New Report Finds Proposition 22 (Uber, Lyft & DoorDash Ballot Initiative) to be harmful to workers, communities, and good government in California
San Francisco, CA— A new report published by The Partnership for Working Families and the National Employment Law Project (NELP) called “Rigging the Gig” highlights the alarming potential impacts of Proposition 22.
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Proposition 22: An Attempt To Be Exempted From California Law
“Simply put, Proposition 22 is an effort by some of the richest corporations in the world to permanently exempt themselves from California law. If successful, this measure would become the gold standard for future corporate ballot initiatives to gut the ability of states and cities to protect workers.” said Rey Fuentes, of the Partnership for Working Families.
Proposition 22, the “Protect App-Based Drivers & Services Act”, is a ballot proposition funded by Uber, Lyft, DoorDash, Instacart, & Postmates and has been understood as simply providing a narrow exemption from AB 5 (California’s landmark misclassification law) for these companies.
However, as the report reveals, the ballot initiative goes beyond AB 5, and instead would allow for the broad deregulation of the industries in which app-based delivery and transportation companies operate. Moreover, the initiative would eviscerate worker protections by deliberately misclassifying workers and prevent the California legislature or local governments from doing anything about it.
“Proposition 22 is not just securing an AB 5 carveout for gig companies; it is also designed by gig companies to ensure that these corporations are exempted from having to observe basic labor protections for workers for generations to come.” said Carlos Ramos, Lyft driver based in San Diego and member of Gig Workers Rising.
What Companies Can Do If This Proposition Is Approved
If approved by voters, Proposition 22 would ensure that gig corporations could:
- Avoid ever paying for overtime, critical work expenses (such as full mileage expenses or cell phones), or even the state’s minimum wage. These omissions could cost drivers as much as $500 per week in lost wages and reimbursements;
- Prevent workers from accessing a single day of paid sick or family leave, unemployment benefits many need during this pandemic;
- Deny workers long-term medical or income protections if they are disabled on the job;
- Discriminate on the basis of immigration status - a protection that is crucial given that 56% of app-based transportation and delivery workers are immigrants;
- Obscure access to health benefits that would require individuals to work longer hours for far less assistance than advertised.
"In the middle of a pandemic, these companies have still seen fit to not only ignore AB 5 and continue to misclassify their workers, but the millions they spend on Proposition 22 would go to stripping access to important protections like paid sick or family leave, or unemployment insurance, or a pathway to collective bargaining. If Proposition 22 is not defeated, it will initiate a new era of corporate exploitation of workers, not just those who work on apps." said Edan Alva, Lyft driver based in the Bay Area and member of Gig Workers Rising.
What’s more, the measure would cancel any local government labor law that conflicts with the measure. This includes many of the emergency measures — like paid sick leave or personal protective equipment requirements — that cities throughout California pass in response to COVID-19.
"If Proposition 22 passes, it will send a strong message to corporate America: ‘With enough cash and enough spin, any business can buy its way to an environment free of responsibility.’ The initiative shows just how out of touch the companies are with what most Americans are thinking. At a moment when we may finally be coming to grips with our racist history and ongoing systemic racism, the companies want voters to approve erasing baseline labor rights for their largely Black and brown workforce.” said Rebecca Smith of the National Employment Law Project.
The measure also has aggressive lock-in mechanisms that all but eliminate the ability of state officials to change the law that are more aggressive than other recent ballot measures. For example, the initiative would require a 7/8ths vote by the legislature before any amendments to the law could be considered.
“Proposition 22 is dangerous not just for workers but to our entire democracy. Requiring a 7/8ths vote by the state legislation to amend the law and ending any local labor laws that conflict with the measure is unprecedented. I lent my voice to help pass emergency sick leave for drivers in Oakland, the very type of law that would be prevented from being enforced if this initiative becomes law.” said Cherri Murphy, Lyft driver based in Oakland and member of Gig Workers Rising.
The Partnership for Working Families (@P4WF) is a national network of 20 powerful city and regional affiliate groups based in major urban areas across the country. The Partnership advocates for and supports policies and movements that build more just and sustainable communities where we live and work. Taking lessons learned at the local level and applying them to the national conversation, the Partnership builds a framework for addressing climate change, inequality, racial and social injustice. For more information, visit us at www.ForWorkingFamilies.org
For 50 years, The National Employment Law Project (@NelpNews) has worked to restore the promise of economic opportunity for working families across America. In partnership with grassroots and national allies, NELP promotes policies to create good jobs, enforce hard-won workplace rights, and help unemployed workers regain their economic footing. For more information, visit us at www.nelp.org
Rigging the Gig: How Uber, Lyft, and DoorDash’s Ballot Initiative Would Put Corporations Above the Law and Steal Wages, Benefits, and Protections from California Workers
by Rey Fuentes, Rebecca Smith, and Brian Chen
For years, app-based companies, such as Uber and Lyft, have been selling a lie. They claim to have revolutionized work, enabling individuals to pick up some side income or earn a full-time living on their own terms. Yet, the recent coronavirus pandemic has revealed the truth: years of venture capitalist-funded growth have been fueled by artificially low labor costs that leave every single worker on these platforms at risk. Their business models more closely resemble 19th century sweatshops than 21st century innovation.
This is because these companies have spun the courts, twisted state legislatures and local governments, and dizzied the public into thinking that drivers and delivery persons were so-called “independent contractors,” akin to independent business owners.6 As they slapped this label on workers, the companies proceeded to avoid and undermine nearly every labor protection on the books, pocketing hundreds of millions of dollars in the process.
Far from the entrepreneurial opportunity advertised by the companies, “gig” work is a race to the bottom that preys on the desperation of people with little choice but to accept the terms of insecure, low-paying, unsafe work. It is no coincidence that Black and Latinx workers who face racist obstacles to entering the “formal” economy – with decent wages and benefits - are overrepresented on the app platforms. Yet the app-based economy is no escape from
entrenched racism. It is age-old occupational segregation packaged in a new gloss of micro-entrepreneurship. If workers of color are “their own boss” on these platforms, it is a cruel irony that they have been made to reproduce the conditions that perpetuate vast wealth gaps between themselves and their white peers. All the while, the companies amass their dazzling wealth by avoiding any and all obligations to their employees.
The current unemployment crisis exemplifies the unfair conditions for people working on the platforms. First, these app-based companies refused to report wage data to California or pay into the state’s unemployment insurance fund (a practice that has saved Uber and Lyft a combined $413 million since 2014). As a result, their workers – who face unprecedented rates of unemployment due to the pandemic – are being denied state unemployment benefits. All the while, companies like Uber used the crisis to lobby the federal government to create a taxpayer-funded bailout for their unemployed workforce and simultaneously demand that California keep workers from accessing state benefits.
Moreover, in the midst of this pandemic, Uber, Lyft, and other companies have also fought to keep workers from accessing California’s paid sick leave benefits and skirted around their obligation to provide basic safety protections to workers. This is in addition to years of avoiding paying overtime wages to drivers putting in 50-hour workweeks, foisting business expenses onto workers – such as car repairs and mileage expenses – and denying workers’ compensation protection for on-the-job injuries.
The sheer scope of the companies’ mendacity led all three branches of California’s government to take a series of landmark legislative and legal actions to make clear that, in this state, corporations cannot deny workers basic protections just by calling them independent contractors. With the passage of Assembly Bill 5 last year, app-based transportation and delivery companies must now reckon with a legal test that clearly designates their workers as employees under much of California law, opening up crucial labor protections at a moment when these workers need them the most.
State and local officials have begun to enforce the new law. In San Diego, a Superior Court judge sided with the City Attorney and ordered the delivery company Instacart to refrain from misclassifying its workers. Similarly, the District Attorney in San Francisco filed a recent lawsuit against DoorDash alleging that the company has engaged in unfair business practices by misclassifying its delivery workforce. And, in a landmark lawsuit filed in May 2020 by California’s Attorney General and the City Attorneys from three of the state’s largest cities, the state of California is seeking to put an end to the unlawful misclassification schemes used by Uber and Lyft.
Yet, having failed to obtain a special exemption from state law and facing the ongoing legal challenges described above, five of the largest app-based companies – Uber, Lyft, Instacart, Postmates, and DoorDash – have committed more than $110 million to support the “Protect App-Based Drivers and Services Act.” This ballot measure is designed to:
- Overturn AB 5 as it relates to these app-based companies;
- Exempt transportation network and delivery network companies from broad swaths of California law such as overtime, discrimination protections, or sick leave (which they have flouted since their founding);
- Completely prevent future elected officials from amending the law; and
- Override local governments to stop them from regulating these companies or protecting their communities.
The companies supporting this initiative have described the effort as simply a means to protect flexibility and “[improve] the quality of on-demand work.” However, as described in more detail below, the effort is more accurately described as a coordinated attempt to permanently deregulate the industries in which these companies operate.
Moreover, the ballot initiative reveals the companies’ hypocrisy as they publicly announce corporate support for racial justice. Following the mass movements against police violence and repression, Uber – the industry leader in dispossessing workers of their rights under the law – tweeted that they “stand for racial justice” and announced that they would waive delivery fees for Black-owned businesses (a largely empty gesture as restaurants reported that Uber Eats continued to charge them a 30% fee on each order).
Yet, the ballot initiative for which Uber has committed $33 million would strip Black workers of critical workplace rights that provide financial stability, including paid sick leave, broad antidiscrimination protections, and a pathway to organizing. Proposition 22 is directly at odds with the Movement for Black Lives’ Economic Justice platform, which calls for “[t]he right for workers to organize in public and private sectors especially in ‘On Demand Economy’ jobs.”
What follows is a description of the current legal landscape, how Proposition 22 fits into an overall corporate interference campaign, and how the ballot initiative would strip workers of critical protections to which they are currently entitled while offering meager and illusory benefits in return.
Read the full report here.