Proposition 22: Will We Pay the High Price of Gig Company ‘Freedom?’
I’m hoping to give readers a glimpse of what to expect with the dozen proposals on the November statewide ballot. Later on in the season I’ll post more materials on the higher profile measures under consideration.
As has been true with elections since 2012, I’ll endeavor to research and post about as many propositions and local elections as I can. I have no schedule, other than to say it will be done when it’s done.
One thing we can know for sure, tons of money will be spent to support or oppose the various propositions. Where that money comes from is, to me, more important than what the messages being pushed are. I’ll get around to more specifics on funding as the election approaches.
Here’s where we are:
Monday, July 13: Proposition 14, which asks Californians to continue to support stem cell research funding via bond sales.
Tuesday, July 14: Proposition 15, which seeks to amend the property tax structure so commercial land isn’t taking advantage of a law passed with protecting elders from excessive increases.
Wednesday, July 15: Proposition 16, which seeks to undo the state’s ban on affirmative action.
Thursday, July 16: Proposition 17, expanding voting rights to include parolees.
Friday, July 17: Proposition 18, allowing 17 year-olds to vote.
Monday, July 20: Proposition 19, Property Tax Transfers
Tuesday, July 21: Proposition 20, Rolling back criminal justice reform
Wednesday, July 22: Proposition 21, Rent control all over again
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Proposition 22: Changes Employment Classification Rules for App-based Transportation and Delivery Drivers. Initiative Statute
For: Protect App-Based Drivers & Services, with major funding from Lyft, Uber Technologies, and DoorDash.
Website | Facebook | Twitter | Endorsers | Text of Measure
Against: Sick of Gig Greed, Funded by Working Families Issues Committee, sponsored by the California Labor Federation, AFL-CIO
Website | Facebook | Twitter | Endorsers |
Why: The California Legislature, following a court ruling -- Dynamex Operations West, Inc. v. Superior Court -- sought to codify (via AB5) the finding, which held that most workers are employees, ought to be classified as such, and the burden of proof for classifying individuals as independent contractors belongs to the hiring entity.
AB5 requires the use of the ABC test, which includes a three-prong assessment to determine if a worker was misclassified:
(A) that “the individual is free from direction and control,” applicable both “under his contract for the performance of service and in fact,”
(B) that “the service is performed outside the usual course of business of the employer,” and
(C) that the “individual is customarily engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”
High profile companies involved in aspects of on-demand transportation services who built their business operations around the utilization of “independent contractors”vowed to ignore the law and set about to create a ballot measure exempting themselves from its provisions.
How: The gig companies supporting Prop 22 have put together a war chest of more than $110 million. Organized labor will fund the opposition, and have already raised just under $700 thousand to create the infrastructure for a campaign.
The Rest of the Story:The future of the so-called gig economy is at the core of this situation. Much of the social safety net created during the 20th century revolves around the connections between employers and employees. By severing this connection maintained through government, corporate entities are eroding the financial and moral foundation of those relationships.
Social security, health insurance, workman’s comp, unemployment, minimum wage, and sick leave are all part of this picture. As we’ve seen with unemployment resulting from the COVID-19 virus, taxpayers were stuck with the cost for gig workers.
The bigger picture here is that, if a social safety net isn’t going to be paid for/enabled by employment relationships, who is going to pay? In order for corporate “human capital” to be solely responsible for funding, take home pay would have to increase substantially, and that ain’t happening.
At the heart of the libertarian/right wing agenda is the notion that the government has no obligation for the welfare of its citizens much beyond the common defense and protecting private property. These gig companies and much of corporate America are in practice moving our society towards that aim, although the language surrounding their actions is often sugar-coated.
The sweetener offered by corporate America is the illusion of “freedom” for the humans performing the labor making shareholder profitability possible. At best, the reality for people pursuing these options is a short-term cash bump (the goalposts for pay are always changing). Long-term prospects, dangers, and possibilities aren’t part of this deal.
AB5 preserves the traditional arrangement involving employment safeguards, which were enabled by the rise of organized labor. Thus, opponents of Prop 22 will invoke the spectre of “union bosses.”
This will be done to distract from the fundamental issues at question.
The companies writing Prop 22 offered those drivers several new but smaller benefits than they would have if they were actual company employees.
Take driver’s pay. Prop 22 states that drivers would earn at least 120 percent of the local minimum wage—a pay bump. But NELP estimates that passing Prop 22 would actually decrease wages by $500 a week. The discrepancy is in defining hours worked. Uber’s proposition uses “engaged time,” which only includes the time when “an app-based driver accepts a rideshare request or delivery request to when the app-based driver completes that rideshare request or delivery request.” NELP says wait time, the time when drivers are looking for riders to pick up, should be included too. This can lead to widely different estimates of how much drivers are paid per hour.
The Prop 22 campaign promise to give full-time drivers health benefits has the same flaw, says the report. While the initiative says drivers who work 25 hours a week or more will get a 100 percent health subsidy based on averaging Affordable Care Act premiums, the report estimates drivers would actually need to work “more than 39 hours a week” for that benefit. Employment would offer an easier road to healthcare, researchers say.
Similarly, discrimination protections, the report says, are actually better if you’re employed. And the same goes for the much-touted “flexibility” of deciding one’s own schedule. “Real flexibility at work means having access to real paid time off,” says Rebecca Smith of the National Employment Law Project. Under the ballot measure, there would be no guarantee of paid sick leave, paid family leave, or unemployment compensation.
Politically it’s kind of like how the GOP swears up and down about the dangers of “Obamacare,” but has only offered cheap limited-coverage plans (that very few are buying). When it comes to actual coverage they have nothing to offer as an alternative other than empty promises.
If the app companies get their way, they would never pay a dime into California’s unemployment insurance program, which is already stretched thin as millions who have lost their jobs to COVID-19 fight for coverage. A study by the University of California, Berkeley’s Labor Center found that Uber and Lyft combined have already left a $400 million crater in our state unemployment fund, after stealing five years worth of payments from taxpayers and hardworking families.
App companies are prepared to spend a fortune to take away their driver-employees’ right to paid sick leave and health care. As a result, sick drivers — or those who know they’ve been exposed to COVID-19 — will find themselves forced to make an impossible choice between working to pay the rent or staying home to keep themselves and their riders safe.
https://twitter.com/LaurenKGurley/status/1285937630706884610?s=20
Let’s face it, the need for profitability (most of these companies are bleeding money) and the drive to find new capital create conditions whereby management needs to short change their workers.
Uber claims more than 150,000 jobs will be lost if Prop 22 goes down to defeat. What they don’t want us to know is that they have a 68% turnover rate among drivers driven by poor business practices.
A survey in April found that 67% of ride-share drivers were unable to pay rent in May due to the pandemic’s effects on their income, and 68% had not received any gloves, disinfectant or masks from Lyft or Uber.
Lyft responded in June by setting up an online store where drivers could buy protective gear. The move wasn’t well-received, to put it mildly.
And get a load of how the companies built in protections for their own self interests with Prop 22:
Crucially, the measure would also prevent local municipalities from setting their own standards for how gig drivers are treated. By creating a statewide standard, cities would not be able to pass local ordinances to boost driver pay or guarantee health protections, as happened in San Francisco when the city council passed a sick pay rule in early April. And, by keeping drivers from full employment, it would effectively bar workers from unionizing. If workers did want to form a union, says Ray Fuentes, a co-author of the report, it would need approval from seven-eighths of the state legislature.
The bottom line is that these companies enable wrongdoing as part of their everyday business practices.
Take Uber, for instance:
Saudi Prince “Bonesaw” Mohammed bin Salman owns more than 10% of Uber, with over $3.5 billion invested.
Uber brazenly and illegally tested self-driving cars on public streets in San Francisco.
While regular taxi companies around the US withheld their services as part of the national protest against Trump’s Muslim ban, Uber told it’s drivers to scab.
And we shouldn’t overlook the Uber promotion letting customers request "Hot Chick" drivers, which combined with the company’s lackadaisical background checks and accountability created its own set of problems.
These companies are about to spend a ton of money arguing for their drivers’ “freedom.” Ultimately, it’s the same kind of “freedom” the anti-vaxxers and anti-mask people are looking for.
Vote no on Prop 22 so the rest of us don’t get stuck with the political, economic, and moral consequences of all that “freedom.”
Voter Guide – You’ve Voted for President, what’s next?
I’ll be writing about many ballot measures and candidates between now and the end of September. That work will be condensed into an handy-dandy voter guide just in time for your mail-in ballots to arrive. I’m the guy who coordinated San Diego Free Press’s Voter Guides over the past decade, so this won’t be my first effort. Stay tuned.
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Lead image via Port Washington Fire Department