Election 2020: How Prop 22 would affect rideshare and other app-based drivers

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Proposition 22 would change how gig workers for companies like Uber and Lyft are classified, and it would exempt them from AB5. Photo by Amy Ta. Photo by Amy Ta.

What would Proposition 22 do?

If passed, Proposition 22 would reclassify app-based drivers with companies like Uber, Lyft, Doordash, and Instacart as independent contractors. The ballot initiative would exempt these drivers from Assembly Bill 5 (AB5), which the California legislature passed in 2019. AB5 reclassified many gig economy workers as employees, meaning they would be entitled to the pay and benefits required by law.  

According to bill author Assemblywoman Lorena Gonzalez, AB5 was a way to prevent the exploitation of gig workers. After going into effect in January 2020, gig worker-reliant companies and their advocates banded together to get Proposition 22 onto the 2020 General Election ballot.

UCLA professor Chris Tilly says Uber, Lyft and other app-based companies rely on independent contracts because they help sustain their business model.

“Their main cost is paying drivers. So it's been a competitive strategy to draw in the drivers. … There's nothing in Uber and Lyft’s business model that says they have to keep that [pay] rate high,” he says. “They can always offer them a particular price — take it or leave it. It's different from having an employee where there are laws, like the minimum wage law and the various benefits that you have to offer employees by law, where they don't have a choice, the law requires that.”

Combined, companies like Uber, Lyft, Doordash, Postmates, and Instacart have spent more than $186 million on pro-Proposition 22 campaigning, making it the most expensive California ballot initiative in history. 

Arguments in favor of Proposition 22

According to Proposition 22 advocates, the initiative would provide drivers with 120% of minimum wage for the time they’re engaged or actively driving passengers or fulfilling orders. The bill also states it would provide some health care subsidies and reimburse some expenses such as accident and disability insurance. 

Advocates say that if Proposition 22 doesn’t pass and drivers are forced to be classified as employees, thousands of jobs could be lost and customers would be met with higher prices and longer wait times. 

Some companies have threatened to shut down service completely in California if they are forced to follow AB5, leaving both drivers and riders stranded.

Arguments against Proposition 22 

Opponents of Proposition 22 say the initiative does not guarantee that drivers will receive the 120% of California’s $13 minimum wage because of the hidden costs of app-based driving, such as vehicle upkeep and waiting times between rides. They cite research from UC Berkeley, which indicates drivers would only make about $5.64 under Proposition 22. 

Opponents, such as Rideshare Drivers United and Gig Workers Rising, also argue that Proposition 22 will roll back worker rights fought for throughout history, such as the right to a 40-hour work week, paid sick leave, vacation time, and health care. They also state that California is one of the largest markets for gig worker-reliant companies, and it wouldn’t make sense for them to leave the state. 

Credits

Host:
Steve Chiotakis

Producers:
Christian Bordal, Jenna Kagel

Reporter:
Danielle Chiriguayo