Uber, Lyft win approval of California gig worker measure
California voters agreed Tuesday to let gig economy drivers continue working as independent contractors rather than as employees.
Voters were supporting the measure 58% to 42% following a campaign in which Uber, Lyft, Instacart, Postmates and DoorDash spent heavily to secure its passage.
“Prop 22 represents the future of work in an increasingly technologically-driven economy,” Yes on 22 campaign said in a statement late Tuesday night. “Prop 22 will protect drivers’ preference to be independent contractors with the flexibility to work when, where, and how long they want.”
The result could lay the foundation for the future of gig workers in the state and the nation.
With the initiative’s passage, drivers will be independent contractors, while getting some of the benefits given to employees – including payments toward their health insurance if they drive a certain number of hours in a week.
Uber celebrated Proposition 22’s victory in its message to drivers.
“We’re looking forward to bringing you these new benefits — like health care contributions and occupational accident insurance — as soon as possible,” Uber CEO Dara Khosrowshahi said in his e-mail to drivers. “We’ll be back in touch in the next few weeks with more details about what to expect, and how to enroll in and make the most of these new benefits.”
The No on 22 campaign said app-based companies such as Uber and Lyft bought their own law with Proposition 22.
“The obscene amount of money these multi-billion dollar corporations spent misleading the public doesn’t absolve them of their duty to pay drivers a living wage, provide PPE to protect workers as the pandemic deepens or repay taxpayers for the nearly half a billion these companies have cheated from our state unemployment fund,” Art Pulaski, executive secretary treasurer of the California Labor Federation, said in a statement. “The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they’re hurt at work.”
Under Proposition 22, drivers will earn at least 120% of minimum wage for the time they spend picking up and driving passengers, plus 30 cents a mile. Opponents argued that drivers could earn less than minimum wage because they spend a lot of time waiting for rides, time that won’t be compensated under Proposition 22.
If Proposition 22 had failed, companies likely would have had to consider their drivers in California as employees under the new state labor law known as Assembly Bill 5, providing them with benefits such as paid sick leave and unemployment insurance.
Companies threatened to cut hundreds of thousands of jobs and pull out of some parts of California if that happened, although opponents said they didn’t see that as likely given the state is one of the largest markets for those corporations.
Proposition 22 represents a culmination of years of battle between some gig workers, supported by labor unions, and the tech companies.
So far, the tech companies had been on the losing end. A California Supreme Court ruling in 2018 changed the definition of independent contractors. In 2019, Gov. Gavin Newsom signed AB 5, which codified the court’s ruling.
Numerous courts rejected the companies’ argument that their drivers should still be considered independent contractors under AB 5. Without judicial relief, the companies turned to voters to grant them exemptions from the bill.
The companies poured $200 million into supporting Proposition 22, making it the most expense initiative in the history of California. Labor unions and small contributors raised over $19 million against the measure.
Opponents were outspent 10-to-1, but had a long list of supporters, including Sen. Bernie Sanders, I-Vermont, and Democratic presidential candidate Joe Biden.
Public surveys consistently reflected a tight race for Proposition 22. A recent UC Berkeley poll found the initiative had support from 46% of those surveyed, compared to 42% who were against the measure.
A change to Proposition 22 is unlikely absent another ballot measure. The Legislature can only amend the initiative with a 7/8th vote.
Companies such as Uber and Lyft could see the measure as a template they can use across the nation.
“I do think that we’re going to use this as an outline for a dialogue that we have on a local basis,” Khorsowshahi told the Financial Times.
Workers’ group Gig Workers Collective, which fought against the measure, said it’s ready to continue its fight.
“Gig work is real work, and gig workers deserve fair and transparent pay, along with proper labor protections,” the group said in a release. “These companies are clearly afraid, otherwise they never would have needed to spend that $200 million — and it’s workers they are afraid of. It’s only a matter of time until the law catches up with them.”
Assemblywoman Lorena Gonzalez, D-San Diego who wrote AB 5 and was a strong critic of Proposition 22, said in a tweet on eletion night that she doesn’t think the battle over how gig workers are treated in California is over.
“Tomorrow, I’ll wake up and think, what can we do to help working Californians? It’s what we do every day. Fighting corporate greed & unlimited spending is never easy, but we do it,” Gonzalez said. “Over & over & over again. And, don’t worry, I got some ideas.”
This story was originally published November 3, 2020 at 8:34 PM.
