The News Fix

A win for gig economy apps. An appeals court in California ruled in favor of Uber and Lyft, allowing them to classify drivers for ride-hailing services as independent contractors. The appellate judges’ decision preserves most of Proposition 22, a state law that exempted some gig companies from treating their workers as employees, and mostly reverses a lower court’s ruling. Drivers won’t be guaranteed benefits like a minimum wage, but the judges eliminated a clause that restricted drivers’ ability to collectively bargain or join a union.
 
The battle over gig worker status has only begun. The Service Employees International Union said it will appeal the latest decision over Proposition 22 to the California Supreme Court. At the federal level, the Department of Labor has been considering a rule change that would make it easier for contractors to gain employment status if they can prove they are “economically dependent” on the company they’re gigging for. One study about app-based drivers in San Francisco found that the majority were doing so full time and depended on the work as their primary source of income.
 
Bonus listen! If you want to learn more about what a workforce made up of “nonemployees” means for our future, listen to Season 5 of “The Uncertain Hour,” Marketplace’s investigative podcast. If you want to sample an episode, this one focuses on Proposition 22.

Smart in a Shot

Disney’s Galactic Starcruiser promised the ultimate “Star Wars” experience when it opened last year. Part hotel, part dinner theater on steroids, the two-day “voyage” offered fans a chance to immerse themselves aboard the Halcyon. It’s a fictional luxury spaceliner that, per Disney lore, hosted Han Solo and Princess Leia’s honeymoon. Crew members and a stowaway Chewbacca recruit guests to participate in storylines that play out over the course of a 45-hour stay.
 
But Disney World has struggled to maintain demand, possibly because the price for two starts at $4,800. The House of Mouse said this month that it would offer fewer “voyages” in 2023.
 
Newly reinstated Disney CEO Bob Iger admitted a couple of weeks ago that the company may have been “a little too aggressive” with pricing at its theme parks. Disney has started offering discounts for the Galactic Starcruiser experience. Maybe parkgoers could be persuaded to pay full freight if a certain little, green puppet is onboard.

The Numbers

The three banks that failed this month — Silicon Valley, Signature and Silvergate — all had their feet in the crypto pool. Let’s do the numbers on how digital assets and cryptocurrencies could be impacted by the banks’ collapses. 

24/7
Signature Bank and Silvergate allowed crypto customers to make instant deposits and withdrawals “outside of banking hours” using 24/7 blockchain payment networks. Forbes writer Emily Mason reported that the networks moved more than $2 trillion to and from digital asset markets since 2019. Before these systems were launched, crypto companies had to use bank transfers or the U.S Treasury’s Automated Clearing House to process payments, which were more costly, slower to clear and could occur only during banking hours. 
 
When Silvergate voluntarily closed last week, its Silvergate Exchange Network transaction system shut down. Signature Bank’s Signet system remains operational.

$3.3 billion
Circle Internet Financial, which operates the second-largest stablecoin, USD Coin, had that much tied up in Silicon Valley Bank. The stablecoin, which is supposed to keep a constant value of $1, fell to 87 cents the day after the bank failed.
 
Despite a rebound in its worth after regulators promised to backstop 100% of SVB deposits, nervous traders have withdrawn a net $3 billion from the stablecoin, about 10% of all the USD Coin in current circulation.
 
The collapse of the stablecoin terraUSD last year triggered other crypto companies to go belly up and wiped out hundreds of billions of dollars in cryptocurrency assets. The Federal Reserve’s vice chair for supervision, Michael Barr, said that without stricter oversight, stablecoins could threaten financial stability and urged Congress to pass legislation to regulate them.  

2018
That’s when a bipartisan rollback of Dodd-Frank banking regulations went into effect. The new law raised the asset threshold that triggered strict oversight of a bank from $50 billion to $250 billion. Sen. Elizabeth Warren blamed this deregulation for the failures of California state-chartered banks this month. But former Rep. Barney Frank blamed the failures on the destabilizing nature of cryptocurrencies, not deregulation.  

This week on the podcast

None of us is as smart as all of us

Tell us what’s making you smarter at smarter@marketplace.org. We'd love to include your recommendation in a future newsletter.

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Rooting for your rivals

Editor Virginia Smith is reading a ProPublica investigation about CEOs who make multimillion-dollar bets on the stocks of direct competitors, allowing executives to win big financial returns when their companies lose. It’s less clear whether the transactions amount to illegal insider trading.  

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Lunchables for school lunch?

Producer Alex Schroeder is reading about how Kraft Heinz successfully campaigned to offer its ready-to-eat packaged meals to public school cafeterias. The school-approved Lunchables will taste different from the ones sold in stores because they must meet nutritional standards set by the federal government.

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Tune in, churn out

Co-host and correspondent Kimberly Adams shared this link internally this week. It’s for a “streaming optimizer” tool made by Axios to help you save money on streaming services by paying only for the shows you watch. 

This newsletter was written by Ellen Rolfes.

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