Proposition 22 was a ballot
initiative
In political science, an initiative (also known as a popular initiative or citizens' initiative) is a means by which a petition signed by a certain number of registered voters can force a government to choose either to enact a law or hold a pu ...
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
Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any other ...
", rather than "employees",
thereby exempting employers from providing the full suite of mandated
employee benefits
Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, or perks) include various types of non-wage compensation provided to employees in addition to their normal wages or salaries. Inst ...
(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 for 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
*requiring the companies to pay medical costs and some lost income for drivers hurt while driving or waiting
*prohibiting workplace discrimination and requiring that companies develop sexual harassment policies, conduct criminal background checks, and mandate safety training for drivers.
Background
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". 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.
Lyft and Uber refused to comply with this law, and stated a desire to keep drivers classified as independent contractors.
In August 2020, the
California court ordered Uber and Lyft to comply with the law within a 10-day deadline. The companies said they would shut down their operation in California if drivers had to become employees.
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.
The companies indicated they would no longer shut down. The
ride-hail companies, joined by DoorDash and Instacart, 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.
In an opinion piece in ''
The New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' , Uber's CEO
Dara Khosrowshahi
Dara Khosrowshahi ( fa, دارا خسروشاهی, ; born May 28, 1969) is an Iranian-American businessman and the chief executive officer of Uber. Khosrowshahi was previously CEO of Expedia Group, a company that owns several travel fare aggreg ...
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.
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.
Projected Effects
Driver earnings
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."
Separate from this, a highly contentious literature exists on the topic, with estimates for earnings after Prop-22 ranging as low as $5.64/hour to as high as $25.61/hour, on accounting for idle waiting time, wear-and-tear, and fuel in both cases.
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.
Driver flexibility
Uber claims that Prop-22 is "a better alternative than employment with a full-time, fixed schedule". Critics have argued that Prop-22 would still allow for loopholes allowing gig companies to control drivers' schedules, like penalizing or deactivating workers for cancelling jobs, requiring workers to accept a specific percentage of jobs so that they can continue working.
Driver benefits
As Uber indicates on their website, the driver must be the primary policyholder order to qualify for the healthcare stipend. It specified that Medicare and Medicaid plans and those paid by employers are cannot avail of this benefit. Some have argued that since only "active time" is counted toward the 15 hours / week minimum, with time on different platforms being counted separately, drivers are less likely to be eligible for these benefits. According to polling conducted by Tulchin Research, 86% of surveyed drivers are ineligible for Prop 22 Healthcare Stipend and those eligible are largely unaware of how to do sign up, receiving little information from app-based companies.
Fares
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.
Reception
Support
Lyft,
Uber
Uber Technologies, Inc. (Uber), based in San Francisco, provides mobility as a service, ride-hailing (allowing users to book a car and driver to transport them in a way similar to a taxi), food delivery (Uber Eats and Postmates), package ...
,
DoorDash
DoorDash, Inc. is an American company that operates an online food ordering and food delivery platform. The company is based in San Francisco, California. It went public in December 2020 on NYSE and trades under the symbol DASH.
With a 56% mar ...
,
Instacart, and
Postmates contributed over $205 million into campaigns supporting Prop 22, making it the most expensive ballot measure in California's history.
This included major funding for the ''Yes on Prop 22'' campaign, and promoting the proposed legislation directly to customers when using their app.
Sponsored support
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".
Title litigation
The ballot title, written by
Attorney General
In most common law jurisdictions, the attorney general or attorney-general (sometimes abbreviated AG or Atty.-Gen) is the main legal advisor to the government. The plural is attorneys general.
In some jurisdictions, attorneys general also have exec ...
Xavier Becerra
Xavier Becerra ( ; ; born January 26, 1958) is an American lawyer and politician serving as the 25th United States secretary of health and human services since March 2021. Becerra previously served as the attorney general of California from Jan ...
, 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
The Superior Court of California, County of Sacramento, alternatively called the Sacramento County Superior Court, is the Superior Courts of California, California Superior Court located in Sacramento, California, Sacramento with jurisdiction ov ...
judge.
Opposition
The ''No on Prop 22'' campaign was funded by the California Labor Federation, with support from UC Berkeley Labor Center. The campaign received around $19 million in support, mostly from labor groups. Driver groups
Rideshare Drivers United
Rideshare Drivers United is an organization of platform drivers that advocates for the interests of rideshare drivers in California.
The group has its origins in the 2017 strikes by rideshare drivers at Los Angeles' LAX airport.
It was also acti ...
, Gig Workers Rising, We Drive Progress, and Mobile Workers United, spoke out against Prop 22.
Editorial boards from the
''New York Times'' and ''
Los Angeles Times
The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the Un ...
'' also called on voters to reject Prop 22.
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.
Polls
Notes:
Result
Ability to amend
All laws created in California by ballot measure are protected from being changed by the
state legislature
A state legislature is a legislative branch or body of a political subdivision in a federal system.
Two federations literally use the term "state legislature":
* The legislative branches of each of the fifty state governments of the United Sta ...
; 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.
Litigation
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
Workers' compensation or workers' comp is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her emp ...
program and that it "limits the power of elected officials to govern".
On August 20, 2021,
Alameda County Superior Court
The Alameda County Superior Court, officially the Superior Court of California, County of Alameda, is the California superior court with jurisdiction over Alameda County as established by Article VI of the Constitution of California. It functions ...
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.
Prop. 22, the gig worker exemption for Uber and Lyft, is ruled unconstitutional
/ref>
References
{{reflist
External links
Official Voter Guide
'Yes on Prop 22' campaign website
'No on Prop 22' campaign website
2020 California ballot propositions
Labor law in California
Uber
Lyft