Op-Ed: Prop. 22 an Assault on Democracy, Human Rights

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?

  1. 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.)
  2. 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.
  3. 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].

13 Comments

  1. > Diego Aguilar-Canabal is a writer, social services coordinator and community organizer.

    My community organizer says I should vote FOR Prop 22.

    My community organizer is smarter than your community organizer.

  2. I appreciate Diego’s take.

    UBER and Lyft built apps designed for employees, then proceeded to classify drivers as independent contractors.

    I’d like to see drivers remain independent, but they need to have an app that answers to the needs of independent contractors. UBER and Lyft both impose controls and policies that invalidate their claim that these drivers are independent.

    If I’m an independent contractor, then I must have control of my own enterprise. Where ride share is concerned, that means that drivers need:

    1. The ability to negotiate price on every trip.
    2. Transparent job offers that fully disclose all trip details prior to acceptance.
    3. The right to refuse trip offers without penalty.

    Nowhere in Prop 22 are these issues addressed. And given the history of UBER and Lyft of failing to honor their own policies, I don’t believe the voters should trust them to honor the promises within Prop 22.

    The “loss of schedule flexibility” and “we may have to abandon California as a market” scare tactics the gig app companies supporting Prop 22 is complete nonsense.

    Uber and Lyft are clearly mis-categorizing drivers as independent contractors due the the degree of control they impose on drivers.

  3. Diego Aguilar-Canabal is a life long union member who is afraid of big labor
    losing their influence.
    Game is over Diego.

  4. “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.” — Diego Aguilar-Canabal

    “Workers,” an otherwise noble word conscripted into the Red Army over a century ago is a favorite of totalitarians whose promises invariably end in the calcification of both human liberty and the economy. Just remember, the Soviet system freed the worker (individual producer in capitalist terms) of many burdens but never, ever produced an economic or social upside.

    If Uber drivers, all of whom possess the mobility and freedom to maximize their self-marketing opportunities, desire to reduce employment-related risks and burdens they can do so on their own, without relying on the government. There are other jobs, some of which, like the armed services, market reduced burdens to the individual in their recruitment ads.

    Whatever the case, should a sufficient number of drivers opt (as in free will) to go elsewhere, a scarcity would be created to which Uber would have to respond with additional incentives — without any arm-twisting by the big, bad government.

    I better end this now as there is a census worker (who goes where told in their own cars for an hourly wage without benefits) at my door.

  5. > 3. The right to refuse trip offers without penalty.

    What’s this about?

    I just assumed that an Uber driver can just turn of their app, or not “bid” on a trip.

    Are Uber drivers REQUIRED to take any trip that Uber commands them to take?

  6. Yes. If they don’t the algorithm removes them from the app and the “business contract” is terminated.

  7. Diego sounds like a Communist arguing for the “workers”.

    My family ran from a communist regime – stop bringing the hate to his country and stop lying to gullible Americans that their lives will somehow be better if we let the government “protect” us from the “evil capitalists”.

    The most evil that has ever come from anyone has been evil from totalitarian regimes

  8. Uber, Lyft, Doordash purport to be the dawning of the age of a new “sharing economy”. But that’s just a few billionaires colonizing BIPOC to avoid California labor laws, like minimum wage and disability insurance.

  9. If you don’t want to work for Uber or Lyft, then quit. Problem solved. Why do we need all this B.S.? Oh, because the Communist Party doesn’t like people making money they cannot control.

  10. @Work90

    You used the term “want to work.” Think about it, it represents a desire felt by healthy people, a quality we are relieved to see in our children, a characteristic fundamental to self-sufficiency. Yet an alarming number of Americans, and many of those they elect to lead them, want desperately to take control of it and co-opt it in the name of progress, just as did the Soviets when they dictated the where one could work (for the state), the what one could worship (communism), and the goals one could have in life (for a stronger and purer communist state).

    The idiots in Sacramento are too dumb to realize how quickly the socialist fire with which they play can get out of control.

  11. What happened tot hat wonderful concept called CHOICE? Seems that is one of our fundamental “human rights”. Don’t want to work for those conditions, then you can choose to work elsewhere. If enough people decide they won’t then Uber and Lyft will have to provide more. Drivers seem happy, why does “the State” have such a problem with the concept of choice?