There could not be more at stake with the old adage, “as California goes, so goes the nation” and the upcoming November election when the state’s voters will decide on Proposition 22, a ballot measure that will either allow or deny companies Uber, Lyft and others to continue classifying drivers and delivery workers as independent contractors.
The state is arguing that their drivers and delivery persons are employees and should be paid overtime and have benefits such as health insurance. The corporations argue that they are technology companies and that most of their drivers want to keep their independent contractor status.
With over $112 million being spent on both sides, it’s tech versus labor, and If the initiative is defeated, New York is expected to follow suit, a city where there were so many rideshare workers that both Uber and Lyft were forced to stop accepting new drivers.
For both rideshare drivers and their passengers, it will be a brave new world and any changes won’t happen overnight.
Each rideshare company is spending over $30 million apiece, along with DoorDash and other companies pitching in $10 million each for Yes on Prop. 22 which has $110 million to spend on campaign advertising — the No on Prop. 22 campaign has spent about $1.8 million from pro-AB5 groups.
What’s in it for gig workers if Prop. 22 passes?
Critics of the current app-based system claim that many drivers must work at least 12 hours a day just to eke out a living slightly above minimum wage. Many drivers who live in more remote areas travel to cities such as San Francisco where they are forced to sleep in their cars to maximize earnings where they can make a living wage based on the higher volume of rides in large urban areas.
The proposed Prop. 22 legislation states that drivers would be guaranteed 120 percent of minimum wage based on engaged time on the app and an 84 percent health care subsidy based on averaging Affordable Care Act premiums in California for those working over 25 hours per week.
They would also be afforded $1 million in occupational accident insurance, disability payments of 66 percent of average weekly earnings, and make accidental death insurance available for spouses, children, or other dependents.
Critics say that this does not go far enough and does not offer overtime, paid time off, or sick leave accrual. They also argue that the term “engaged time” means that the driver’s guaranteed pay increase would be based on time actually spent on the app and does not account for their time when not actively engaged on the app, which could add up to hours in a day, greatly diminishing the proposed pay increase.
Will this be enough of a benefit increase to drivers who want to remain independent contractors but who still struggle in a post-pandemic world? Critics such as the National Employment Law Project (NELP) state that these promises would result in working more hours to qualify for the benefits and that they are ‘propaganda.’
A Lyft and Uber shutdown will affect low-income and minority communities
In a surprising twist, two minority organizations that typically side with employers and unions have joined forces to support the measure, the Hispanic Chamber of Commerce and the civil rights group founded by the Reverend Al Sharpton, the National Action Network. Both organizations support the freedom and flexibility that independent contractor status allows for workers.
Thousands of residents in minority communities in California rely on rideshare services for their affordability and accessibility in neighborhoods that traditional taxi drivers previously avoided.
And, many Millennials and urban dwellers simply eschew car ownership as too costly in concentrated areas and rely heavily on rideshare services and public transportation.
Do minority workers share differing views of Prop. 22?
When it comes to the minority rideshare drivers, the gap closes on the debate of employee versus independent contractor status. Minorities are well-represented in labor groups such as the Service Employees Union International (SEUI) and the group Gig Workers Rising, both pro-AB5.
The Yes on Prop. 22 website states that rideshare drivers and delivery workers want to be independent contractors by a four to one margin, but does not give a breakdown by ethnicity of opponents and proponents.
It’s unclear how many of the 25 percent from the Yes on Prop. 22 survey who want employee status are minorities, but clearly, they are not in the majority of rideshare and delivery service workers surveyed who want to remain independent contractors.
All eyes will be on California on November 3.