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Stay Up to Speed with DMO People & Places in the News

November 12, 2019 by Laurie Jo Miller Farr Leave a Comment

James Zale, a 17-year veteran of Visit Philadelphia, was named Chief Digital Officer. A thought leader in the space, Zale is on the Advisory Board of eTourism Summit.

Visit Tri-Valley president and CEO Barbara Steinfeld has announced her retirement as of January 2020. Visit Tri-Valley represents four California towns east of San Francisco: Pleasanton, Livermore, Danville and Dublin and is supported by a $2.25 hotel room tax. Applications are being accepted through Nov. 15, 2019.

President & CEO of Visit Baltimore, Al Hutchinson, is named as one of Maryland’s “Most Admired CEOs” for 2019.

Hutchinson serves on the boards of Baltimore Convention & Tourism, Visit Baltimore Education and Training Foundation, the Baltimore Hotel Corp, Downtown Partnership of Baltimore, Inc. and U.S. Travel Association. He also serves as co-chair of the diversity and inclusion task force for Destinations International, trustee of Destination Marketing and serves on the advisory committee for the Religious Conference Management Association. Read more here.

In catch-up news from Visit Baltimore, the organization selected TURNER as its national PR partner and Bellweather Agency as lead creative strategy partner, continuing its relationships with Baltimore-based ad agency TBC and destination marketing expert Miles Partnership.

Nancy Trejos has joined Skift as its new hospitality editor. She was previously a travel writer at USA Today. Trejos has also worked at the Washington Post, Los Angeles Times Associated Press and contributed to Latina magazine.

San Francisco International Airport has put out an RFQ for a marketing communication services partner. Get the details here.

When there’s chocolate involved…New York Gov. Andrew M. Cuomo and Puerto Rico Gov. Wanda Vázquez Garced have announced a new tourism partnership for reciprocal destination promotion. Also, Chocobar Cortés, the Caribbean’s leading largest chocolate producer, will create 100 jobs in The Bronx when they open their first location outside Old San Juan with Chocobar NYC, a restaurant, bar, and coffee shop. And, New York will aid Puerto Rico in developing a new power system to fortify the island’s electric grid, an automated digital substation capable of providing power to as many as 40,000 houses.

CrowdRiff and Destination BC have announced their collaboration on Travel Stories. The first connected story experience for travelers provides a mobile-first, visually immersive experience for trip planning. See it in action at HelloBC.com. To learn more, click for the demo on Twitter and/or the press release here.

ADARA has announced a product update to Destination Marketing Cloud which supports measuring the effectiveness of Google Search Ads and YouTube in an all-in-one application. Get full details here.

So much for the Scottish Crown Jewels and The Royal Mile. Gordon Robertson, director of communications at Scotland’s Edinburgh Airport and chairman of the board at Marketing Edinburgh for the past seven years, has resigned along with the entire board of directors. (The Travel Vertical, 9/24/2019.) At issue, a row over funding. Deep cuts called for 89% of budget to be slashed, heading for £ nil within two years, so there’s no more DMO.

Why is the Mona Lisa trending? Because she’s creating a crowd problem at the world’s most visited museum.

According to Jean-Luc Martinez, director of the Musée du Louvre in Paris, approximately 30,000 people pass through the gallery where Leonardo’s early 16th century painting of the Mona Lisa hangs. That’s 80% of the 10 million annual visitors to the museum, queued up in a TSA-style snaking line for 30 minutes or longer in a small space so stifling that museum guards have gone on strike. People are crushing one another to get a lame selfie with the painting that measures only 2′ 6″ by 1′ 9″ behind its sealed bulletproof glass. Worth it? According to The New York Times, the Mona Lisa was voted “world’s most disappointing attraction” in a poll of British travelers.

Smart tourism initiatives coming out of last week’s 40th annual World Travel Market in London included one from Helsinki, Finland. The problem: “Eighty percent of Chinese people flying to Helsinki airport didn’t stop in the city at all,” said Tia Hallanoro, director of digital development, Helsinki Marketing. The Finnish DMO has mirrored the WeChat experience in cities such as Beijing and Chengdu that offer in-app smart tools including ultra-HD live streaming, interactive virtual reality experiences, advanced booking systems, timed appointments ticketing at busy attractions, transportation, dining reservations, payment, and digital tour guides. Data will be revealed next month to indicate how successful Helsinki has been.

More from WTM:

Leah Chandler, CMO at Discover Puerto Rico, told an LGBTQ seminar that there is huge potential for gay tourism. “Inclusivity is built into our DNA, but the Caribbean is not known for gay travel – some islands criminalize homosexuality. We will be the LGBTQ capital of the Caribbean.”

Chandler outlined the island’s strategy, research and training around the LGBTQ market as well as plans to host the 2nd Annual Connect THRIVE Summit in San Juan on Sept. 30-Oct. 2, 2020.

International inbound US traffic gets a boost as Poland is the 39th country in the visa waiver program. Beginning immediately, Polish nationals are eligible to apply for ESTA, the Electronic System for Travel Authorization, which allows 90 days’ visit without a visa. The last country to join the program was Chile in 2014.

Update on REAL ID: The U.S. Department of Homeland Security is looking into moving part of the application process online to help with the demand ahead of the federal government’s deadline on Oct. 1, 2020, according to a recent request for comment published in the Federal Record. Beginning on that date, travelers attempting to fly domestically without a compliant REAL ID or a valid passport will be turned away at TSA checkpoints. U.S. Travel Administration research shows that 99 million Americans do not have a REAL ID license or passport.

Two brand new job openings from Destination DC: Digital Marketing Manager and Marketing Manager.

Social Media Manager – Brand, Communications & Social Impact at LinkedIn HQ in San Francisco.

Google Gets Fitbit, Puerto Rico Gets Painted Plus People & DMO News

November 5, 2019 by Laurie Jo Miller Farr Leave a Comment

It was bound to happen. A decent finale for 12-year-old Fitbit (eclipsed by the Apple Watch) as Google coughs up $2.1 billion to acquire the business. Apple Watch, which has a core fitness element, is still the big leader at 51% market share.

Did you catch a rather unremarkable new Facebook branding this week accompanied by surprisingly little fanfare? What are they thinking?

“Also, interesting detail…Facebook considered changing the overall company name, like Google did with Alphabet, but thought it would look like they were trying to run away from their brand problems. (That’s exactly what it would look like.)” – Sarah Frier, Bloomberg News. More here.

VISIT DENVER has launched a newly enhanced website feature that caters to the needs of people with visual, auditory and cognitive disabilities. As the destination marketing arm of the city, VISIT DENVER joins a growing number of DMOs that have committed to full ADA digital compliance for an audience that comprises an estimated 15% of web users. Created by AudioEye, which also partnered with Visit Oakland and presented at eTourism Summit 2019, the technology works through a special badge and toolbar placed on the website that allows disabled users to customize the site based on their needs.

***Note: The inaugural TravelAbility Summit is in San Francisco on Nov. 11-12, 2019. Registration is still open.

More digital marketing from the “Mile High City” comes in the conical shape of a Christmas tree. Denver’s “Mile High Tree” is the world’s tallest—at seven stories, it stands 10 feet higher than the tallest-ever Rockefeller Center tree. The 60,000-LED lighted attraction is an effort between VISIT DENVER and community arts partners.

What’s trending: “No Drone Zone.” The FAA declared the skies up to 1,000 feet in a two nautical mile area above the New York City Marathon start line as drone-free. On Sunday, Nov. 3, 2019, Unmanned Aircraft Systems (UAS) were also prohibited above the finish line covering all of Central Park to a mile south of the park.

In more UAS news, the U.S. Department of the Interior ordered the grounding of the entire fleet of 800 drones over a claim that their Chinese origins may pose a threat to national security. The department is reviewing potential security risks posed by drones produced in China or incorporating Chinese parts. The Pentagon had already banned any purchase of Chinese-made drones.

Miami-Dade County commissioners gave the green light to Brightline, soon to be Virgin Trains USA, to develop a station at PortMiami by the end of 2020. It’s the only privately owned and operated intercity passenger railroad in the US. Forty miles of new track will allow for speeds of 125 mph while 129 miles of existing track will allow passenger trains to operate at 110 mph. This will be a US transit first as the only intercity rail system directly connecting a major cruise port with an international airport (Orlando International Airport).

In China-related regulatory news on the social media front, TikTok ownership is raising bi-partisan Congressional eyebrows. TikTok, with more than 30 million monthly users in the US, is owned by China-based ByteDance, although the company claims that data it collects about users is stored in the U.S. According to AdAge, “Brands like Kind, Walmart, Nike, Chipotle, Ralph Lauren, the National Football League and the National Basketball Association have all worked with TikTok.”

Visit Bellevue has launched a new strategy and brand identity announced its Executive Director Brad Jones. The new logo is a symbolic representation that “boldly depicts the allure of aspiration through creativity, innovation, style, and the outdoors,” a perfect balance of geography and ideals that define the Pacific Northwest region outside Seattle. Visit Bellevue hired Cubic Creative Agency of Tulsa, Okla. to develop the brand in a year-long process which included bids, research, creative services, and development of a three-year marketing plan that’s now being executed at a cost of about $150,000. “We talked to a lot of people—a lot of visitors, a lot of locals—and tried to really drill down into what Bellevue is,” Jones said. While print collateral does exist, “as an organization and as a city, we’re really kind of headed toward a digital-first mentality.”

That blank wall—and that one and that one—are reserved for #DiscoverPuertoRicoArt. In partnership with Puerto Rico’s local art community, Discover Puerto Rico launched the “Blank Canvas Initiative,” a call to the street artists and the biggest names in muralism street artists from all over the world to come and share their craft on the walls of Puerto Rico’s streets.

Airbnb was trending on Nov. 1 for all the wrong reasons, including a deadly Halloween party at a California rental property and a shocking nationwide scam exposed. The scam story is a long read, but if you’re so inclined, check it out here.

Chinese conglomerate Fosun has snapped up the Thomas Cook brand name, trademarks, website and social media accounts for $14.2 million. Fosun was a shareholder in the 178-year-old British company which folded in September. Fosun, owner of Club Med, had attempted to save the operator from going under, heading a refinancing arrangement. It now plans to sell Europe package holidays to affluent Chinese travelers.

Chad Wolf has been appointed as the next acting director of the Department of Homeland Security, the fifth in three years. He previously served as chief of staff to former Homeland Security Secretary Kirstjen Nielsen who resigned in April. Wolf was nominated by Trump in February to serve as undersecretary for the Office of Strategy, Policy, and Plans at DHS, a role he currently fills in an acting capacity awaiting Senate confirmation.

Indianapolis—Elaine Bedel will be the first secretary and CEO of the Indiana Destination Development Corporation, appointed by Gov. Holcomb to fill a new role. The new corporation is a public-private agency, meaning that it can raise its own funds, and replaces the Indiana Office of Tourism Development. Misty Weisensteiner, who currently leads the IOTD, will continue in her role until the changeover, at which point she will transition to the IDDC and report directly to Bedel. Bedel moves over from her current role as head of the Indiana Economic Development Corporation.

Lucy Steffens is the new arts administrator for the City of Sacramento. She comes to her new position from the Sacramento Convention & Visitors Bureau where she served for more than 36 years, most recently as director of travel media and film commissioner.

Parvaneh Miller has been appointed director of international tourism for Visit Seattle. She will oversee the organization’s international tourism efforts, including managing seven in-market agencies across Europe, Asia and Australia. Previously, Miller worked in senior sales and marketing positions in different parts of the U.S. Most recently, she was director of sales and marketing at Loews Hotels.

Jim Brody has been named managing director, destinations for The Americas & Asia-Pacific at Lonely Planet. Prior to the move, Brody has been involved with several businesses focusing on products designed to help DMOs with their marketing, promotion and reputation management. He has also served as general manager – destinations for Travelzoo and as senior international sales manager- destination marketing at TripAdvisor.

Locations & Destinations Plus People News

October 28, 2019 by Laurie Jo Miller Farr Leave a Comment

VISIT Milwaukee has a new CEO starting November 18. Peggy Williams-Smith, a lifelong resident, will replace Paul Upchurch. She joins from Marcus Corp. where she is senior vice president of Marcus Hotels & Resorts.

A big year is in store as Milwaukee prepares to host the Democratic National Convention in July. 2020. The city will also host SATW, the Society of American Travel Writers.

“Peggy is well known in the Milwaukee community as a leader and as a woman who makes things happen, so she was a natural choice for the role,” Omar Shaikh, who led the search as the Chair of the Board of Directors, said in a news release. “Ultimately, the search committee was impressed with her vision for VISIT Milwaukee and her passion for the destination.” The press release is found here.

Visit Orlando just got a bigger budget on top of the $54.4 million allocated in the last fiscal year. The existing arrangement paid Visit Orlando 23% of the hotel tax. The new nine-year deal raises that percentage incrementally: 25% in the first year, 27% in the second year, 28.5% in the third year, topping out at 30% in the fourth year and beyond.

Some estimates, which forecast continuing record numbers of visitors, predict the plan will funnel $900 million more to Visit Orlando over the next nine years.

In Washington State, the Tacoma DMO bulked up the region and slimmed down the messaging. Travel Tacoma + Pierce County merged with Tacoma South Sound Sports Commission and that’s a bit too much to pronounce.

Dean Burke, CEO since January (The Travel Vertical, 1/7/2019) announced the combined marketing organization for Tacoma and Pierce County now will be known as Travel Tacoma — Mt. Rainier Tourism and Sports, with a new tagline: MOUNTAIN CITY SEA.

In Texas, the Victoria Convention and Visitors Bureau has been reorganized to report directly to the city manager’s office. Previously, the bureau was part of the city’s communications department. Joel Novosad, who has led Explore Victoria as a manager for three years, is now director of the department.

After 10 years heading tourism development initiatives, Spartanburg Convention & Visitors Bureau EVP Chris Jennings will step down November 15. A nationwide search will take place to fill the position, said Allen Smith, president and CEO of the Spartanburg Area Chamber of Commerce, which oversees the bureau.

Barbados Tourism Marketing has announced that William ‘Billy’ Griffith, CEO, has tendered his resignation effective at year-end when his contract ends. Chairman of the Board, Sunil Chatrani, said the search for a new CEO will commence immediately as the organization transitions into a public/private sector partnership.

Roger Dow, president and CEO of U.S. Travel Association and Chris Rowley, president of the Michigan Association of Convention and Visitor Bureaus, have contributed a joint opinion piece to The Detroit News. Writing about the state’s zeroed out tourism budget, they write, “Shuttering Pure Michigan would not only extinguish a valuable source of tax income, it would also jeopardize the 346,308 Michigan jobs supported by travel and tourism.” Read more here.

Related: “Pure Michigan Funding is Axed”

Three big things from the city that never sleeps:

1) NYC Hudson Yards announced the Western Hemisphere’s highest outdoor observation deck will open to the public on March 11, 2020. One hundred stories up, Edge is 1,131 feet above the ground offering 80-mile views on a clear day. Visitors can opt to lean out over the city up against the angled glass walls, or step out onto the glass floor or take the outdoor stairway from the 100th to 101st floor.

2) Also in Hudson Yards, a massive north wing expansion of the Jacob K. Javits Convention Center will add 1.2 million square feet for a total of 3.3 million square feet. There’s a living roof terrace to accommodate 1,500 and a 55,000-square-foot ballroom, largest on the East Coast. Completion is 2021.

3) Nordstrom has just opened a glass-fronted flagship store with 19-foot ceilings and 54 original art pieces at 57th & Broadway near Columbus Circle. On seven levels at 320,000 square feet, it contains seven owned- and managed- restaurants and old fashioned services like shoes, handbag and small leather goods repairs. Nordstrom was founded in Seattle in 1901 as a shoe store. Above Nordstrom, Central Park Tower is a supertall skyscraper, at 1,550 it’s the second tallest in the US, after One World Trade Center.

In space tourism news, Virgin Galactic is cleared for (financial) takeoff. Shareholders approved the merger of Richard Branson‘s venture with Social Capital Hedosophia, becoming the first human space flight company to trade on public markets, CNBC reports. Listing directly on the New York Stock Exchange as “SPCE,” the combined company will be valued at $1.5 billion. (Sorry, Sir Richard. The perfect name for your venture’s newsletter, The Travel Vertical, is already taken.)

Related: “What’s the Dress Code for Space Travel?“

One item from Google and three items from Facebook & Co.:

Google has announced Touring Bird app (The Travel Vertical, 9/11/2018) will close November 17 when it adds tours and activities to the core travel portfolio.

There are 75,000 experiences in 200 markets offered within the app’s content, originally built inside Google’s Area 120, an experimental incubator for testing products. “Ever since the platform, which functions as a metasearch-like tours and activities discovery and price comparison tool, first emerged in stealth mode in April 2018, speculation has mounted as to if and when Touring Bird would join Google proper,” writes Phocuswire.

Mark Zuckerberg 10/23/2019 in a screenshot from Bloomberg TV

Will policymakers and regulators Chuck Out the Zuck Buck? CNN reports that “Facebook‘s antitrust headache is getting worse.” CEO Mark Zuckerberg admitted that Libra, the platform’s digital currency ecosystem, may not work out. At a Congressional hearing to address Facebook’s proposed cryptocurrency and the loss of key partnerships (The Travel Vertical, 10/23/2019), Zuckerberg admitted “it’s a risky project” and he doesn’t know “if Libra is going to work.”

Beginning on Oct. 25, 2019, a subset of 200,000+ users in select US metros (New York, Los Angeles, Chicago, Dallas-Fort Worth, Philadelphia, Houston, Washington, Miami, Atlanta and Boston) began receiving Facebook News, a dedicated feature being introduced for partnerships with journalism outlets.

The launch will initially include about 200 publishers across four categories (general, topical, diverse, local) including The Washington Post, The New York Times, News Corp., BuzzFeed News, Business Insider, Bloomberg, Fox News, NBCUniversal, USA Today, Los Angeles Times—and many are questioning why—Breitbart News. Some, but not all, of those outlets will be paid for their content that doesn’t appear elsewhere on the platform. A larger rollout is planned for 2020.

Earlier this month, Facebook introduced Threads, a new app for Instagram that’s going nowhere fast, picking up fewer than 0.1% traction in week one. Designed as a Snap challenger, it’s for instant photo-sharing with your Close Friends list and joins the family of IG companion apps: GIF-making Boomerang, collage-creating tool Layout, and its longform video, IGTV. According to Apptopia.com, an estimated 220,000 out of Instagram’s billion-plus users had downloaded the app upon its debut. In comparison, IGTV saw about 1.5 million downloads and Boomerang about 2.8 million downloads in a similar period.

Brian Solis, futurist/author/digital analyst, has exited his role as principal analyst at research advisory company Altimeter Group to be an independent digital analyst for enterprise clients, brands and agencies. “My work will focus on thought leadership, original and custom research, advisory and keynote speaking,” he said. Beyond traditional sales and content marketing, Solis explained that a digital analyst can also serve as an expert B2B influencer. Solis co-created the popular Conversation Prism 5.0 to capture the social media universe.

Our Own Video Interview with Brian Fanzo, Founder iSocialFanz, and Keynote Speaker #eTS19

September 24, 2019 by Laurie Jo Miller Farr Leave a Comment

Do you believe that positivity is contagious? Meet Brian! His 127,000 Twitter followers (plus tens of thousands more on every social channel you can name) are probably happy people…because it’s a joy to listen to this guy. (The gesticulation is pretty impressive too, Brian.)

Not every social media consultant has a degree in computer science, has briefed the Joint Chiefs of Staff at the Pentagon on cybersecurity following five deployments to the Middle East and spent two years at a booming cloud computing startup. After being named to “Top 25 Social Business Leaders of the Future” by The Economist and IBM, entrepreneurship called Brian to create his own personal brand, iSocialFanz.

We caught up with Brian, the brains behind “Press the Damn Button” who describes himself as “Translator of geek-speak, change evangelist, podcast host, emcee and keynote speaker on social media marketing, cross-generational communication, innovation, and digital empathy” to ask him about five things:

what keeps you up at night?
FOMO
marketing tips
consumer behavior
whether we’re going to be carrying mobile phones around in 2039.

Brian’s unrehearsed answers are summarized below and there’s a 7-1/2 minute video as well if you’d rather watch him think on his feet.

https://share.vidyard.com/watch/zkvydAnTk8ykGKXp4Cj2dH?autoplay=1&v=3.1.1

Who’s looking forward to meeting Brian at the 20th Annual eTourism Summit next month?

Q: How does the rationale behind “Press the Damn Button” help us all produce snackable, shareable content?

A: “People don’t have time for crappy content. There’s a difference between creating content in real time and creating content at the right time.” In order to create snackable content at the right time, you have to be willing to press the damn button. Have a strategy, see an opportunity, create some great content in the moment and press the damn button.

Q: Let’s talk FOMO. Digitally-speaking, what keeps you up at night?

A: Emotional marketing is nothing new. But leveraging fear? “Today’s consumers are smart,” and a lot of people see right through the fear of missing out when it’s used to tease sales. What keeps me up at night is when brands lose trust; when someone unfollows, blocks or doesn’t want to be associated with you…that’s way worse than anything else. Jeopardizing trust isn’t worth it. Don’t compromise your entire overall mission because of one campaign. “Your customers want to build trust.”

Q: You’ve worked with some of the world’s great brands. Outside of travel, which brand marketing impresses you as truly outstanding?

A: Travel and tourism is fun and sexy, of course. But I’ve worked with some not-so-sexy brands: IBM, Dell, SAP, Oracle, Samsung. And I love AWAY luggage which is actually in the travel space.

Q: Do you think there are takeaways that can be applied to tourism marketing?

The underlying element is that it’s always about being experience focused. Not what the product is but how it makes people feel. We can educate people about travel. With social media channel takeovers, work with micro-influencers who are already your fans and let them create content for your channel; the content they create doesn’t have to be on their own channel.

Q: Crystal Ball: eTourism Summit is 20 years old, born when the internet was dial-up and search was Ask Jeeves. Do you think we are still going to talking about social media and using laptops in 2039?

A: “No, I do not.” I believe the tech and the medium with which we connect with people move into the background. It will be about how to scale trust, maintain trust, talking about data and privacy. How do we as an industry focus on that trust? We must understand that it’s the consumer who decides what’s valuable…not us as the marketer of a brand, and that’s true for all mediums across the board.

Two New Landmark Laws in California Have National Implications

September 17, 2019 by Laurie Jo Miller Farr Leave a Comment

California is the world’s fifth-largest economy, so it makes sense to keep on eye on actions coming out of Sacramento. (Although a survey says 44% are falling behind in doing so.) Two significant upcoming changes for DMOs everywhere to know about:

I. New California Consumer Privacy Act (A.B. 375 or CCPA)

What: By far the strongest privacy legislation enacted in any state, the new law enhances privacy rights and consumer protection in regard to private data for the nearly 40 million residents of California.

There’s wide speculation that other state legislatures will follow suit and adopt a similar law in their own states.

Tell Me More: Among other provisions, the law states that:

Californians have the right to request that a business that collects a consumer’s personal information disclose what categories and specific pieces of personal information the business has collected;
Californians have the right to request that a business delete any personal information about the consumer;
Californians have the right to direct a business not to sell the consumer’s personal information, which is referred to as the right to opt out; and
Californians can bring a private right of action against a company if there is an unauthorized breach of non-redacted or non-encrypted personal information.

Explain: The definition of “personal information” goes well beyond existing data breach notification law in the U.S. It includes a consumer’s personal identifiers, geolocation, biometric data, internet browsing history, psychometric data, and inferences a company might make about the consumer. It is “information that identifies, relates to, describes, is capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.”

Why Does it Matter? Apologies aren’t enough. “Companies that generate revenue from targeted advertising over internet platforms—such as Facebook, Twitter, and Google—must, as the law is currently written, allow California residents to delete their data…” writes the Harvard Business Review. Companies that deal with consumer data have two options, the author suggests. “Either reform their global data protection and data rights infrastructures to comply with California’s law or institute a patchwork data regime in which Californians are treated one way and everyone else another.” The first option demonstrates why the new state ruling has nationwide implications.

Who? The law applies to for-profit businesses that do business in California and either:

Have annual gross revenue of $25 million or more;
Collect, sell or share for commercial purposes the personal information of at least 50,000 consumers, households or devices; or
Derive at least 50% of annual revenues from selling consumers’ personal information.
The law also applies to affiliated, co-branded entities of businesses that meet the above criteria, even if the affiliate doesn’t do business in California.

When: Effective Jan. 1, 2020.

II. Assembly Bill 5

What: Passed overwhelmingly by the California house and senate, AB5 now heads for Gov. Gavin Newsom’s desk, who has already voiced his support.

California’s new employment bill expands the definition of an employee to include anyone whose work is not “outside the usual course of the hiring entity’s business.” After losing in its fight against the bill, Uber responded with an argument that its drivers are outside the course of its business, calling itself a technology platform, not a ride-providing company.

Why Does It Matter? The bill makes it harder for gig economy companies to prove workers aren’t staff. It has the potential to change employment status for California’s army of 1.5 million freelance workers. Trucking firms, media publishers, cleaning companies and software companies could all find it harder to legally define workers as independent contractors. (There are dozens of exemptions carved out including beauty estheticians and manicurists, lawyers, doctors, accountants, and real estate agents.)

And Beyond California? The landmark legislation is expected to have wide-reaching implications that resonate across the country, impacting businesses that depend on independent, on-demand labor. Observers indicate that other states could follow suit.

Death of the Gig Economy? Other cities and states are considering laws to protect rideshare drivers. Similar bills in Washington and Oregon did not pass but could see renewed momentum. New York City has already passed laws guaranteeing drivers minimum pay without re-classifying their status. Uber, Lyft, DoorDash, Postmates, Instacart and many more tech-based companies are estimated to lose 25% to 35% and will need a rework of their core business models, with costs likely be passed on to consumers.

What Prompted This? Across the U.S., many traditional businesses have shifted to independent contractors as a way to reduce labor costs. Sometimes they misclassify workers to avoid offering costly payroll taxes and benefits like health care, paid vacation and sick time, retirement plans. Contractors can’t apply for unemployment insurance; they aren’t required to be paid minimum wage or overtime; they cannot form a union, they don’t qualify for protection under the Fair Labor Standards Act, Americans with Disabilities Act, or the Civil Rights Act. “Now, for many—especially those working in the tech sector—that will all change,” writes USA Today.

P.S. No wonder Uber Technology has been investing so heavily in self-driving cars. “The ride-hailing company reported $457 million in research and development expenses for its self-driving unit…that was up from $384 million in 2017 and $230 million in 2016,” Bloomberg News reported last spring.

When: Effective Jan. 1, 2020

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