When a tech company moves to your city, the effects ripple far beyond just the people it employs. It can impact thousands of ancillary jobs – from teachers to nurses to construction workers – as well as the community’s housing, transportation, health care, and other businesses. And too often, these impacts can be negative.
This episode is also available on the Internet Archive and on YouTube.
Catherine Bracy, co-founder and CEO of the Oakland-based TechEquity Collaborative, has spent her career exploring ways to build a more equitable tech-driven economy. She believes that because the technology sector became a major economic driver at the same time deregulation became politically fashionable, tech companies often didn’t catch the “civic bug” – a sense of responsibility to the communities in which they’re based – in the way that industries of the past might have.
Bracy speaks with EFF's Cindy Cohn and Jason Kelley about following the money and changing the regulations that underpin the tech sector so that companies are more inclined to be thoughtful about supporting, not exploiting, the places and people they call home – creating stronger, thriving communities.
In this episode you’ll learn about:
- How the venture capital model of funding contributes to tech’s reticence on civic engagement.
- How the “platform mentality” affects non-tech workers and their communities.
- Why the law should treat tech companies the same as other companies, without special carve-out exceptions and exemptions.
- Why tech workers being well-informed about their companies’ and products’ impacts, as well as taking active roles in their communities, can be a game-changer.
Catherine Bracy is a civic technologist and community organizer whose work focuses on the intersection of technology and political and economic inequality. She is the co-founder and CEO of TechEquity Collaborative, an organization based in Oakland, CA, that mobilizes tech workers and companies to advocate for economic equity in our communities. She was previously Code for America’s Senior Director of Partnerships and Ecosystem, where she grew the Brigade program into a network of over 50,000 civic tech volunteers in more than 80 U.S. cities. She also founded Code for All, the global network of Code-for organizations with partners on six continents. During the 2012 election cycle she was Director of Obama for America’s Technology Field Office in San Francisco, the first of its kind in American political history. Earlier, she was administrative director of the Berkman Center for Internet & Society at Harvard Law School.
Music
Music for How to Fix the Internet was created for us by Nat Keefe of Beatmower with Reed Mathis. This podcast is licensed Creative Commons Attribution 4.0 International, and includes the following music licensed Creative Commons Attribution 3.0 Unported by their creators:
- Warm Vacuum Tube by Admiral Bob (c) copyright 2019 Licensed under a Creative Commons Attribution (3.0) license. Ft: starfrosch
http://dig.ccmixter.org/files/admiralbob77/59533 - CommonGrond by airtone (c) copyright 2019 Licensed under a Creative Commons Attribution (3.0) Ft: simonlittlefield
http://dig.ccmixter.org/files/airtone/58703 - Drops of H2O ( The Filtered Water Treatment ) by J.Lang (c) copyright 2012 Licensed under a Creative Commons Attribution (3.0) license. Ft: Airtone
http://dig.ccmixter.org/files/djlang59/37792 - Additional beds and alternate theme remixes by Gaëtan Harris.
Transcript
SFX – City scene – Traffic, downtown Oakland
CATHERINE BRACY
September 2015, Uber announced they were buying an old Sears department store building in downtown Oakland and turning it into a satellite headquarters that would house 2,500 employees. And at the time I was living across the street, so I was very interested in what was going on there in my front yard.
The concerns with Uber moving to town were that it was going to displace people. That the growth it was bringing was, instead of creating opportunity for more people, it was just going to wash people out. And it was a rational reaction, frankly. I think that by 2015, people were seeing that the growth of tech was causing more displacement and inequality in the Bay Area than it was creating broad-based growth.
And I think that backlash is starting to rise in places like Austin and Boise. We're seeing people say, "Wait a minute. Maybe this wasn't the unmitigated good that we thought it was going to be."
end of SFX
CINDY COHN
That’s Catherine Bracy. She’s talking about a trend that we’ve seen over the last decade, and there’s real concern that trend is being replicated across the country.
Theme Music in
CINDY COHN
I’m Cindy Cohn, the Executive Director of the Electronic Frontier Foundation.
JASON KELLEY
And I’m Jason Kelley, EFF’s Associate Director of Digital Strategy.
This is our podcast: How to Fix the Internet.
Theme music ends
CINDY COHN
The idea behind this show is that we're trying to fix the internet. We're trying to make our digital lives better. You know, EFF spends a lot of time talking about all the ways things can go wrong and jumping into the fight when things do go wrong, but what we're hoping to do with this podcast, for all of us, is to really give us a vision of what the world looks like if we get it right.
JASON KELLEY
Today we’re talking to Catherine Bracy. She’s the Co-Founder and CEO at TechEquity Collaborative – which is a group that uses civic technology, technology policy, and digital democracy to make the Internet a force for more equitably distributing power and wealth.
CINDY COHN
We are going to talk about two things today. First we’ll talk about what happens when a big tech company moves to town, and how that often feels different than, say, when a car company came to to town in the 1980s. And second, we want to look at the funding that supports today’s tech companies. Because the source of the funding really determines what kind of corporate citizens they are and what kind of relationship they’re going to have with the local communities.
We’ll start with the direct impacts of ‘where’ tech companies choose to set up shop.
Music sting
CINDY COHN
Welcome Catherine. I've lived in the Bay Area for a long time now and I've seen the impact that the tech industry has had on the people who live here. And I'd love to believe that tech can bring broad based growth and opportunity. What does that look like to you? How will our communities and businesses look differently if we get there?
CATHERINE BRACY
We think that the two main avenues to getting to this place where a growing tech economy is creating opportunity for everybody is there's abundant, affordable housing so that everybody can afford to live close to the economic opportunities that are being created. And that there are good job opportunities, not just in the tech industry, but that all the jobs that a growing, booming economy is creating are available to everybody and that they're good jobs. We need school teachers, we need nurses, we need people to fix the roads and build the roads. And all of those jobs should be high quality family supporting jobs.
JASON KELLEY
So you had a keynote where you talked about how excited people would be if they announced that a company was coming to Detroit because that's, I think where you're from. Compared to how you felt when Uber had announced when it was coming to Oakland. Why do we feel such hesitance when we think about tech coming into new places?
CATHERINE BRACY
Yeah, I mean, it's a complicated answer. And yes, I grew up outside of Detroit in the eighties at a time when a company announcing that they were bringing thousands of good jobs to an economically depressed urban center, it would've been met with celebration. And when Uber announced they were moving to Oakland, it definitely wasn't. It was met with whatever the opposite of celebration is, organized protest for one thing, a campaign called No Uber Oakland. And this caused me to do a lot of thinking about what those differences were.
And they're layered. I think there are sort of jurisdictional differences. California and Michigan are two very different places and there are certain regulatory regime, and years and years of policy choices that have made it harder to build housing in California. And that entrenches wealth in a property owning class in a way that it doesn't in Michigan, but also in Detroit in the eighties, obviously labor unions were very strong and the jobs that a car company would be bringing to a place like downtown Detroit at that time, where everybody knew they would be good jobs, because they would be union jobs.
So I think that's a really important point. And it's not just tech’s fault that labor protections have been eroded over the last 40 years. I mean it is sort of timing. Tech came to prominence as sort of the industry that was the engine of the economy at the apex of deregulation. In some ways any industry coming to power at the time that tech came to power would've had the same effect. So I want to be fair to tech that this isn't all specific to the industry. But there is … somehow tech didn't get the civic bug in the way that industries of the past have gotten.
There was some sense from business leaders in the past that they had a responsibility to the communities where they were building companies whether they wanted to or not, they played along. And tech never really did that. And when we started TechEquity, that was really the thing we were trying to address was why was it that tech wasn't really at the table when it came to talking about these really big civic issues at the local level where their companies were headquartered?
CINDY COHN
I do think there may be a sense in tech that people were free from the particular place where they lived. But I think that the dark side of that might be this idea that you're somehow separate from the place where you live and the other people who you pass on your way to work. You may be bodily there, but your mind and your heart and your soul are in this other realm.
But this is a time when the idea that local and even national officials had much control over how business should work was on the wane. And so these companies didn't think that they were beholden to the communities where they were listed, because there weren't a lot of constraints. And we were, as you were saying, kind of hollowing out the constraints that had come before.
CATHERINE BRACY
Yeah, I think there's a lot of truth to that and the charitable perspective to those tech leaders is that they really are global companies. They operate in a more digital environment, less beholden to geography. And there's a lot of things that are good about that. And that the issues that they were facing from a public policy perspective because of that global reach were profound. And they can be forgiven, I guess, on some level for being distracted by protests in the Middle East or privacy and surveillance in Russia. And not worried about the housing crisis or property tax policy in California.
Music in Sting
CINDY COHN
One of the things I really appreciate about your work and your thinking here is that you really like to talk about the role that venture capital plays in this. And I think it's a really important piece that often gets hidden in the conversations. We tend to like to talk about the Mark Zuckerbergs and the Elon Musks, the kind of individual billionaire folks as opposed to what they really stand on, which is this other industry, the venture capital industry.
CATHERINE BRACY
Yeah, and it's one of those things that it feels very obvious when you say it, but nobody's really explicated it. So I'm doing that right now. I'm actually working on a book about the role that venture capital plays in all of these economic issues. And it's just true of anything where if you want to understand how something works, you should look at the economics of it and what the economic incentives are that underlie whatever that thing is. And venture capital is the economic system that underlies the tech industry. And I really think when we look at any of the harms, not just the economic harms, but the harms to democracy, the harms to public health, all of the issues we ascribe to tech in our communities these days, I think you can tie all of them back to that economic structure and the incentives of venture capital.
So, anyone who understands venture capital knows that these are the returns that venture capitalists are expecting are much higher than you would get from other places that rich people put their money. And so, that expectation gets transferred to the companies who receive venture capital investing, and they're all pushed to fit this mold of the rocket ship company that's going to hit unicorn and kind of do it with this blindered mentality that they just have to drive towards maximized profit and nothing else matters,
CINDY COHN
How do you see that play out on the ground in the places that you think about for equity?
CATHERINE BRACY
So the two issues that, like I said, that we work on are housing and workforce and labor. I think in the labor sector, obviously this has been a huge issue. The gig economy has been on the front pages for several years now in terms of how it is eroding labor protections even more than they had been eroded. And I think that a lot of people argue this is about money and it is. And it's very clearly less expensive to the gig companies if they can pay their workers as contractors rather than as full-time employees. But there's also something else going on here, and it comes from the set of business models that venture capitalists accept as sort of venture scale business models. And one of them is this sort of double-sided marketplace where you've got sellers of a thing on one side and buyers of a thing on the other, and the company is just the platform that connects those two and that creates this huge market.
And those are the kinds of companies that gig companies want to be. That's the business model they have sold to venture capitalists. So, if they are in a world where actually they employ a set of drivers or whoever workers, that provide a service to a customer, they are no longer a platform that is connecting those two. They are now the purveyor of whatever that service is. So instead of Uber being a software platform, Uber is now a taxi company or a transportation company. And if you read their terms of service, they have in huge font, all caps font, "We are a platform, we are a software provider, we are not a transportation company." And that is a signal to investors above all, that their business model has the ability to get to that scale that if they were just a transportation provider, they wouldn't have been able to sell the valuation that they were able to sell to their investors.
CINDY COHN
So there's this platform mentality that these companies are growing, they want to have these two sided markets. How does that end up impacting the humans on the ground that we're concerned about?
CATHERINE BRACY
So, I think that there's this sort of facade that they have to protect on the ground. So with let's say Uber drivers, I hate to keep picking on Uber, but they make it easy. The drivers who really, their expectation is that they are working for Uber as a driver. They are treated though as if they are this sort of professional driver and that they have their own sort of LLC or business set up and they have the sophistication to manage that system. And that expectation is not shared by the people who are driving. And many of these folks are at a power disadvantage, put it that way, to the companies where they're not necessarily savvy about these things, they are trying to make ends meet. So they're desperate.
So that power dynamic really creates harm and there's no recourse for the workers when
something happens to them because they are assumed to be an independent business. So, that's one example. I think in the housing sector, we're starting to see this come up a lot in residential prop tech, given where the housing market is now and how much harder it has been to get on the property ladder. A lot of venture backed housing tech companies are taking advantage of the desperation that many first time home buyers feel to sell them these alternative financing models that are not clear, very complicated, have certain hidden fees in them and are really targeting a community that isn't necessarily very savvy. The industry isn't regulated, and the power dynamic there is similar where there are these information asymmetries that make it really hard for the customer to know what's going on. And of course the company is very much incentivized to make as much money off of them as possible and bad things ensue.
CINDY COHN
So a lot of the venture-funded companies are built around what can get them investment and a high valuation, and that lends itself to creating an imbalance for the workers in some instances, and for the customers in others. Another example of an industry where we've seen sky-high valuations and then collapse in a lot of cases, taking down a lot of customers and companies, is cryptocurrency.
CATHERINE BRACY
Yeah. Like banks are the way they are because shit went wrong when we tried to do it without banks and without regulation. And now we're finding out the crypto industry is basically just reinventing the banking sector and they're going through all of the missteps that people went through 400 years ago or whenever, and now they're figuring out why we did it the way we did it. And I think that that's true across a lot of different sectors.
Venture capital is playing a role there as well because they push these business models that are, "Oh, you're not a taxi company, you're a platform." Well in practice, you're a platform and it's like Coinbase is a bank essentially. They are a middleman and the whole idea of crypto was supposed to be, "We're decentralizing everything." And then all of a sudden you just see all these venture-backed middlemen spring up in the industry. It's like you're just repackaging the thing that used to exist that you say you are disrupting or displacing. And really just replicating the harms that existed before we regulated those industries.
CINDY COHN
Yeah. And that's why keeping your eyes on the venture capitalists is so important.
CATHERINE BRACY
Yeah.
Music interlude
JASON KELLEY
I want to jump in here for a little mid-show break to say thank you to our sponsor.
“How to Fix the Internet” is supported by The Alfred P. Sloan Foundation’s Program in Public Understanding of Science and Technology. Enriching people’s lives through a keener appreciation of our increasingly technological world and portraying the complex humanity of scientists, engineers, and mathematicians. So a tip of the hat to them for their assistance.
CINDY COHN
One of the things we like to do on this show is to articulate the approach that someone is thinking of as a way to solve a problem. And some of this comes from Larry Lessig’s seminal work of Code.
And there’s four that Larry articulates. One is physical or architectural change - that’s the code in Code. Other times we look at market forces that can help change behavior, other times we look at the social or cultural norms that are being thought about as a way to change behavior. And sometimes we look at legal or regulatory ways that we try to make better change.
And it’s that fourth one that Catherine says she sees as the clearest path forward for the things she’s thinking about.
CATHERINE BRACY
I don't think we have to regulate these companies any differently than we would other types of companies. But there's some sort of special treatment that tech companies think they deserve, just for being tech companies in some ways. So there's no reason that rent-to-own companies shouldn't have to abide by the same rules that traditional mortgage lenders have to abide by when they're selling a house essentially to a buyer. There's no reason that gig companies should be exempted from labor regulatory frameworks and the arguments that they make against them really seem to amount to, "We're special in some way."
Or there's something specific about how they're working that makes them different than other companies or employers in the space. And really that's just brand magic. It's not actually real when you look at the fundamentals of how they operate but it also requires regulators to look at them in the context of the larger economy and not just as the sort of separate sector. And Mark Andreesen was right, that software is eating the world. It is not necessarily a separate industry at this point. It's just sort of imbued across the economy and continuing to think that there's some special carve out for tech is allowing these problems to persist.
CINDY COHN
It's interesting to think about the levers of power that you're using. You started off as kind of a civic programmer actually using code to try to make things better. Now I'm hearing as well, beginning to use law and regulatory structures to try to make some change along with talking directly to the people who run these kinds of companies, really building the social mores, but specifically around the money as three of the levers of power that help try to make some change.
How does that conversation go with an actual VC and the people who are driving the money and the financing of some of these systems?
CATHERINE BRACY
Well, I mean, I think it's hard to paint with a broad brush. I think venture capital is very... There's a spectrum and I think the actors who are driving the worst outcomes are not talking to me. So the venture capitalists that I have-
CINDY COHN
Happens to me too.
CATHERINE BRACY
So I couldn't really tell you what they're thinking. You know, the venture capitalists that I speak to are open to critique, and also still fundamentally committed to the basic ideas of venture capital and what venture capital can unleash in the world. So the conversations are friendly. I don't know that I'm changing anybody's mind. And I think if we are to achieve broader change, you really do need to let go of some core fundamental assumptions of things that people really are bought into as a value system. And that's very difficult to do.
CINDY COHN
Yeah, I would think it would be as well. If we get them, let's say we get a critical mass of venture capitalists to really start buying into a world in which we have safety nets and guardrails around some of these businesses to make sure that they're supporting people and not exploiting people. What does it begin to look like?
CATHERINE BRACY
I don't think there's a world here where this happens voluntarily. So getting their buy-in isn’t really... I mean it'd be nice for them to do it voluntarily, it would require them to leave money on the table and somebody's going to come and take that opportunity from them. If there's money to be made, somebody's going to do it. So we need some sort of regulation.
CINDY COHN
So I think that one of the things that I'm hearing coming out of this, is that the role that law can play and when regulation and law are the same in this context, I think, is to set a floor that everybody has to operate above in terms of protecting people. And this is not a new thing. We don't let people sell themselves into indentured servitude anymore. We decided that's a floor as a legal matter and that raises it for everyone if you can't do that, and it may mean that the costs go up a little bit, but we set that floor and that's one of the things that law can do.
CATHERINE BRACY
Yeah, but it's a little bit whack-a-mole to do it that way. If you just come in and say, "Okay, we're going to regulate that bad thing" that was the outcome, instead of stepping back and saying, "The reason all of these companies who have the same economic incentive structure end up going on to cause harm is because of the economic incentive structure."
And we have to figure out how to regulate that in order to prevent whatever future harm we can't even imagine right now. And I think that this is part of the conversation about antitrust and how we regulate monopolies. And I don't know that the FTC or the Biden administration is thinking about the role of venture capital in this, but they should be. Because regulating Facebook and Amazon and Google is fine, but there's going to be another set of monopolies coming down the pike in the next 10 years and they might be selling something completely different with a totally different business model. I mean, crypto's a great example. So if we don't figure out how to reign in the economic structure, we're just going to be repeating the cycle every time a new generation of unicorns breaks out.
CINDY COHN
Ooh, you just took a hard problem and made it harder for us. But I appreciate it. We've got to be clear-eyed about this stuff.
JASON KELLEY
I wonder if there's a role for the individual at some of these companies to play. Are there ways that individuals at these companies, who I think are probably a lot of the folks listening to this podcast, can make shifts? What opportunities to pull those levers of power do individuals have or do you think that they do?
CATHERINE BRACY
This is such a hard question.
JASON KELLEY
Sorry.
CATHERINE BRACY
I know, because we're focused on structural changes and by definition those are not changes that people can make on their own. So there has to be some collective response. So it's really hard to say, "You as an individual, this is the thing you can do that's really going to be a difference maker." One thing we have found, and it sounds really trite, but knowing really is half the battle. And we find that especially at these housing companies, many of the people who work there don't really understand the history of discrimination and segregation in the housing sector.
And that feels like table stakes for if you're going to be working at a company that is doing something in the housing market, you should know what redlining is. And so I think if it's hard to say if you're not at a housing company, what is the equivalent of that at wherever you work? But it would be worth trying to figure that out. The other thing I would say is you should just have greater self-awareness about where you are. I know a lot of tech workers left the Bay Area and have settled somewhere else. Be a good neighbor. It also sounds trite, but make where you live more than just like a remote office. Really get invested in the community and learn how you can use your outsized civic power, and tech workers absolutely have a disproportionate amount of civic power. Learn how you can use that power to help support the people around you, who don't have necessarily as much power as you do.
JASON KELLEY
Is civic tech an option if you're thinking, "I would like to work in tech but do good." Is that a sort of actual place people can think about going? You have more experience with it than most I think.
CATHERINE BRACY
Yeah. I mean I would encourage people to consider looking to work in government, not necessarily a civic tech company, but do public service directly. I think civic tech as a sector is not immune from the rest of the issues that private tech companies experience. And many of them are also venture backed and are facing the same challenges and pressures that a housing company is facing. So it's not just because it's a civic tech company or its primary customer is government, doesn't automatically mean that it doesn't have a problematic business model.
So, I think you have to take the same critical lens to civic tech as you do to any other sector in the tech industry. But if you really believe that government should work for people, then I think looking to bring your skills into public service directly is a really good opportunity.
Music sting
CINDY COHN
So, let's see if we can draw some of this together. We know that the path forward is not easy, but it sounds like our goal here is to get to a place where when a tech company decides to come to your town, you're excited because it means good jobs, it means good housing, it means support. It means that the community as a whole is going to benefit from the additional, not just economic activity, but hopefully even civic activity that these folks are going to bring to your town. Is that fair? Is there more you would say?
CATHERINE BRACY
Yeah, that's true. And then also that part of... It's hard to consider those outcomes in a vacuum that the companies, the products they're building, the services they're selling, the business models that they employ, also have a role to play. And so, if it's Uber coming to Oakland, for example, it wasn't just the impact that Uber's physical presence was going to have in Oakland, it was also the fact that they had what people thought was an exploitative business practice in the way they treated their drivers. So, all of this stuff kind of sits together and has to be talked about holistically.
JASON KELLEY
That's a beautiful vision to imagine that you could be looking for a job and the ones that you find can be in places you're excited to live and improve the community and doing things that are beneficial to the world. I think that that would be lovely.
CATHERINE BRACY
I was just going to say, I started all of this as I think like you both, I was sort of an OG internet person in the very early days and really believed in the democratizing potential of the internet. And I still think that the industry that's growing up on top of the internet should live up to those original values, but it's become very clear to me that it's not going to happen on its own. And that we need people, especially the people who are building the tools and companies to really care about those values and to fight for them. And so, that's kind of the call to action for all of us is to remember those original values and realize that in order for us to really achieve them at scale, we have to do the hard work of making sure that the industry goes in that direction.
CINDY COHN
Oh, thank you so much. That's such a hopeful place to end on. I think that we're in strong agreement. The original vision of the internet being, digital world's being a way that we could do better than the world before us is still worth it. But we have to be clear-eyed about the fact that not only is that not happening in many places, it's building something that's worse and that's making us relearn some of the lessons of the past. But I think that you've got to start with hope and you've got to start with the vision. And I think I appreciate you continuing to dig in to try to make it better, even as you bring a clear view.
CATHERINE BRACY
Yeah, thanks for having me. It's been an honor.
Music sting
JASON KELLEY
Well, that was a really great conversation with a lot to unpack. And Cindy, I wonder if you have from that conversation just a, a, a nugget of wisdom that you're going to use, you know, in the future or that you kind of are gonna keep thinking about as you recall this conversation later in the week or in the month.
CINDY COHN
I mean, I think that her vision of a world in which people are excited because a company comes to town because they're gonna bring good and sustainable jobs is a vision I really wanna hold onto, but I think she also complicated the story a little bit because what she said is, if you're not following the money, if you're not looking at the VC model of funding, then there's only so much you're gonna be able to do to make things better.
And in some ways she, she kind of grounded us a little bit in, in just the, the underlying forces that may not be as visible, that have a lot to do with why, you know, we're not seeing the kind of tech company civic leadership that we hope to see.
JASON KELLEY
Yeah. You know, at EFF we often talk about sort of surveillance or tracking or behavioral ads as the original sin of the internet and it was helpful to hear her describe sort of, if you go back a little further, the VC model, the sort of profit model where you have to make a really large company really quickly or really profitable one might even be the actual original sin, right? Because that's how you get to behavioral ads. That's how you get to surveillance and tracking and sort of mass surveillance across the web.
Theme music in
JASON KELLEY
Well that’s it for this episode of How to Fix the Internet.
Thank you so much for listening. If you want to get in touch about the show, you can write to us at podcast@eff.org or check out the EFF website to become a member, donate, or look at some of the merch we have available! I don’t know where you are, but it’s cold here and a hoodie is just right for wearing both indoors and outdoors.
This podcast is licensed Creative Commons Attribution 4.0 International, and includes music licensed Creative Commons Attribution 3.0 Unported by their creators. You can find their names and links to their music in our episode notes, or on our website at eff.org/podcast.
Our theme music is by Nat Keefe of BeatMower with Reed Mathis
How to Fix the Internet is supported by the Alfred P. Sloan Foundation's program in public understanding of science and technology.
See you next time.
I’m Jason Kelley…
CINDY COHN
And I’m Cindy Cohn.
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