Last week, all the richest liberals in California were celebrating—and not just Joe Biden’s victory. On November 3, Golden State residents voted on a ballot measure called Prop 22, a proposal which will have an enormous effect on the livelihoods of thousands of gig economy workers in the state.
Following the most expensive ballot initiative campaign in California history, bankrolled primarily by Uber and Lyft—a campaign which blanketed TV stations with pro-Prop 22 ads and forced Uber users to “confirm” their support for the measure before ordering a ride—the proposal passed. This means that, in California, many workers at Uber, Lyft, DoorDash, Instacart, and Postmates are no longer considered “employees.” Now they are “contractors,” and therefore unworthy of the minimal benefits which these companies would otherwise be obligated to provide.
Previously, these workers were appropriately classified as such under California Assembly Bill 5 (or AB5). AB5 outlines the definition of a contractor as opposed to an employee according to these three facts:
- The worker is free to perform services without the control or direction of the company.
- The worker is performing work tasks that are outside the usual course of the company’s business activities.
- The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
This classification entitles Uber and Lyft drivers to benefits such as workers compensation, unemployment and health insurance, and paid sick and family leave. Unsurprisingly, the companies have been trying to wriggle their way out of their responsibility for years. They appealed to a California superior court in August 2020, but Judge Ethan Schulman upheld the definition of a contractor as outlined in the bill. He wrote the following:
It’s this simple: [Uber and Lyft’s] drivers do not perform work that is ‘outside the usual course’ of their businesses. [Their] insistence that their businesses are ‘multi-sided platforms’ rather than transportation companies is flatly inconsistent with the statutory provisions that govern their businesses as transportation network companies, which are defined as companies that ‘engage in the transportation of persons by motor vehicle for compensation.’ It also flies in the face of economic reality and common sense.
But apparently common sense is not so common. Californians, inundated with misleading pro-Prop 22 ads—fueled by a record $200 million political campaign—voted 58 percent in favour of the ballot measure. One of the biggest mischaracterizations peddled by these companies is the idea that, under Prop 22, drivers are guaranteed to be paid 120 percent of the minimum wage. In 2021, this will supposedly equal $15.60 an hour.
The UC Berkeley Labor Center has examined this claim and exposed its flaws. Firstly, the time in which drivers are waiting to pick up passengers is not counted as “working time,” despite the fact that waiting for a customer while on the job obviously amounts to being on the clock. The Labor Center’s calculations reveal that, on average, drivers are only with a passenger 67 percent of the time—and therefore, according to Uber and Lyft, are only “working” 67 percent of the time. This immediately brings the $15.60 salary down to $10.45. By factoring in the miniscule reimbursement plan outlined in Prop 22, as well as unreimbursed expenditures such as vehicular damage and the cost of lost employee benefits, the study shows that drivers will be earning approximately $5.64 an hour, an estimate which they clarify may still be too high, as it does not include the cost of workers compensation insurance.
The profiteers of these companies are evidently pleased, and they are wringing their hands at the prospect of exporting worker disempowerment. Uber CEO Dara Khosrowshahi and Lyft Chief Policy Officer Anthony Foxx have already expressed a desire to promote this nefarious measure in other states. As the gig economy continues to grow (in 2016, 24 percent of all American workers were earning some money in this fashion), Prop 22 represents a massive victory for companies which have been trying to avoid the responsibilities of humane employment for years, and a huge defeat for workers across the country.
Owen Schalk is a writer based in Winnipeg. His areas of interest include post-colonialism and the human impact of the global neoliberal economy.