If anyone thought a run-in with federal regulators would humble Elon Musk, they were sorely disappointed. He claimed Tesla would field 1 million robot taxis in 2020. He rolled out the Cybertruck, looking like a battle wagon escaped from a video game. And he activated Smart Summon, a fetch-my-car feature that Consumer Reports derided as a “glitchy” experiment. Musk battled in courtrooms with aggrieved shareholders and won a verdict in his Twitter fight with a cave diver. But perhaps the most stunning development was Tesla’s third-quarter profit, which sent its stock soaring. If Musk can replicate that, investors won’t care if the robotaxis show up late.
California’s housing affordability crisis boiled over into the Legislature. Tenants, paying rents more than a third higher than the national median, pushed through a rent control law that, starting Jan. 1, caps most yearly rent increases at 5% plus inflation. Senate Bill 50 would have dramatically increased home building by changing zoning in single-family neighborhoods, but it was squelched by homeowners. With building permits plunging — down 9% statewide through October — expect the drive for high-density housing to pick up again in the new year.
For much of 2019, Wall Street bobbed up and down on hopes that President Trump and Chinese leader Xi Jinping would tear down the tariff walls they had erected, if not solve their larger trade dispute. Hopes for a face-saving “phase one” deal buoyed stock prices. But as talks dragged on, everyone from California wineries to Nebraska soybean farmers was left twisting in the wind. Trump’s $28-billion farm bailout — twice the size of the $12-billion auto bailouts — made American farmers virtual wards of the state. A preliminary deal in early December to roll back some tariffs, and agreement on a NAFTA replacement, gave businesses hope for a calmer 2020.
Assembly Bill 5 hit California workplaces like an earthquake — and the aftershocks will reverberate through the coming year. Starting Jan. 1, the law sharply curbs the use of independent contractors in workplaces. Its backers claim employers abuse those relationships to deny workers benefits and legal protections. But Uber and Lyft will press ahead with a ballot initiative that would exempt ride-hailing and other on-demand firms while offering some wage and benefit improvements for drivers. The California Trucking Assn. filed a lawsuit to avoid reclassifying independent owner-operators as employees. With billions of dollars at stake, expect all manner of other firms to seek their own carve-out exemptions.
It was supposed to be a bonanza year for tech initial public offerings, with some of Silicon Valley’s most hyped companies — Uber, Lyft, Slack, WeWork — lining up to ring the opening bell. Profitable companies saw a soft landing on Wall Street, but the markets showed a new skepticism toward firms that burn mountains of cash to win customers and ignore making money. First, the ride-hail companies’ stock prices hit the skids in the spring. Slack went out in June and since then has tumbled. Then came WeWork, whose public filings revealed such vast seas of red ink and depths of shoddy governance that the markets balked, forcing the company to cancel its debut (and fire its CEO).
It wasn’t all that long ago Mark Zuckerberg was talking about how privacy was on the way out as a social norm. But Facebook’s Cambridge Analytica scandal in spring 2018 helped wake up Americans to all the ways their data were being used without their knowledge or consent, and 2019 brought a seemingly nonstop parade of revelations. Tech consumers learned that Amazon was letting thousands of employees listen to conversations recorded by devices equipped with its Alexa voice assistant to improve its accuracy. They also read about how Amazon pays police across the country to promote ubiquitous video surveillance via Ring doorbells. Communities in California and elsewhere are conducting their own surveillance via automated license plate readers. California lawmakers have started regulating — or banning — some of these technologies, but the companies behind them are still betting on the fact that consumers will choose convenience over privacy, most of the time.
The phenomenon that has Silicon Valley giants reaching for the panic button first emerged near the end of 2018, when 20,000 Google employees filed out of their offices and into the streets to protest the company’s decision to pay off a former executive who’d been accused of sexual misconduct. This year, tech workers at companies including Riot Games, Amazon, Microsoft and Blizzard Entertainment have walked out to challenge their employers’ actions on climate change, cooperation with controversial government policies and more. In many cases, the companies have responded by brushing off their workers’ public shows of disapproval. Some of the workers involved say their employers retaliated against them for their activism. At a few companies there’s talk of unionizing. Under the union banner or not, tech workers at America’s most powerful companies are finding they have power of their own to wield.
You really couldn’t blame investors if they thought stocks would be a downer this year after a disappointing 2018, when the market fell for the first time since the Great Recession. Yet the economic expansion proved remarkably durable, setting a record this summer despite weakness in China and Europe. That helped lift stocks to surprisingly strong gains — 28.5% for the broad-based S&P 500 through Dec. 20. President Trump turned down some of the volume of his trade war, while the Fed did an about-face and cut interest rates three times. Employers liked what they saw and responded with strong hiring that helped boost consumer confidence. With a trade pact reached with Mexico and Canada, and the U.S. close to one with China, many economists say the party could continue next year.
What does a modern entertainment empire look like? This year, Bob Iger showed everyone. Burbank-based Walt Disney Co. completed its $71.3-billion acquisition of 21st Century Fox, released pretty much the biggest movie ever (“Avengers: Endgame”) and opened Star Wars: Galaxy’s Edge at its U.S. theme parks. Perhaps most important, the Mouse House unveiled streaming service Disney+, which Iger has described as its top priority. It got 10 million sign-ups in its first 24 hours. While it may not be a Netflix-killer, it did give the world Baby Yoda. But for movie lovers, there’s a dark side to this consolidation of power: Disney put a halt on screenings of Fox classics in theaters. Since the company controls more than 30% of the domestic box office, it has an unprecedented level of leverage over theater chains.
At the top end of L.A.’s real estate market, it was the year of big asks and big sales. Four L.A.-area homes traded for at least $100 million, including the “Beverly Hillbillies” mansion, which sold in December for about $150 million, a new state record. Gary Winnick’s Bel-Air estate, which hit the market in October for $225 million, is the biggest contender to best that new high-water mark. And don’t count out Nile Niami’s upcoming project, “The One,” which is rumored to carry a price of $500 million.