Prop 22: Victory For Uber, Lyft; Drivers Denied Employee Status

SAN FRANCISCO, CA — Californians have sealed the fates of drivers who work for app-based rideshare and delivery companies as the Associated Press called the race late Tuesday night. Proposition 22 passed with 58 percent voters in favor of classifying such drivers as independent contractors, rather than employees.

The tussle over the proposition was fraught with controversy and heavy debate from the beginning, stemming back to when A.B. 5 was signed into law to alter California's gig economy, advocating for labor rights, last year.

Uber and Lyft, the main players on California's rideshare chess field, poured a historic $205 million into the proposition, making it the most expensive campaign in state history. Both conglomerates even threatened to pull out of the Golden State if it didn't pass, according to multiple reports.

But since it did, the legislation will free those companies from having to treat drivers as employees or provide them with any of the accompanying benefits.

Proponents campaigning against the proposition, mostly those of labor unions, raised less than a tenth of what Uber and Lyft spent to support the measure, about $20 million, according to MarketWatch.

“We used everything we could to reach people,” Nicole Moore, a Los Angeles-based driver and worker organizer with Rideshare Drivers United, said Tuesday night, MarketWatch reported.

The new law will supersede A.B. 5, a move enacted by legislators last year to bestow full employment, health care, minimum wage protections and sick leave upon such drivers.

And so California's gig economy, and its estimated 1 million workers, was set to further thrive.

“Today, California voters agreed that instead of eliminating independent work, we should make it better,” said Uber spokesman Davis White, according to MarketWatch.

Proponents of Uber and Lyft have argued that the majority of their drivers would prefer to remain flexible and independent.

But both sides of the heavily debated proposition drew loud and clear arguments. Those in support of the prop levied arguments to defend the growing gig economy in California, which includes freelance and "piece work" of various kind. However, the free market concept has yet to prove that it is profitable, according to the Washington Post.

Those rallying behind workers and vying for labor rights argued that the gig economy model was unstable and left drivers unprotected.

In San Francisco, where Uber and Lyft are headquartered, nearly 60 percent of residents voted against the proposition, according to San Francisco Gate.

Lorena Gonzalez, the author of A.B. 5, which drew some backlash when it first applied to freelance writers and other gig workers, bashed the free market victory on Twitter Wednesday morning.

"...Uber & Lyft didn’t spend $200m talking about unions, they spent it lying about worker protections (120% min wage /healthcare/ flexibility) Exit polls said 40% who voted yes thought it gave drivers a living wage. It doesn’t," Gonzalez tweeted.

Anyone watching this campaign knows they cloaked themselves in purchased endorsements and used pro-worker talking points. $200 plus million purchases a narrative, but we will continue to fight in CA and Nationally.
— Lorena Gonzalez (@LorenaSGonzalez) November 4, 2020

Politicians and media outlets alike predicted Wednesday that the passing of Prop 22 could be something of a bellwether for the rest of the country, as the companies could further rally to pass similar laws across the states.

And although its opposition decried the passing of the legislation for leaving such drivers in the lurch in terms of benefits, the proposition's campaign released a statement Tuesday asserts that the proposition will provide some benefits "like health care stipends and insurance for on-the-job injuries."

Proponents of Proposition 22 contended that most gig drivers support 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.

“Prop 22 is the dawn of a new day for drivers. In a historic election, California drivers sent a clear message that we want to be independent, and that what’s best for us is a new approach that preserves our independence while providing new benefits,” said Jimmy Strano in a Tuesday statement on the campaign's website, who is reportedly disabled and drives rideshare in the Bay Area.

Now, the passed proposition 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.

Now that Prop 22 has 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 will go into effect Dec. 16, after election results are properly certified through the California Secretary of State's office.

Patch Editor Paige Austin contributed to this report.

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