Should app-based rideshare and delivery drivers be classified as independent contractors and receive the benefits outlined in this proposition? That's what Prop 22 proposes, but if it fails, Uber, Lyft, etc may have to make them employees.
Prop 22 would classify app-based drivers (e.g. Uber, Lyft, Postmates, DoorDash, Instacart) as independent contractors, overriding a new state law that compels these companies to make them employees. Prop 22 also stipulates that these companies provide new benefits to drivers. The benefits resemble some standard employment benefits: helping pay for health insurance, compensation in case of injury or death, a limit on the number of working hours in a 24 hour period, and a minimum earnings of 1.2x the minimum wage of driving hours only. Lastly, the legislature can make amendments with a 7/8th vote, but that's considered practically impossible.SourceLA TimesEndorsement: No on Prop. 22. It’s the wrong solution for Uber drivers and the gig economy“And the proposition would bar the Legislature from making any changes to its terms without an all-but-impossible seven-eighths majority vote.”Read more To make any changes to Prop 22 would probably require another ballot measure.
Advocates say that drivers want the flexibility that being an independent contractor affords them, and most drivers support Prop 22.SourceThe San Diego Union-TribuneCommentary: Prop. 22 would let app-based drivers like me keep our freedom and flexibility“They dismiss the more than 100,000 app-based drivers who support Proposition 22. They don’t seem to care that, according to independent polls, drivers want to preserve flexibility by a four to one margin.”Read more Supporters also say that drivers (and many other independent contractors) don't fit neatly in the old-world model of employees and contractors, and there should be a third type of worker.SourceLA TimesEndorsement: No on Prop. 22. It’s the wrong solution for Uber drivers and the gig economy“But as the late economist Alan B. Krueger and former Labor Secretary Seth D. Harris laid out in a 2015 paper for the Brookings Institution, technology has created a third type: independent workers who choose jobs made available through a variety of intermediaries, often blending personal and occupational pursuits. These workers exert more control over when and where they work than the typical employee, but they may have less control over their prices and other terms of service than the typical independent contractor.”Read more
Critics agree that the gig workers should be in a different category that's neither an employee nor a contractor,SourceLA TimesEndorsement: No on Prop. 22. It’s the wrong solution for Uber drivers and the gig economy“But the ruling affects a broad array of industries, and the Legislature has failed to come up with a response that meets the needs of the state’s 21st century workforce. Unfortunately, Proposition 22 doesn’t provide a good answer either, offering a solution that’s too narrow and rigid.”Read more and that legislation should protect workers from exploitation while allowing companies to thrive. The problem with Prop 22, they say, is that it is an inflexible solution that only applies to the companies who wrote it.SourceLA TimesEndorsement: No on Prop. 22. It’s the wrong solution for Uber drivers and the gig economy“One of the key innovations of app-based companies is their ability to match whatever workers are available to the customers seeking services, enabling individual workers to come and go on their own schedule. The challenge for the state is to preserve that innovation while guarding against the exploitation of those who rely on app platforms for their livelihoods. And it’s a balance that must be struck broadly, not just for companies that lawmakers or voters favor.”Read more The problem should be more broadly solved through legislation, not ballot initiative.
Opponents point to a survey of actively working drivers in SF that found that a majority relied on driving and deliveries as their primary source of income; a majority said it was their only income source in the previous month. Half said they work more than 40 hours/week.SourceUCSC Institute of Social TransformationOn-Demand and on-the-edge: Ride-hailing and Delivery Workers in San Francisco“The majority of people work full-time for platform companies, with 71% working more than 30 hours a week, including 50% who work more than 40 hours and 30% who work more than 50 hours a week. The majority of people depend on platform work as their primary source of income, with 53% saying it was their only source of income last month, and another 10% saying it was 75% or more of their income.”Read more Those opposed to Prop 22 say this shows many people don't see these jobs as "gigs."
☝️ The question of 2020.
In a nutshell, this all started in 2018 when a California Supreme Court ruling defined an "independent contractor" very strictly. An independent contractor must be "free from control and direction" of the hiring company, and the contractor's work must be "outside the usual course of the hiring entity’s business."SourceWikipediaCalifornia Assembly Bill 5 (2019)“classified as an independent contractor where all three of the following conditions are met: (1) the worker is free from the control and direction of the hirer in connection with the performance of the work, both under the contract for the performance of such work and in fact (2) the worker performs work that is outside the usual course of the hiring entity's business. (3) the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed for the hiring entity.”Read more
A year later, the state legislature codified this ruling into law with AB (Assembly Bill )5, which prompted many, many industries to ask for an exemption from the law. Many were granted, but guess which industry wasn't.SourceLA TimesIn Prop. 22, app-based companies ask voters to resolve what lawmakers would not“The legislative response to the worker classification ruling, Assembly Bill 5, was amended a half-dozen times in 2019 to add additional professions where services could be provided by independent contractors. But no changes were made for app-based companies.”Read more Uber and Lyft have waged a long legal battle to claim that AB5 doesn't apply to themSourceAssociated PressUber, Lyft look to kill California law on app-based drivers“Uber and Lyft have maintained that their drivers meet the criteria to be independent contractors, not employees. They also have argued the law didn’t apply to them because they are technology companies, not transportation companies, and drivers are not a core part of their business.”Read more and it also unfairly targets them.SourceLA TimesUber and Postmates call AB 5 unconstitutional in new lawsuit“The allegation of equal protection violation arises from the large number of occupations exempted from AB 5 under heavy lobbying. The “laundry list of exemptions,” is proof of its “irrationality,” argue the plaintiffs.”Read more In addition to that battle, they, along with DoorDash, Postmates and Instacart, have contributed almost $200M (,000,000) to put Prop 22 on the ballot and advertise itSourceBallotpediaProposition 22“The following were the top five donors who contributed to the support committees...”Read more, a record amount raised. Prop 22 is their alternative to AB5, and they very much want you to vote yes.
Where we're at now: On Oct 22, an appeal by the rideshare companies failed in the appeals court.SourceThe New York TimesAppeals Court Says Uber and Lyft Must Treat California Drivers as Employees“Uber and Lyft must treat their California drivers as employees, providing them with the benefits and wages they are entitled to under state labor law, a California appeals court ruled Thursday.”Read more They must comply with AB5, essentially leaving it up the voters via Prop 22.
If Prop 22 fails, some unknowns still remain:
It's possible Uber, Lyft, and others may move to a franchise model in California and license their brand to independently-operated vehicle fleets.SourceThe New York TimesUber and Lyft Consider Franchise-Like Model in California“Another option that policy teams at both of the companies floated was the franchise-like model, the people with knowledge of the plans said. Under the proposal, Uber and Lyft would invite other businesses to establish ride-hailing fleets using their platforms. That could bolster the companies’ claims that they were simply tech companies that built sophisticated dispatch services and that providing transportation was outside their core business, protecting them from A.B. 5’s requirements.”Read more A franchise model would keep drivers as independent contractors without benefits.
Alternatively, if the companies move towards converting drivers to employees, they estimate it would increase rider prices, wait times, and require some drivers to work 40 hour weeks. They also estimate they would have to decrease the number of drivers in CA from 209K to 51K (76% decrease).SourceUber BlogAnalysis on Impacts of Driver Reclassification“Shifting to an employment model would put pressure on Uber to consolidate working hours across fewer workers in order to manage costs that are fixed per employee. Under an employment model, it is likely that the new norm for Uber drivers would conform with the 40-hour work week which is the standard for full time U.S. employees. The overwhelming majority of drivers in California today spend far less than that amount of time on our app. It is an unfortunate consequence of reclassification that the majority of these workers would be displaced. Statewide, we estimate that the number of drivers active each quarter would fall from 209,000 to 51,000”Read more
At the corner. Where are u?
Omw (On my way!)
You have 3 minutes before I leave
I just got a text from Brian of the No on 22 campaign.
?
I have to respond.
You're a driver what do you think about Prop 22
I know a lot of drivers who want to stay flexible in their hours, and I know some drivers that want the benefits employment gives you
Prop 22 would give us some of those benefits + keep the flexibility
But Brian says you currently get paid below min wage
Yea, a lot of drivers I know complain about how they've been cutting our rates more and more. But Prop 22 would give us 120% of the minimum wage
But only for hours spent driving. It doesn't include waiting time and it's not like they're paying for your car and gas. And one study found drivers waiting about a third of their shift waiting for rides.
It's estimated you'd earn less than $5.64 an hour with this new "minimum wage"
If Prop 22 doesn't pass, I might be out of a job. I lost my other job in March. Uber Lyft has given me a job where I can decide my hours.
And if Prop 22 passes, I get benefits like a subsidy for health insurance and accident insurance
But are those quasi-benefits really enough for you? Wouldn't you rather get the benefits guaranteed to employees? Sure you'll get more than you have now, but you won't get any paid sick days, parental leave, payroll taxes paid for, unemployment insurance, or severance.
Not if it means working 40 hours a week. I can't do that and I hope to get another job asap and drive on the side to earn extra.
Nothing in the law prevents Uber Lyft from giving you the same flexibility, nor would you necessarily work 40 hours a week.
You're right, but it's not practical. No other company provides flexibility like this to their employees.
Prop 22 only applies to app-based rideshare and delivery companies. It wouldn't really help other independent contractors in a similar situation.
Tell them to get an exemption, like so many other industries.
Are you coming down or what?
Sorry, just canceled the ride. Lyft just sent me a discount