CA ballot measure that keeps gig workers as independent contractors passes

Uber, Lyft, Instacart and DoorDash the major backers of Californias Proposition 22 are getting their way. The proposition, which will keep gig workers classified as independent contractors, is projected to pass. The Associated Press called the race with 67% of precincts partially reporting.

Update 11/4 10:34 a.m. PT: With 99% of precincts partially reporting, 58.4% of voters (more than 6.7 million people) voted for Prop 22, while 41.6% of voters (about 4.8 million people) voted against it.

The ballot measure will implement an earnings guarantee of at least 120% of minimum wage while on the job, 30 cents per engaged miles for expenses, a healthcare stipend, occupational accident insurance for on-the-job injuries, protection against discrimination and sexual harassment, and automobile accident and liability insurance. Its worth noting that those earnings guarantees and reimbursement for expenses only reflect a drivers engaged time, and does not account for the time spent between rides or deliveries.

Proponents of Prop 22 claimed their win late Tuesday night when about 57% of the votes were accounted for. In an email to drivers tonight, Uber CEO Dara Khosrowshahi notified them of the news.

With this vote, drivers and delivery people will get what so many of you have been asking for: access to benefits and protections, while maintaining the flexibility and independence you want and deserve, Khosrowshahi wrote. The future of independent work is more secure because so many drivers like you spoke up and made your voice heardand voters across the state listened.

Uber said it will be in touch over the next few weeks with additional details regarding how to enroll in the new offerings, like occupational accident insurance and healthcare subsidies. Meanwhile, some opponents of the measure conceded.

Were disappointed in tonights outcome, especially because this campaigns success is based on lies and fear-mongering, Gig Workers Collective wrote in a blog post. Companies shouldnt be able to buy elections. But were still dedicated to our cause and ready to continue our fight.

The folks over at Gig Workers Rising also said the fight is far from over.

This battle is but a stepping stone towards our continued fight to get gig workers the rights, benefits, and dignified working conditions they deserve, Gig Workers Rising said in a statement.

Prop 22 was primarily backed by Uber, Lyft, DoorDash and Postmates . Last week, DoorDash put an additional $3.75 million into the Yes on 22 campaign, according to a late contribution filing. Then, on Monday, Uber put in an additional $1 million. That influx of cash brought Yes on 22s total contributions to around $205 million. All that funding makes Proposition 22 the most expensive ballot measure in California since 1999.

On the other side, major donors in opposition of Prop 22 included Service Employees International Union, United Food & Commercial Workers and International Brotherhood of Teamsters.

The reality is that, you know, it establishes a dangerous precedent to allow companies to write their own labor laws, Vanessa Bain, a gig worker and organizer at Gig Workers Collective, recently told TechCrunch. This policy was created to unilaterally benefit companies at the detriment of workers.

The creation of Prop 22 was a direct response to the legalization of AB 5, the gig worker bill that makes it harder for the likes of Uber, Lyft, DoorDash and other gig economy companies to classify their workers as 1099 independent contractors.

AB 5 helps to ensure gig economy workers are entitled to minimum wage, workers compensation and other benefits by requiring employers to apply the ABC test. According to the ABC test, in order for a hiring entity to legally classify a worker as an independent contractor, it must prove the worker is free from the control and direction of the hiring entity, performs work outside the scope of the entitys business and is regularly engaged in work of some independently established trade or other similar business.

Currently, Uber and Lyft are in the midst of a lawsuit regarding AB 5 brought forth in May by California Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco. They argued Uber and Lyft gain an unfair and unlawful competitive advantage by misclassifying workers as independent contractors. Then, in June, the plaintiffs filed a preliminary injunction seeking the court to force Uber and Lyft to reclassify their drivers.

In August, a judge granted the preliminary injunction. Uber and Lyft appealed the decision, but the appeals court last month affirmed the decision from the lower court. However, the decision will be stayed for 30 days after the court issues the remittitur, which the court has yet to do. Meanwhile, both Uber and Lyft previously said they were looking at their appeal options.

Throughout the case, Uber and Lyft have argued that reclassifying their drivers as employees would cause irreparable harm to the companies. In the ruling last month, the judge said neither company would suffer any grave or irreparable harm by being prohibited from violating the law and that their respective financial burdens do not rise to the level of irreparable harm.

But now that Prop 22 is projected to pass, this lawsuit has far less legal ground to stand on. Its also worth noting that Uber has previously said it may pursue similar legislation in other states

Questions

1. What non-employee (and non-independent contractor) stakeholders are or may be impacted by these Gig Employer businesses, and how might those other stakeholders choose to react to the changing legal / regulatory status of the gig employees of businesses operating in California?
2. What is the significance of Uber, Lyft, DoorDash et al. as primary financial backers (i.e., providing campaign contributions for the ballot initiative) of Prop 22?

1. What is the significance of Protect App-Based Drivers and Services Act as Prop 22s formal name?
2. Uber has previously said it may pursue similar legislation in other states. Does this quote from the article reflect a threat of broader attack than just on the California legislative model or is it a proactive business planning consideration given that most employer employee issues are governed by state laws rather than federal laws in the U.S.?

3. How do an Employers Big Three Responsibilities to its traditional Employees (i.e., its Economic, Legal and Ethical Responsibilities) change when that Employer hires Gig Workers (aka independent contractors)?