California Props 2020

Prop 22 classifies rideshare and delivery drivers as independent contractors

Published: Mon, Oct 12, 2020, 4:05 PM
Updated: Mon, Oct 26, 2020, 1:59 PM
California Props 2020

Prop 22 classifies rideshare and delivery drivers as independent contractors

Published: Mon, Oct 12, 2020, 4:05 PM
Updated: Mon, Oct 26, 2020, 1:59 PM

Should app-based rideshare and delivery drivers be classified as independent contractors and receive the benefits outlined in this proposition? That's what Prop 22 proposes, but if it fails, Uber, Lyft, etc may have to make them employees.

Prop 22 would classify app-based drivers (e.g. Uber, Lyft, Postmates, DoorDash, Instacart) as independent contractors, overriding a new state law that compels these companies to make them employees. Prop 22 also stipulates that these companies provide new benefits to drivers. The benefits resemble some standard employment benefits: helping pay for health insurance, compensation in case of injury or death, a limit on the number of working hours in a 24 hour period, and a minimum earnings of 1.2x the minimum wage of driving hours only. Lastly, the legislature can make amendments with a 7/8th vote, but that's considered practically impossible. To make any changes to Prop 22 would probably require another ballot measure.

Supporters say...

Advocates say that drivers want the flexibility that being an independent contractor affords them, and most drivers support Prop 22. Supporters also say that drivers (and many other independent contractors) don't fit neatly in the old-world model of employees and contractors, and there should be a third type of worker.

Opponents say...

Critics agree that the gig workers should be in a different category that's neither an employee nor a contractor, and that legislation should protect workers from exploitation while allowing companies to thrive. The problem with Prop 22, they say, is that it is an inflexible solution that only applies to the companies who wrote it. The problem should be more broadly solved through legislation, not ballot initiative.

Opponents point to a survey of actively working drivers in SF that found that a majority relied on driving and deliveries as their primary source of income; a majority said it was their only income source in the previous month. Half said they work more than 40 hours/week. Those opposed to Prop 22 say this shows many people don't see these jobs as "gigs."

☝️ The question of 2020.

In a nutshell, this all started in 2018 when a California Supreme Court ruling defined an "independent contractor" very strictly. An independent contractor must be "free from control and direction" of the hiring company, and the contractor's work must be "outside the usual course of the hiring entity’s business."

A year later, the state legislature codified this ruling into law with AB5, which prompted many, many industries to ask for an exemption from the law. Many were granted, but guess which industry wasn't. Uber and Lyft have waged a long legal battle to claim that AB5 doesn't apply to them and it also unfairly targets them. In addition to that battle, they, along with DoorDash, Postmates and Instacart, have contributed almost $200M to put Prop 22 on the ballot and advertise it, a record amount raised. Prop 22 is their alternative to AB5, and they very much want you to vote yes.

Where we're at now: On Oct 22, an appeal by the rideshare companies failed in the appeals court. They must comply with AB5, essentially leaving it up the voters via Prop 22.

If Prop 22 fails, some unknowns still remain:

  1. Uber and Lyft are appealing a court order to comply with AB5. Update 10/22: the appeal failed.
  2. If the appeal and Prop 22 fails, and companies must classify drivers as employees, it's not clear how they will restructure to do so. Each company may act differently.
  3. The federal government is proposing new rules to guide courts' decisions on matters of whether a worker should be an employee or independent contractor.

It's possible Uber, Lyft, and others may move to a franchise model in California and license their brand to independently-operated vehicle fleets. A franchise model would keep drivers as independent contractors without benefits.

Alternatively, if the companies move towards converting drivers to employees, they estimate it would increase rider prices, wait times, and require some drivers to work 40 hour weeks. They also estimate they would have to decrease the number of drivers in CA from 209K to 51K (76% decrease).

At the corner. Where are u?


You have 3 minutes before I leave

I just got a text from Brian of the No on 22 campaign.


I have to respond.

You're a driver what do you think about Prop 22

I know a lot of drivers who want to stay flexible in their hours, and I know some drivers that want the benefits employment gives you

Prop 22 would give us some of those benefits + keep the flexibility

But Brian says you currently get paid below min wage

Yea, a lot of drivers I know complain about how they've been cutting our rates more and more. But Prop 22 would give us 120% of the minimum wage

But only for hours spent driving. It doesn't include waiting time and it's not like they're paying for your car and gas. And one study found drivers waiting about a third of their shift waiting for rides.

It's estimated you'd earn less than $5.64 an hour with this new "minimum wage"

If Prop 22 doesn't pass, I might be out of a job. I lost my other job in March. Uber Lyft has given me a job where I can decide my hours.

And if Prop 22 passes, I get benefits like a subsidy for health insurance and accident insurance

But are those quasi-benefits really enough for you? Wouldn't you rather get the benefits guaranteed to employees? Sure you'll get more than you have now, but you won't get any paid sick days, parental leave, payroll taxes paid for, unemployment insurance, or severance.

Not if it means working 40 hours a week. I can't do that and I hope to get another job asap and drive on the side to earn extra.

Nothing in the law prevents Uber Lyft from giving you the same flexibility, nor would you necessarily work 40 hours a week. 

You're right, but it's not practical. No other company provides flexibility like this to their employees.

Prop 22 only applies to app-based rideshare and delivery companies. It wouldn't really help other independent contractors in a similar situation.

Tell them to get an exemption, like so many other industries.

Are you coming down or what?

Sorry, just canceled the ride. Lyft just sent me a discount

Note: We intentionally omit links to arguments & rebuttals found in CA's official voter guide. We believe they exaggerate claims, are not fact-checked, and use ALL CAPS irresponsibly.