medi-Cal.

Since Uber and Lyft launched in 2010 and 2012 respectively, these rideshare companies have amassed tremendous wealth. Both companies are now publicly traded, with Uber valued at $155 billion and Lyft at $6.7 billion at the time of this writing.15 Uber co-founder Garrett Camp, who is based in San Francisco, still owns 4% of Uber’s stock and has a net worth of $5 billion. Uber co-founder Travis Kalanick has a fortune of $3.6 billion, mostly from selling Uber stock.16 Benchmark Capital, the Silicon Valley venture capital firm that led an early $11 million investment in Uber in 2011, held a stake worth roughly $6 billion after the company went public in 2019.17 SoftBank, another Silicon Valley venture capital invested in Uber, made a $3 billion profit from the company’s IPO.18

Those billions were made in large part by robbing drivers, 350,000 of whom are Californians, of workplace benefits and protections. Uber and Lyft claim that their drivers are independent contractors. But research shows that the tech companies control their drivers — through an algorithm that functions like a boss.19

The tech billionaires behind DoorDash use a similar playbook to misclassify delivery drivers in California. Co-founders Tony Xu, Andy Fang, and Stanley Tang have all become billionaires thanks to DoorDash stock. Like Uber, they created a workforce they refuse to claim responsibility for. DoorDash’s own data shows that there were 670,000 DoorDash drivers in California as of 2021.20 Just like Uber drivers, these DoorDash delivery drivers are denied everything from a minimum wage, to sick leave, to healthcare coverage. While the company claims that delivery drivers‘ wages average above $30/hour after Prop 22, the UC Berkeley Labor Center found that "the employee-equivalent pay of delivery workers in California equaled $4.98 an hour without tips and $11.43 with tips, well below the minimum wage.”21 DoorDash’s billionaire owners have even stooped as low as stealing tips from their misclassified workers: In 2025, DoorFash paid workers $16.8 million to replace tips that the company withheld from them.22

How misclassification shifts responsibility

Classifying a driver as an independent contractor rather than an employee moves a set of costs and risks off the company’s books and onto the worker:

  • Vehicle purchase, financing, fuel, insurance, maintenance, and depreciation

  • Unemployment insurance and workers’ compensation

  • Minimum wage and overtime protection

  • Paid sick leave and rest breaks

  • Employer-sponsored health coverage

  • The right to organize and bargain collectively

California moved against this twice — the California Supreme Court’s 2018 Dynamex decision23, then Assembly Bill 5 in 2019, which established the ABC test and would have made most app-based drivers employees.24 The tech industry answered by pouring $200 million into Prop 22 — the most expensive ballot measure campaign in California history. It passed on November 3, 2020, with over 58% of the vote; it exempted app-based drivers from AB 5, barred local governments from setting higher standards, and required a seven-eighths supermajority of the Legislature for any future amendment.25

The cost shifted onto Medi-Cal and the public

The shirking of employer responsibilities by companies like Uber shifts costs onto the California public. When an employer does not provide health coverage, the workers either have to go without coverage, or they find coverage through public programs like Medi-Cal. A central element of the Prop 22 campaign was the claim that the proposition would allow drivers to access a health care stipend.26 But research after the proposition passed shows that the vast majority of rideshare drivers could not access the stipend, and many still rely on Medi-Cal.

A survey of 531 California rideshare drivers conducted in 2021 found:27

Finding Share of California rideshare drivers
Rely on Medi-Cal for health coverage 29%
Uninsured 16% — double the national rate
Latinx drivers uninsured 25%
Covered through Medi-Cal, Medicare, or a spouse 50% (which disqualifies them from the stipend)
Actually receiving the Prop 22 health stipend 10%
Never heard about the stipend or unsure if notified 40%

According to this survey, the health care benefit that anchored the Prop 22 campaign reached one driver in ten as of 2021.28 Half were covered by public programs or a spouse, and half of those were disqualified from the stipend precisely because they have public coverage — the company avoids the cost twice.

Uber and Lyft poured millions into Prop 22 in order to keep avoiding their responsibilities as employers, and to keep sending California’s public the bill to provide their workers with health coverage.

The Bottom Line

California’s tech billionaires are attacking working Californians on several fronts at once, and the public is paying for every one of them. In the Bay Area, they are using the AI boom to close the hiring door on software developers. Across the state, they have spent more than a decade constructing a workforce of app-based drivers who do the work of employees without any of the rights of employees. And when California’s voters and legislators moved to stop them, they bought their way out.

These are not separate stories. They are the same business model: move the cost of labor off the company’s books, keep the gains at the top, and let someone else absorb what is left behind. In 2020, that meant spending $200 million to keep their employees misclassified. Today it means restructuring high-wage work around automation and simply not hiring.

California’s tech billionaires have their wealth off the backs of working Californians. By replacing tech workers with automation and refusing to hold up their end of the employer-employee relationship in the gig economy, California’s tech industry has been able to amass incredible wealth without giving back to the public that helped them build it.

  1. San Francisco Standard, “AI Isn’t Coming for Your Job — Unless You’re a Bay Area Tech Worker,” July 8, 2026, https://sfstandard.com/2026/07/08/ai-isn-t-coming-your-job-unless-re-bay-area-tech-worker/.↩︎

  2. Stanford Digital Economy Lab, “No Widespread Displacement, but the AI Employment Gap for Young Workers Has Widened to 19%,” August 2026, https://digitaleconomy.stanford.edu/news/canariesaug26/.↩︎

  3. Slate, “Uber Drivers Have a Boss: The Algorithm,” October 2018, https://web.archive.org/web/20260315130206/https://slate.com/news-and-politics/2018/10/uber-lyft-uberland-algorithms.html.↩︎

  4. Berkeley Law, The Network, “Uber, Lyft Win on Prop 22: The Most Expensive Ballot Measure in California’s History,” November 16, 2020, https://sites.law.berkeley.edu/thenetwork/2020/11/16/uber-lyft-win-on-prop-22-the-most-expensive-ballot-measure-in-californias-history/.

    DoorDash “One Year Later, Dashers Earn More Than Ever While Working Flexibly Under California’s Prop 22”, 2021

    about.doordash.com/en-us/news/one-year-later-under-californias-prop-22↩︎

  5. National Equity Atlas and PolicyLink, “Most California Rideshare Drivers Are Not Receiving Health-Care Benefits Under Proposition 22,” 2021, https://www.nationalequityatlas.org/research/analyses/rideshare-drivers-healthcare-prop-22.↩︎

  6. Berkeley Law, The Network, “Uber, Lyft Win on Prop 22: The Most Expensive Ballot Measure in California’s History,” November 16, 2020, https://sites.law.berkeley.edu/thenetwork/2020/11/16/uber-lyft-win-on-prop-22-the-most-expensive-ballot-measure-in-californias-history/.↩︎

  7. San Francisco Standard, “AI Isn’t Coming for Your Job — Unless You’re a Bay Area Tech Worker,” July 8, 2026, https://sfstandard.com/2026/07/08/ai-isn-t-coming-your-job-unless-re-bay-area-tech-worker/.↩︎

  8. San Francisco Standard, “AI Isn’t Coming for Your Job — Unless You’re a Bay Area Tech Worker,” July 8, 2026, https://sfstandard.com/2026/07/08/ai-isn-t-coming-your-job-unless-re-bay-area-tech-worker/.↩︎

  9. California Policy Lab and California Employment Development Department, “California AI-Unemployment Tracker (CAIT),” 2026, https://capolicylab.org/california-ai-unemployment-tracker/.↩︎

  10. California Policy Lab and California Employment Development Department, “California AI-Unemployment Tracker (CAIT),” 2026, https://capolicylab.org/california-ai-unemployment-tracker/.↩︎

  11. San Francisco Standard, “AI Isn’t Coming for Your Job — Unless You’re a Bay Area Tech Worker,” July 8, 2026, https://sfstandard.com/2026/07/08/ai-isn-t-coming-your-job-unless-re-bay-area-tech-worker/.↩︎

  12. New York Times, ”Meta Lays Off 8,000 Employees, as A.I. Casualties Mount”, 2026

    https://www.nytimes.com/2026/05/19/technology/meta-layoffs-ai.html↩︎

  13. New York Times ”Meta to Cut 10% of Work Force in A.I. Push” 2026,

    https://www.nytimes.com/2026/04/23/technology/meta-layoffs.html↩︎

  14. Stanford Digital Economy Lab, “No Widespread Displacement, but the AI Employment Gap for Young Workers Has Widened to 19%,” August 2026, https://digitaleconomy.stanford.edu/news/canariesaug26/.↩︎

  15. Forbes, “Uber Technologies,” accessed September 2026, https://www.forbes.com/companies/uber/; Forbes, “Lyft,” accessed September 2026, https://www.forbes.com/companies/lyft/.↩︎

  16. Forbes, “Travis Kalanick,” accessed September 2026, https://www.forbes.com/profile/travis-kalanick/; Fox Business, “Billionaire Uber Co-Founder Travis Kalanick Admits Strategically Moving to Texas Before California Wealth Tax,” March 16, 2026, https://www.foxbusiness.com/real-estate/billionaire-uber-co-founder-travis-kalanick-admits-strategically-moving-texas-before-california-wealth-tax; Fortune, “Only 6 Billionaires Left California Over Its Proposed Wealth Tax — but They Took $27 Billion in Potential Revenue With Them,” March 17, 2026, https://fortune.com/2026/03/17/6-billionaires-left-california-billionaire-tax-newsom-brin-page-thiel-spielberg-revenue/.↩︎

  17. PitchBook, “11 Big Things: The Winners of Uber’s IPO,” May 12, 2019, https://pitchbook.com/news/articles/11-big-things-the-winners-of-ubers-ipo.↩︎

  18. PitchBook, “11 Big Things: The Winners of Uber’s IPO,” May 12, 2019, https://pitchbook.com/news/articles/11-big-things-the-winners-of-ubers-ipo.↩︎

  19. Slate, “Uber Drivers Have a Boss: The Algorithm,” October 2018, https://web.archive.org/web/20260315130206/https://slate.com/news-and-politics/2018/10/uber-lyft-uberland-algorithms.html.↩︎

  20. DoorDash “One Year Later, Dashers Earn More Than Ever While Working Flexibly Under California’s Prop 22”, 2021

    about.doordash.com/en-us/news/one-year-later-under-californias-prop-22↩︎

  21. UC Berkeley Labor Center, ” Gig Passenger and Delivery Driver Pay in Five Metro Areas”, 2024 https://laborcenter.berkeley.edu/gig-passenger-and-delivery-driver-pay-in-five-metro-areas/↩︎

  22. New York Times ”DoorDash to Pay $16.8 Million to Workers for Pocketing Their Tips” 2025

    https://www.nytimes.com/2025/02/24/nyregion/new-york-doordash-tip-settlement.html↩︎

  23. California Supreme Court, “Dynamex Operations West, Inc. v. Superior Court,” No. S222732, April 30, 2018, https://law.justia.com/cases/california/supreme-court/2018/s222732.html.↩︎

  24. California Legislature, “Assembly Bill 5 (2019),” September 18, 2019, https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB5.↩︎

  25. Berkeley Law, The Network, “Uber, Lyft Win on Prop 22: The Most Expensive Ballot Measure in California’s History,” November 16, 2020, https://sites.law.berkeley.edu/thenetwork/2020/11/16/uber-lyft-win-on-prop-22-the-most-expensive-ballot-measure-in-californias-history/.↩︎

  26. California Healthline, “App-Based Companies Pushing Prop. 22 Say Drivers Will Get Health Benefits. Will They?,” October 28, 2020, https://californiahealthline.org/news/fact-check-lyft-ad-rideshare-companies-pushing-proposition-22-say-drivers-will-get-health-benefits/.↩︎

  27. National Equity Atlas and PolicyLink, “Most California Rideshare Drivers Are Not Receiving Health-Care Benefits Under Proposition 22,” 2021, https://www.nationalequityatlas.org/research/analyses/rideshare-drivers-healthcare-prop-22.↩︎

  28. National Equity Atlas and PolicyLink, “Most California Rideshare Drivers Are Not Receiving Health-Care Benefits Under Proposition 22,” 2021, https://www.nationalequityatlas.org/research/analyses/rideshare-drivers-healthcare-prop-22.↩︎