California lawmakers had the chance last year to strike a deal with app-based companies to boost the benefits and protections that workers on their platforms would receive. They didn’t, and in hindsight, that looks to be a terrible mistake.
On Tuesday, California voters overwhelmingly backed Proposition 22, a measure to treat app-based drivers for Uber, Postmates and the like as independent contractors eligible for more limited benefits and protections than the Legislature provided last year in Assembly Bill 5. The proposition was sponsored by the app companies, which spent more than $200 million to persuade voters to approve it. That was about 10 times as much as opponents — largely organized labor — spent to try to defeat the measure.
In doing so, the proposition’s sponsors laid out a road map for how companies can write their own employment laws and regulations through the ballot box. Californians should take that as a warning.
AB 5 codified a 2018 state Supreme Court ruling that required companies to treat more independent contractors as employees. Instead of creating a third category of protections for gig workers, which would have been the farsighted thing to do, labor-friendly Democrats in the Legislature spurned overtures from Uber et al. and, in essence, required those workers be treated as employees eligible for minimum wage, overtime pay, unemployment insurance, workers’ compensation and other state-mandated protections.
These terms would clearly be better for drivers on those platforms. But the app companies — many of which have not been profitable — argued that they wouldn’t be able to afford the increased costs unless they radically changed their business models. Instead of allowing drivers to work on demand, when they wanted and where they wanted, they would have to schedule driver shifts and territories. Plus, they contended, they would need dramatically fewer drivers, given that the vast majority of gig workers now put in only a few hours a week.
For the tens of thousands of Californians who count on doing a few hours of gig work occasionally to help pay the bills or spend a bit more, the passage of Proposition 22 means that those opportunities will still be there. But for the workers who’ve chosen gig driving as a full-time job — the ones the apps rely on to deliver the bulk of their services, and who would be most likely to keep their gigs if Proposition 22 failed — the result is a perpetuation of their second-class treatment.
The app companies have provided a template for future efforts, in California and elsewhere, to use the ballot box to reclassify employees as contractors and cut their benefits. Before we see the next Proposition 22, lawmakers should do the work they could have done last year and create a new category in state employment law for gig workers that provides the protections that those who make a living at these jobs need without sacrificing the flexibility and choice that make these jobs attractive.
FROM AN EDITORIAL IN THE LOS ANGELES TIMES