Instacart, Lyft back in political spotlight

Nearly two years after California voters approved a ballot measure to exempt gig-economy giants including Uber, Lyft, Instacart and DoorDash from a controversial state labor law, the political ripple effects of Proposition 22 are still reverberating across the Golden State — and could rear up in this year’s election.

First up: Instacart. Political observers this week noticed that Instacart, which as of last month was valued at $24 billion, had reached a tentative agreement with Gov. Gavin Newsom’s Office of Business and Economic Development for a $21 million California Competes Tax Credit, which is available to businesses that want to move to or stay and grow in the Golden State.

Under the tentative agreement — which could be approved at the tax credit committee’s next public meeting on April 21 — Instacart is required to “hire full-time employees and invest in office space, tenant improvements, computer equipment and furniture and fixtures as part of its expansion in San Francisco.”

Without the tax credit, Instacart certified in its application, the “project may occur in another state.”

Willie Rudman, assistant deputy director of communications for the governor’s office of business and economic development, told me in a statement: “Award of the credit will incentivize Instacart to create 1,155 new, full-time jobs in California with average wages of $130,000 and not less than $55,000. … Instacart would also make at least $21 million of capital investments for additional office space in San Francisco to accommodate the growth. For further context, Instacart currently operates two U.S.-based headquarters in both San Francisco and Atlanta, Georgia. It has existing engineering, corporate and business support teams based out of its secondary headquarters in Atlanta that can house the company’s planned expansion.”

If Instacart doesn’t “fulfill all the terms of its agreement,” Rudman said, “the state will recapture the unearned credits.”