Understanding Proposition 22

Proposition 22 and the Gig Economy

You may be seeing a lot of political ads referencing Uber drivers and food delivery services.  Proposition 22 is on the ballot for November 2020 – the proposed law seeks to exempt food delivery businesses and ride-sharing firms from Assembly Bill 5 (AB5).

AB5 is a California law that passed in September 2019 that forced companies employing gig workers to classify their drivers as regular employees. Prop 22 has strong support from the gig-based companies. The proposition was created and funded by Lyft, Uber, Postmates, Doordash, and Instacart. 

According to the San Francisco Chronicle, gig businesses have contributed $110 million to support Prop 22. The companies seek to skirt AB5 and have drivers operate as independent contractors to save on labor costs. Lyft, Uber, and the like reserve full-time employee status for corporate positions.

Emergency Stay Granted to Uber and Lyft

Uber and Lyft have a temporary stay on their appeal of the court ruling that requires their drivers to be classified as employees. If the emergency stay was not recently granted by a California court, the rideshare companies would have threatened to cease business operations throughout the state.

A potential shutdown of Uber and Lyft in CA would have been an inconvenience for customers who use the ride-hailing apps. This would theoretically be an incentive for rideshare customers to vote in support of Proposition 22.

Support for California Proposition 22

Under California Proposition 22, drivers for Uber and Lyft would be allowed to continue working within their own self-determined schedules. Prop 22 additionally provides minimum earnings for each driver and contributes a small amount toward health and occupational insurance.

Even with such added costs, it is cheaper than upgrading all Uber and Lyft drivers to employees, which would increase labor costs by up to 30% for the San Francisco-based rideshare companies. Campaign ads in support of Proposition 22 in California contend that many drivers are also supportive.

The CEO of Uber, Dara Khosrowshahi, recently wrote an op-ed in the New York Times that said gig-based companies should contribute to a benefits fund to maintain schedule flexibility for drivers and to cover healthcare fees. He added that the company wants to support laws that can make that possible.

The Uber CEO also brought up that the current employment system forces workers to make a choice between being a full-time employee with benefits and little flexibility or an independent contractor, which allows more flexibility but does not provide a safety net.

Opposition to California Prop 22

Critics of California Prop 22 argue that if the proposition passes, gig drivers would continue to lack the rights and benefits available to regular employees. Some drivers and labor advocates have always maintained that the practices of Uber and Lyft, et al. are harmful to workers.

The backlash for the rideshare companies stems from low wages and the lack of benefits such as unemployment and health insurance. Such issues result in less control over the livelihoods and labor of gig workers. This is one of the top reasons why some voters choose to support AB5 over Prop 22.

Read, Research, and Decide on 2020 California Proposition 22

Proposition 22 is on the California ballot for November 2020.  A synopsis is given in the voter’s guides that were recently mailed.

Watch the YouTube video: below is a short video explaining the basics of Proposition 22 in California.

Uber Accident Lawyer in Sacramento, CA

Thanks for reading – I’m Ed Smith, a Sacramento Uber Accident Lawyer.  When you are involved in an accident as a Lyft or Uber passenger and sustain injuries, you may have a claim for monetary damages against the rideshare company, another involved driver, or both.  If you find yourself in this situation, please call our office for free and friendly legal advice.  Our local number is (916) 921-6400, or if you will be calling from outside the 916 area code, dial (800) 404-5400.

Some of our past case results can be viewed on our verdicts or settlements page.

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