2020 California Proposition 22

Proposition 22 was a ballot initiative in California on the November 2020 state election which passed with 59% of the vote and granted app-based transportation and delivery companies an exception to Assembly Bill 5 by classifying their drivers as "independent contractors", rather than "employees",[1][2][3][4] thereby exempting employers from providing the full suite of mandated employee benefits (which include time-and-a-half for overtime, paid sick time, employer-provided health care, bargaining rights, and unemployment insurance) while instead giving drivers new protections of:

  • 120 percent of the local minimum wage for each hour a driver spends driving (with passenger or en route), but not time spent waiting
  • $0.30/mile for expenses for each mile driven with passenger or en route
  • health insurance stipend for drivers who average more than 15 hours per week driving
  • requires the companies to pay medical costs and some lost income for drivers hurt while driving or waiting
  • prohibits workplace discrimination and requires that companies develop sexual harassment policies, conduct criminal background checks, and mandate safety training for drivers.[5][6][7][8]
Proposition 22
November 3, 2020

Exempts App-Based Transportation and Delivery Companies from Providing Employee Benefits to Certain Drivers
Results
Response Votes %
Yes 9,957,858 58.63%
No 7,027,467 41.37%
Valid votes 16,985,325 95.50%
Invalid or blank votes 799,826 4.50%
Total votes 17,785,151 100.00%
Registered voters/turnout 22,047,448 80.67%

2020 California Proposition 22 results map by county.svg

BackgroundEdit

In 2019, Assembly Bill 5 was passed, and it was designed by lawmakers to require companies to classify ride-hail drivers and other gig-economy workers as "employees".[7][9] It requires companies to classify all workers as employees unless companies can prove that the workers: are not directed or controlled by the company during their work time, and their work is not the company's "core" business, and the worker has their own business doing that type of work.[7]: 1 [9] Lyft and Uber refused to comply with this law, and stated a desire to keep drivers classified as independent contractors.[10][11][8][12]

In August 2020, the California court ordered Uber and Lyft to comply with the law within a 10-day deadline.[13][14]: 1 The companies said they would shut down their operation in California if drivers had to become employees.[2][15] On August 20, the deadline day, the companies asked for an extension. The court granted an extension until November 4, 2020, on the condition that Uber and Lyft CEOs provide a sworn testimony by October 4 confirming their plan to comply with AB 5.[15][2][16] The companies indicated they would no longer shut down.[17] The ride-hail companies, joined by DoorDash and Instacart,[2] supported Proposition 22 for the November 3, 2020, ballot election, which was held one day prior to the extended AB 5 deadline on November 4.[16]

The California Legislative Analyst's Office stated in an analysis of the Proposition: "Most drivers work part time and many drivers only work for a short time or only drive occasionally." and "Most drivers probably make between $11 and $16 per hour, after accounting for waiting time and driving expenses."[5]

A study released by Uber found that if rideshare companies were required to comply with AB5, it would increase fares to rideshare consumers by 25-100%, depending on the market.[18]: 1 [19]: 1

Uber said that 90% of their 1.2 million drivers nationwide work less than 40 hours per week, with 80% working less than 20 hours per week, and that if they were required to classify drivers as employees, they would terminate 80% of their drivers because their nationwide business can only support 250,000 full-time jobs.[6][20][14]: 1

In an opinion piece in The New York Times , Uber's CEO Dara Khosrowshahi advocated for the legal creation of a third employment classification between the current mutually exclusive classes of "employee" and "independent contractor", so that gig workers can have the flexibility and freedom to fit work into their schedules, while also allowing companies to provide some benefits for them without being forced into the full requirements associated with "employee" classification, which does not allow schedules chosen by the employee, or under 40 hour schedules like the "independent contractor" classification does.[21][2][22] He also calls for benefits funds, which pay workers extra cash for each hour worked, that they can use for the benefits they want, (like health insurance or paid time off), while allowing them to work for multiple different companies, all of which would give them cash for this benefit fund based on the hours worked for each company.[21][2][7]

ReceptionEdit

SupportEdit

Lyft, Uber, DoorDash, Instacart, and Postmates contributed over $205 million into campaigns supporting Prop 22, making it the most expensive ballot measure in California's history.[11][23][3] This included major funding for the Yes on Prop 22 campaign,[24] and promoting the proposed legislation directly to customers when using their app.[25][15]

Edit

Some of the companies also forced their workers to support and promote the legislation: Uber sent its drivers in-app messages forcing them to click on either "Yes on Prop 22" or "OK", Instacart ordered its workers to place pro-Prop 22 stickers in customers' shopping bags, and DoorDash forced delivery drivers to use bags saying "Yes on 22".[26][27]

Title litigationEdit

The ballot title, written by Attorney General Xavier Becerra, is "Exempts App-Based Transportation and Delivery Companies from Providing Employee Benefits to Certain Drivers. Initiative Statute". The Yes on Prop 22 campaign challenged this description as non-neutral in court, but their arguments were rejected by a Sacramento Superior Court judge.[28]

OppositionEdit

The No on Prop 22 campaign was funded by the California Labor Federation,[29][30][31] with support from UC Berkeley Labor Center.[32] The campaign received around $19 million in support, mostly from labor groups.[33] Driver groups Rideshare Drivers United,[34] Gig Workers Rising, We Drive Progress, and Mobile Workers United, spoke out against Prop 22.[18][19] Editorial boards from the New York Times and Los Angeles Times also called on voters to reject Prop 22.[18]

The proposition would add protections specific to app-based workers, different from other independent contractors, but these protections would only apply during the time the worker is "engaged" in fulfilling a specific request and not while the worker is logged in to the app and available to fulfill a request.[35]

PollsEdit

Poll source Date(s)
administered
Sample
size[a]
Margin
of error
For Proposition 22 Against Proposition 22 Undecided
Redfield & Wilton Strategies October 27–30, 2020 5,000 (RV) ± 1.39% 62% 28% 9%
UC Berkeley Institute of Governmental Studies October 16–21, 2020 5,352 (LV) ± 2% 46% 42% 12%
Ipsos/Spectrum News October 7–15, 2020 1,400 (A) ± 3% 62% 23% 15%
SurveyUSA September 26–28, 2020 588 (LV) ± 5.4% 45% 31% 25%
Redfield & Wilton Strategies September 19–21, 2020 1,915 (LV) ± 2.19% 53% 27% 20%
UC Berkeley/Los Angeles Times September 9–15, 2020 5,900 (LV) ± 2% 39% 36% 25%
Redfield & Wilton Strategies August 9, 2020 2,000 (RV) ± 2.19% 41% 26% 34%

Notes:

  1. ^ Key:
    A – all adults
    RV – registered voters
    LV – likely voters
    V – unclear

ResultEdit

Proposition 22
Choice Votes %
  Yes 9,958,425 58.63
No 7,027,820 41.37
Valid votes 16,985,325 95.50
Total votes 17,785,151 100%
Registered voters and turnout 22,047,448 80.67
Source: [36]

Ability to amendEdit

All laws created in California by ballot measure are protected from being changed by the state legislature; they can only be changed by another ballot measure. Many ballot initiatives waive this protection, and explicitly state a percentage majority by which they allow the legislature to change the law; commonly, a 2/3 majority is specified. Prop 22 instead designated a 7/8 majority as being required to change it.[14]

LitigationEdit

A lawsuit was filed against the state in January 2021 by the Service Employees International Union over the successful passage of Proposition 22. The lawsuit states that Proposition 22 violates the Constitution of California, as it interferes with workers' access to the state's workers' compensation program and that it "limits the power of elected officials to govern".[37]

On August 20, 2021, Alameda County Superior Court Judge Frank Roesch ruled Proposition 22 unconstitutional because it was not limited to a single subject and because it included a seven-eighths requirement for the legislature to be able to change the initiative which infringed on the legislature's power to set workplace standards. He thereby ruled the entire ballot measure unenforceable. However, the initiative will stay in force while interest groups representing mobile application-based service platforms appeal the ruling.[38][39]

ReferencesEdit

  1. ^ "Proposition 22 | Official Voter Information Guide | California Secretary of State". voterguide.sos.ca.gov. Archived from the original on 2020-10-30.
  2. ^ a b c d e f Hepler, Lauren (2020-08-21). "Uber, Lyft and why California's war over gig work is just beginning". CalMatters. Archived from the original on 2020-08-23. At the same time, Uber CEO Dara Khosrowshahi is pleading his case in Washington, calling in a New York Times op-ed this week for a "third way" for gig workers, between full-time employment benefits and contract work with "almost no safety net." ... This month, Khosrowshahi's op-ed called for ongoing "benefits funds which give workers cash that they can use for the benefits they want, like health insurance or paid time off," rather than employer-sponsored health care or state-mandated paid leave.
  3. ^ a b Kerr, Dara (5 November 2020). "Proposition 22, backed by Uber and Lyft, passes. Drivers say they'll keep fighting". CNET. Retrieved 5 November 2020.
  4. ^ Siddiqui, Faiz; Tiku, Nitasha (2020-11-17). "Uber and Lyft used sneaky tactics to avoid making drivers employees in California, voters say. Now, they're going national". The Washington Post.
  5. ^ a b "EXEMPTS APP-BASED TRANSPORTATION AND DELIVERY COMPANIESFROM PROVIDING EMPLOYEE BENEFITS TO CERTAIN DRIVERS.INITIATIVE STATUTE - ANALYSIS OF MEASURE" (PDF). California Legislative Analyst's Office. 2020-07-15. Archived (PDF) from the original on 2020-08-29. Retrieved 2021-01-07.
  6. ^ a b Siddiqui, Faiz (2020-10-26). "Uber and gig companies spend nearly $200 million to knock down an employment law they don't like — and it might work". The Washington Post. Uber says 91 percent of its drivers across the country work fewer than 40 hours per week. Uber CEO Dara Khosrowshahi said in a blog post this week that if the company were forced to make all drivers across the country employees, for example, it could only support 260,000 full-time roles. That compares to 1.2 million active drivers the company was hosting on its app before the coronavirus pandemic.
  7. ^ a b c d Marshall, Arian (31 October 2019). "Uber and Lyft Fight a Law They Say Doesn't Apply to Them - The ride-hail companies are backing a ballot measure to overturn a California law intended to transform gig-economy workers from contractors to employees". Wired. Archived from the original on 2019-11-06. Retrieved 2020-10-14. The companies and their supporters are pitching the initiative as a "compromise" that would create a third employment classification requiring Uber, Lyft, and their ilk to give drivers more perks than the average independent contractor but wouldn't entitle workers to the full benefits of an employee. If it's approved by state voters, the initiative would require the companies to pay their still-independent contractors a minimum wage and vehicle maintenance costs, cover their auto insurance costs, and grant them a health care stipend. It would create a sexual harassment policy for drivers and riders and would require the companies to investigate complaints. It would also create mandatory safety training for any app-based drivers.
  8. ^ a b Dickey, Megan Rose (2020-08-14). "Human Capital: A timeline of Uber and Lyft's fight against AB 5 and Pinterest's fall from grace". TechCrunch. Archived from the original on 2020-08-17. November 2020: Californians will vote on Prop 22, a ballot measure majorly funded by Uber, Lyft and DoorDash. Prop 22 aims to keep gig workers classified as independent contractors. The measure, if passed, would make drivers and delivery workers for said companies exempt from a new state law that classifies them as W-2 employees. The ballot measure looks to implement an earnings guarantee of at least 120% of minimum wage while on the job, 30 cents per mile for expenses, a healthcare stipend, occupational accident insurance for on-the-job injuries, protection against discrimination and sexual harassment and automobile accident and liability insurance.
  9. ^ a b "Newsom signs bill rewriting California employment law, limiting use of independent contractors". Los Angeles Times. 2019-09-18. Retrieved 2020-10-14. Under AB 5, which will take effect Jan. 1, Californians will be considered to be employees of a business unless an employer can show the work they perform meets a detailed set of criteria established by a California Supreme Court ruling last year. Under those criteria, a worker is an employee if his or her job forms part of a company's core business, if the bosses direct the way the work is done or if the worker has not established an independent trade or business.
  10. ^ Hiltzik, Michael (8 September 2020). "Uber and Lyft just made their campaign to keep exploiting workers". Los Angeles Times. Retrieved 2020-10-14.
  11. ^ a b Byrne, Ryan (9 September 2020). "With funding from Uber, Lyft, and Doordash, campaign behind California Proposition 22 tops $180 million". ballotpedia.org. Ballotpedia. Retrieved 10 September 2020.
  12. ^ Spangler, Todd (2020-08-21). "Why Uber and Lyft Were on the Brink of Shutting Down in California — and What Happens Next". Variety. Retrieved 2020-10-14.
  13. ^ O'Brien, Sara Ashley. "Court orders Uber, Lyft to reclassify drivers as employees in California". CNN. Retrieved 2020-10-14.
  14. ^ a b c Hussain, Suhauna (2020-10-19). "What Prop. 22's defeat would mean for Uber and Lyft — and drivers". Los Angeles Times. Archived from the original on 2020-10-22. Proposition 22's text carries language that aims to block further legislative action targeted at gig companies. If passed, amending it would require a seven-eighths supermajority of the Legislature — a daunting hurdle. In California, a law created by ballot measure can be changed only by another ballot measure, unless the original measure specifies otherwise. Because it's a hassle to push through ballot measures, initiatives will frequently waive this protection and provide opportunity for the measure to be amended by the Legislature. A two-thirds majority vote is a common benchmark initiatives use. A seven-eighths majority requirement is unheard of.
  15. ^ a b c O'Brien, Sara Ashley. "Uber and Lyft get reprieve from court, won't shut down in California for now". CNN. Retrieved 2020-10-14. [...] , the companies have threatened to suspend their services, and sometimes followed through on it, riling up customers and drivers, and putting pressure on lawmakers.
  16. ^ a b Feiner, Lauren (2020-08-20). "Appeals court grants Uber and Lyft a temporary reprieve following threats to shut down in California". CNBC. Retrieved 2020-10-14.
  17. ^ Inc, Lyft. "Rideshare operations will not be suspended in California". Lyft. Archived from the original on 2020-08-21. Retrieved 2020-10-14.
  18. ^ a b c Paul, Kari (2020-10-15). "Prop 22 explained: how California voters could upend the gig economy". The Guardian. ISSN 0261-3077. Retrieved 2020-10-29.
  19. ^ a b Garcia, Karen (15 October 2020). "Rideshare companies dump $180 million in Proposition 22". New Times San Luis Obispo. Retrieved 2020-10-29.
  20. ^ Bellon, Tina (2020-08-21). "Factbox: What's at stake in California's November gig worker ballot measure". Reuters. The companies say roughly 80% of all drivers work less than 20 hours per week. Being forced to reclassify workers as employees would threaten the companies' business models and force them to reduce driver numbers by up to 90%.
  21. ^ a b Khosrowshahi, Dara (2020-08-10). "I Am the C.E.O. of Uber. Gig Workers Deserve Better. - Gig workers want both flexibility and benefits — we support laws that could make that possible". The New York Times. Archived from the original on 2020-08-21.
  22. ^ Morath, Eric (2021-05-05). "Biden Blocks Trump-Era Gig-Worker Rule". Wall Street Journal. Uber spokesman Noah Edwardsen on Wednesday said the company views the current federal employment system as outdated. Workers must choose to be an employee with more benefits and less flexibility, or an independent contractor with more flexibility and limited protections, the spokesman said. "Uber believes that we can combine the best of both worlds by offering independent work opportunities to the hundreds of thousands of workers that use the Uber platform while also providing these workers with meaningful benefits," he said.
  23. ^ O'Brien, Sara Ashley. "The $185 million campaign to keep Uber and Lyft drivers as contractors in California". CNN. Retrieved 2020-10-14.
  24. ^ "Yes on Prop 22". Save App-Based Jobs & Services. Retrieved 2020-10-14. Paid for by Yes on 22 [...] Committee major funding from Uber Technologies, Lyft, and DoorDash.
  25. ^ "Uber, Lyft push Prop. 22 message where you can't escape it: your phone". Los Angeles Times. 2020-10-08. Retrieved 2020-10-14.
  26. ^ "Uber drivers sue, say company 'coerced' them to support Prop 22". CNet. 2020-10-23. Retrieved 2020-10-24.
  27. ^ "Gig Companies Are Making Their Workers Promote Prop. 22". KQED. 2020-10-20. Retrieved 2020-10-24.
  28. ^ Said, Carolyn (4 August 2020). "Judge rejects Prop. 22 backers' attempt to change gig-work ballot language". San Francisco Chronicle. Retrieved 20 August 2020.
  29. ^ "California Labor Federation Launches Massive Worker-Led Campaign to Defeat Prop 22, Pass Prop 15 and Expand Majorities in Congress and Legislature – California Labor Federation". Retrieved 2020-10-29.
  30. ^ "No on Prop 22: BY app companies, FOR app companies". nooncaprop22.com. Retrieved 2020-10-29.
  31. ^ "2020 General Election Endorsements – California Labor Federation". Retrieved 2020-10-29.
  32. ^ "The Uber/Lyft Ballot Initiative Guarantees only $5.64 an Hour". UC Berkeley Labor Center. Retrieved 2020-10-29.
  33. ^ Kerr, Dara. "Uber and Lyft's win to keep drivers as contractors in California has national implications". CNET. Retrieved 2020-11-09.
  34. ^ "No on Uber's Prop 22: Stop Exempting Uber & Lyft from Basic Labor Laws! | Rideshare Drivers United". drivers-united.org. Retrieved 2020-10-29.
  35. ^ Holder, Sarah (7 July 2020). "California's Gig Economy Ballot Measure Fails Workers, Labor Groups Say". bloomberg.com. Bloomberg. Retrieved 18 October 2020.
  36. ^ "2020 California Election Results" (PDF). Election Results. [Page 71] 22Exempts App-Based Transportation and Delivery Companies From Providing Employee Benefits to Certain Drivers. Initiative Statute. 9,958,425 58.6 % 7,027,820 41.4%
  37. ^ Said, Carolyn (January 12, 2021). "Lawsuit seeks to overturn Prop. 22, measure that keeps gig workers from becoming employees". San Francisco Chronicle. Retrieved January 12, 2021.
  38. ^ Prop. 22, the gig worker exemption for Uber and Lyft, is ruled unconstitutional
  39. ^ Park, Jeong (August 20, 2021). "Court rules California gig worker initiative is unconstitutional, a setback to Uber and Lyft". The Sacramento Bee. Retrieved August 20, 2021.

External linksEdit