Proposition 22, the richly funded measure backed by gig companies seeking to keep their workers as independent contractors, was passed by California voters Tuesday night.
Uber, Lyft, DoorDash, Instacart and Postmates poured more than $205 million into Prop. 22, which exempts drivers and couriers from being reclassified as employees under AB5, California’s gig-work law. It provides the workers with some earnings guarantees and some benefits, but ones that fall short of those afforded to traditional employees.
The companies said that they, as well as workers, rely on the flexibility of an independent contractor model. The firms, all of which are headquartered in San Francisco, were also keen to avoid the hundreds of millions of dollars that employment would add to their annual labor expenses.
Labor groups raised about $20 million to oppose Prop. 22, saying they were sticking up for workers’ rights. An unspoken agenda was that unions hoped to organize drivers if they became employees.
All told, Prop. 22 set a modern record for campaign expenditures for a California referendum. Voters were blitzed with TV ads, glossy mailers, text messages and more from the Yes on 22 campaign, while No on 22 reached out to the millions of union members statewide. Gig companies also used their apps to display ads to customers and drivers. Some Uber drivers filed a lawsuit saying the in-app ads were coercive, but a judge was dubious about their claims.
Uber and Lyft threatened to leave California or drastically curtail service here, especially in rural and surburban areas, if Prop. 22 failed. They said that forcing them to hire drivers as employees would result in higher fares and longer waits, and that they would hire only a fraction of the existing driver base, with preference to those who work full time.
The Yes on 22 campaign hailed its apparent victory as setting a model for independent contractors with benefits that the rest of the country should follow. “Prop. 22 represents the future of work in an increasingly technologically-driven economy,” it said.
“Today, California voters agreed that instead of eliminating independent work, we should make it better,” Uber said in a statement. “Soon, drivers in California will be guaranteed a minimum earnings standard of 120% of minimum wage and will gain access to important new benefits like health care, accident insurance, and more.” (The wage guarantee in Prop. 22 does not include idle time between rides for drivers.)
On the No side, Art Pulaski, executive secretary treasurer of the California Labor Federation said in a statement that the gig companies spent an “obscene amount of money” on a “deceitful campaign.”
“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,” he said.
The legal battle with gig companies won’t end with the vote on the ballot measure.
Uber and Lyft face a lawsuit that California and the city attorneys of San Francisco, San Diego and Los Angeles filed in May over driver classification. In October, an appeals court upheld a preliminary injunction from the San Francisco Superior Court judge in that case to force immediate reclassification. It is slated to take effect in January.
The lawsuit could well continue now that Prop. 22 passed, because the government can make a case that the companies were violating AB5 up until the measure takes effect.
California’s labor commissioner is suing Uber and Lyft for committing wage theft by “willfully misclassifying drivers as independent contractors instead of employees.” Instacart faces an AB5 misclassification suit filed by the San Diego city attorney, while DoorDash faces a similar one filed by the San Francisco district attorney.
All those cases could take a year or more to make their way through the courts. It’s possible the companies would seek settlements to clear the landscape for their operations.
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@sfchronicle.com Twitter: @csaid
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November 04, 2020 at 03:32PM
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Proposition 22, California gig-work ballot measure backed by Uber and Lyft, passes - San Francisco Chronicle
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