Uber, Lyft, and DoorDash have spent close to $200 million dollars in their campaign for Proposition 22, which would exempt app-based companies from California labor laws. The measure would deprive millions of workers of basic protections that app-based workers have in other countries, such as minimum wage and unemployment insurance.
To make matters worse, the Nov. 3 ballot measure could permanently hinder California’s representative democracy by requiring a seven-eighths supermajority in the legislature to amend it—all but guaranteeing that a now-powerless Republican Party would gain strong veto power over future labor protections. Prop. 22 would further exploit workers and leave Californians holding the bag.
The campaign’s talking points are dangerously misleading.
Prop. 22 would not bring “freedom” to so-called gig economy workers by exempting app-based drivers from employee status. It would calcify a status quo in which workers share a disproportionate burden of risk and overhead costs, while having little standing to enjoy the upside. The premise that app-based drivers could have more flexibility over their schedules and earn more money effectively running their own business is absurd. While plenty of W-2 employees have flexible schedules, Uber drivers do not enjoy true independence when they are misclassified as “independent contractors.”
The state legislature moved to classify gig workers as employees by passing Assembly Bill 5 last year, which codified a state Supreme Court ruling, Dynamex Operations West v. Superior Court (2018). The Dynamex ruling established a basic “ABC test” for determining if a worker should fill out a W-2 form or a contractor’s 1099 form. If a worker (a) controls how they perform their work, (b) is tasked with work outside of the hiring entity’s main business purpose, and (c) regularly performs this line of work as an established trade, then they can be an independent contractor.
Many professionals who would otherwise pass the ABC test were exempted, and continue to be exempted in new legislation passed after AB 5, on the premise that the balance of risk and reward was beneficial to workers as contractors. This power dynamic doesn’t apply to app-based drivers and delivery workers.
So how do they pass the ABC test?
- App-based drivers may choose when they drive, but they have no control over their rate of compensation. To wit, Uber has been repeatedly sued for wage theft in part due to its practices of undercounting mileage and suddenly slashing rates to undercut the competition, forcing drivers to work for many more hours than they used to in order to stay afloat. In some cases, Uber drivers have had to strategically band together to game the app’s algorithm in order to trigger surge pricing. W-2 employees would be guaranteed a minimum wage and overtime pay. Instead, Prop. 22 offers a minimum wage only for time spent serving customers, not time spent driving around looking for riders or waiting for delivery orders. After factoring in vehicle costs, UC Berkeley scholars estimated that an Uber driver’s hourly net pay could fall below $6 an hour under Prop. 22, below the federal minimum wage. (Current estimates range around $10.)
- Uber and Lyft disingenuously claim to solely operate as a platform that connects sellers with buyers, but aside from setting prices, the apps also withhold the customer’s destination from the driver until they accept the request. Therefore, the drivers are engaged in work that is central to the product the corporations are selling, not merely using the apps for their own entrepreneurship.
- Exemptions have largely hinged on delineating jobs in an “independently established trade”—for example, doctors, insurance brokers, realtors; and later writers, photographers, translators, and musicians. They have borne more risks and delayed some earning potential to be trained and certified in order to reap the rewards of a specialized career. But despite some classic movies about taxi drivers, driving is not a trade. Uber drivers are not bespoke mercantilists or country doctors peddling their wares from town to town. Their service is fully contained within the digital platform.
The Prop. 22 campaign falsely implies that W-2 status means employees would have to be “on the clock.” There are many professions in which employees can work on more flexible hours while the employer bears its appropriate share of risk. Auto mechanics, carpet layers, and carpenters are just a few examples of jobs in which workers are paid by the volume of their output, known as “piece-rate,” rather than an hourly wage. Workers in these professions can be paid piece-rate and still be guaranteed a minimum wage, unemployment insurance, healthcare, and other employee benefits.
Uber continues to socialize its losses by forcing taxpayers who paid into unemployment insurance, for example, to foot the bill for safety nets like Pandemic Unemployment Assistance when a sudden economic crash drastically cut incomes for drivers. Perhaps instead of dumping historic amounts of cash into a campaign to keep workers and the state holding the bag, Uber et al could have compensated these parties for the trouble.
It’s not really clear that they couldn’t.
Uber operates in countries like the United Kingdom where labor regulations require that their drivers receive some of these benefits. With the seven-eighths majority requirement, it is clear that they want to continue to exploit weak labor standards in the United States for a profit by empowering an anti-labor Republican Party.
Clearly, it is not infeasible for these corporations to treat workers fairly and pay a living wage—they merely resent that California is forcing them to do so.
Make no mistake: Proposition 22 is a heist in plain sight orchestrated by some of the wealthiest liars and thieves of our modern Gilded Age that would leave workers and Californians at large holding the bag. They control far more of their workers’ fortunes than they claim—we must not hand them control over our democracy as well.
Diego Aguilar-Canabal is a writer, social services coordinator and community organizer. Opinions are the author’s own and do not necessarily reflect those of San Jose Inside. Send op-ed pitches to [email protected].