As the nation watched Trump flail through democratic norms in a pitiful attempt to undo the will of more than 80 million Americans, it missed something with a more harmful long-term impact: the passage of California’s Proposition 22.
Prop 22 creates a special employment designation for gig-workers like Uber, Lyft, and Doordash drivers. It forces them to remain independent contractors and takes away many of the protections other works in the state get, like unemployment benefits and workers’ compensation.
If you want to learn more about the history of taxi work and how organized labor can advocate for today’s drivers wages and working conditions, be sure to check out our interview with Veena Dubal this week!
Prop 22 holds the dubious distinction of the most expensive ballot initiative in American history. Lyft, Doordash, Uber, Postmates, Instacart, and other app-based service companies poured more than $200M into ensuring its passage. Uber and Lyft bombarded driver with threats and passengers with pleas to vote YES on Prop 22.
So, why did these companies all break the bank to make sure it passes? Money. Well, money and power.
Prop 22 exempts app-based drivers from AB 5, a California law requiring these companies to give their independent contractors employment status. In so doing, it exempts the companies from paying out paid time off, health insurance (if driving less than 15 hours per week), unemployment insurance, payroll tax, and workers’ compensation.
The law also mandates that drivers will only get paid when they have a client or order in their car, not the time they spend waiting to pick someone (or someone’s meal) up. It also reimburses drivers only 30 cents per mile—and only while a passenger is in the car. Additionally, since the drivers remain independent contractors, they’re responsible for paying both the employer and employee share of the payroll tax because they technically work for themselves.
Prop 22 does mandate that drivers earn 120% of minimum wage (a little over $15), which sounds great until you account for the loopholes. They’ll only get this wage when they have a passenger in the car; they’ll need to pay for the vehicle, insurance, gas, and repairs out of pocket; they’ll have to pay payroll tax; they won’t get paid sick leave, breaks, rest time; and unless they drive more than 25 hours a week, they’ll get less than half (if any) of their healthcare covered. When UC Berkeley accounted for these factors, drivers began making a staggeringly low $5.64 per hour, or if driving more than 25 hours per week, $6.67.
“I think we need to go back to basics here that just because of the shiny app, just because it involves an iPhone, just because drivers are dispatched through algorithms as opposed to by a dispatch company, this does not mean that all of a sudden exploitation is acceptable,” said Veena Dubal, in an interview that was recorded before the passage of Prop 22. “And so having those hard conversations with people around you, building back a culture where this kind of exploitation isn’t acceptable, I think is the other really critical thing.”
Prop 22 allows app companies to continue shirking their responsibility to workers and will exacerbate already-declining pay for drivers and render work even more precarious. The less money drivers make, the more Uber and Lyft pocket. Prop 22 also makes it harder for employees to unionize because they aren’t employees and remain highly atomized with little inter-driver contact.
Prop 22 is likely to remain in effect indefinitely without federal intervention: the proposition can only be undone by a 7/8 majority in both houses of California’s legislature, which is both unheard of and impossible.
Disturbingly, it now appears Prop 22 will soon be coming to a statehouse near you. Already, Lyft has spent more than a million dollars on a SuperPac called Illinoisans for Independent Work seeking to curtail worker rights in the Midwest. So far, Lyft has been the sole funder of this effort. On the East Coast, New Yorkers for Independent Work aims to achieve a similar goal. If left to their own devices, Uber and Lyft will undoubtedly wage war on workers’ rights in every state in the union with devastating consequences for drivers. Every time a bill like Prop 22 passes, Uber and Lyft get richer, gain more power over their employees, and push us a little further down the path of technological feudalism.
Prop 22 is a severe blow to workers, but there is still time and political willpower to stop the tide from turning nationwide. Organized labor – unionization – may be the most promising route to secure fair wages and work conditions. The start of the newly elected Biden Administration will provide new opportunities to make headway against monopolies and anti-labor behavior. We need to demand that they prioritize protecting American workers.
Chapman, Lizzette. “California’s Prop 22 Would Be Virtually Permanent If It Passes.” Bloomberg.com, Bloomberg, www.bloomberg.com/news/newsletters/2020-10-20/california-s-prop-22-would-be-virtually-permanent-if-it-passes.
Department, Employment Development. AB 5 – Employment Status, edd.ca.gov/Payroll_Taxes/ab-5.htm.
“The Future of Antitrust: Zephyr Teachout.” Future Hindsight, www.futurehindsight.com/episode/the-future-of-antitrust-zephyr-teachout/.
Gig Companies Spend Millions on Anti-Labor PACs In Illinois and New York, www.vice.com/en/article/m7avyp/gig-companies-spend-millions-on-anti-labor-pacs-in-illinois-and-new-york.
“Proposition 22: Official Voter Information Guide: California Secretary of State.” Proposition 22 | Official Voter Information Guide | California Secretary of State, voterguide.sos.ca.gov/propositions/22/.
Service, CNN.com Wire. “Prop. 22: After $200 Million California Brawl, Uber and Lyft’s Gig Worker Fight Is Far from Over.” The Mercury News, The Mercury News, 16 Nov. 2020, www.mercurynews.com/2020/11/16/prop-22-after-200-million-california-brawl-uber-and-lyfts-gig-worker-fight-is-far-from-over/.