REAL-TIME RESULTS: Prop 22 In California

LOS ANGELES, CA — Proposition 22, the most expensive ballot measure campaign in state history, passed Tuesday night, effectively exempting app-based transportation and delivery companies from having to treat their drivers as employees.

The Uber and Lyft-funded proposition allows the companies to classify app- based transportation and delivery drivers as independent contractors. The initiative written in response to last year's passage of AB 5 was leading 57.9%-42.1% with more than 10 million votes counted, according to figures released by the Secretary of State's Office. The Associated Press officially called the measure's victory shortly before midnight Tuesday.

What supporters dubbed the "Protect App-Based Drivers and Services Act" received major financial backing from the ride-hailing company Lyft, the parent company of the ride-hailing company Uber and the on-demand prepared food delivery service DoorDash.

The campaign on behalf of Proposition 22 received more than $204 million in contributions, according to figures released Monday by the California Secretary of State's Office.

The previous record was more than $154 million in support of Propositions 94, 95, 96 and 97, four similar gaming compact measures approved by voters in the 2008 primary.

The campaign against Proposition 22 received more than $20 million in contributions.

If those app-based drivers and delivery companies had failed to convince voters, their drivers would have become employees instead of contractors. The drivers would have been guaranteed a minimum wage and receive benefits, severance packages and unemployment insurance just like most full-time employees.

Proponents of Proposition 22 contended that most gig drivers prefer the measure because it affords hundreds of thousands of drivers across the state flexibility and control over their own schedule while guaranteeing a minimum wage (for the time spent on fares) and access to an insurance pool for certain drivers. They also argued that if the proposition failed, companies such as Uber, Lyft, Postmates and Instacart would have had to scale back services in suburban and rural areas, let go of thousands of workers and raise prices. Especially during the pandemic, Californians depend on these affordable services now more than ever, they argue.

Opponents of Proposition 22 contended it would codify an employment system in which a handful of companies can deny workers basic protections such as a guaranteed minimum wage, health insurance, sick time, severance pay and unemployment insurance.

Now that Prop 22 passed, it can't be amended without approval of seven-eighths of the Legislature, an onerous burden that ensures Californians have little chance of turning back if the measure turns out to be a bad deal, opponents said.

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With Prop 22 passed, these app-based drivers will receive training, and the ride-sharing and delivery companies will:

• Conduct driver background checks and develop sexual harassment policies.
• Have zero tolerance for driving under the influence.
• Guarantee an earnings floor based of 120 percent of the minimum wage for the driver’s engaged time and reimburse for mileage at 30 cents per mile.
• Limit drivers to 12 hours of work per 24 hours if the drivers don’t take six uninterrupted hours off between shifts.
• Provide health subsidies to drivers based on the hours they work.
• Provide access to accident insurance covering the drivers’ engaged hours.
• Provide access to accidental death insurance for drivers’ families.
• Provide disability payments for injured drivers.

Prop 22 gives app-based drivers what they want, said Jeff Vetter, a spokesman for the Yes on 22 campaign.

“More than 70 percent of drivers say they want to remain indie contractors so they can choose when and how long they want to work," Vetter said.

Most of the drivers are part time, Vetter said. They may be retirees or students, or they may have other jobs. The contract work allows them to earn extra income according to their own schedule, Vetter said.

Check Out The CalMatters 2020 Election Guide

Addressing criticism that the measure doesn’t really provide a guaranteed minimum wage because drivers aren’t paid for wait time, Vetter said it’s not realistic to pay for drivers’ wait time

“If you compensate for all the time that people spend on an app,” Vetter said, “people would log on to an app and not accept any rides."

Furthermore, as contract workers, drivers can work for multiple companies at once. They would lose that flexibility if they were compensated for their wait time, Vetter said.

He also warned that customers would suffer if Prop 22 had failed. The companies would likely have had to scale back in suburbs and rural areas, he said

“We would see longer wait times — likely doubling, higher prices — likely doubling,” Vetter added

However, critics contend the businesses were using scare tactics and a massive campaign war chest to get out of having to provide a living wage, benefits and decent working conditions to their workers.

“This is an extremely dangerous precedent,” Ken Jacobs, chair of the Labor Center at UC Berkeley, told CalMatters. Jacobs conducted a study that estimated that after wait time and expenses, drivers could make as little as $5.64 per hour with Prop. 22. “They just acted like the law doesn’t apply to them and assumed they could bring in enough money, gain enough political power, to bend the law to their will."

The No on 22 campaign claimed these companies are trying to get out of paying their fair share for the safety net, leaving their workers in the lurch. They warned that Prop 22 signifies a dangerous erosion of labor protection that could seep into other industries.

“If these companies succeed in buying this election, their low-pay, no-protection business model will expand in virtually every industry, leading to unprecedented job loss and a race to the bottom,” warns the No on 22 campaign.

City News Service contributed to this report.