A California ballot measure supported by ride-hailing and delivery companies would lower workers’ wages and limit the power of legislators to institute new labor protections, according to a new report from two labor advocacy groups.
Proposition 22, known as the “Protect App-Based Drivers and Services Act,” would not only roll back existing rights, but also require a 7/8 majority of state legislators to approve any future amendments, researchers at the National Employment Law Project and the Partnership for Working Families found.
“The ballot proposition is regressive and deeply harmful, and should be rejected by voters,” the groups said in their report.
The measure is backed by $110 million from Uber, Lyft, Postmates, Instacart and Doordash, and will appear before California voters in November. It’s intended to exempt app-based workers from the state’s Assembly Bill 5, which reclassified certain independent contractors as employees. Under AB5, state legislators ruled that workers for the gig economy companies were eligible for full employment rights such as sick leave and unemployment insurance. But those companies have avoided complying with the law since it took effect in January, arguing that it would erode the flexibility that is the hallmark of gig work and lead to job loss and price increases for consumers.
It could also pose an economic threat to the companies themselves: University of California, Berkeley researchers estimated that treating independent contractors as employees would have cost Uber and Lyft $400 million in unemployment insurance between 2014 and 2019.
After months of protracted legal battles, California’s attorney general and the city attorneys of San Francisco, San Diego, and Los Angeles have sought an injunction against Uber and Lyft, and demanded the companies cover mandated workplace benefits and protections.
“These companies have lost in the legislative process, they’ve lost in court. Now this is a last-ditch but well-funded effort to permanently take control of all terms and conditions of employment of their workers,” said Rebecca Smith, the director of the Work Structures Portfolio at the National Employment Law Project, and the co-author of Tuesday’s report. “If it’s successful, corporations in any industry would know that with enough cash and enough spin, you can buy your way to deregulation.”
Lyft sees Proposition 22 as an opportunity for the voters, not the courts, to decide the employment status of workers, said company spokesperson Julie Wood in a statement to Bloomberg News last month. Most Uber drivers want to work independently, a company spokesman said at the time.
The companies backing the initiative say it would enshrine historic protections for gig workers, but it falls short of what AB5 currently mandates, said Rey Fuentes, a Skadden fellow at the Partnership for Working Families, and the other author of the report.
Under Proposition 22, workers would get 120% of the state or local minimum wage, and an additional 30 cents per mile driven to cover expenses like cell phone bills and mileage. The weakness of the bill is not found in what it covers, the researchers say, but rather in what it omits. The wage calculations, for instance, account only for “engaged time” spent completing rides or deliveries, omitting the time spent waiting for requests. This “unengaged” period can account for more than a third of the time drivers spend on the road, studies show, but would not be compensated at the minimum wage.
The researchers estimate that the average driver working full-time would make about $287 less per week than under the current law—and fail to meet the current minimum wage in their jurisdiction—if the measure passes.
Proponents of the legislation tout its health benefit package, which provides limited coverage under California’s low-cost health insurance plan to workers driving more than 15 hours a week. Since these hours, too, are calculated based on engaged time, researchers estimate that workers would actually have to log between 24 and 39 on-the-road hours in order for the companies to cover any premiums.
“The whole strategy is to divide and confuse,” said Carlos Ramos, a ride-hail driver and an organizer with Gig Workers Rising. “It’s framed in a way that would seem like it’s helping drivers, but it’s the complete opposite.”
As states like New Jersey and cities like New York and Seattle pursue legislation like AB5, Ramos says the fight over the proposed counter-measure will have national implications. “If we lose in November, we can pretty much guarantee that we’ll see this same strategy implemented across the U.S.,” he said. “If we stop them here, it will definitely make them reevaluate their strategy.”