California voters to decide the fate of app based drivers

When California Governor Gavin Newsom signed AB 5 that took effect this past January, rideshare companies like Uber and Lyft, as well as food delivery service Door Dash, were forced to add their drivers as employees instead of independent contractors. The companies and their supporters, including drivers, promoted an initiative to allow voters to decide their fate.

Proposition 22, “Exempts App-Based Transportation and Delivery Companies from Providing Employee Benefits to Certain Drivers. Initiative Statute”

Ballot summary

The ballot summary is as follows:^[17]

Ballot summary

The ballot summary is as follows:^[17]

“

Classifies drivers for app-based transportation (rideshare) and delivery companies as “independent contractors,” not “employees,” unless company: sets drivers’ hours, requires acceptance of specific ride and delivery requests, or restricts working for other companies.

Independent contractors are not covered by various state employment laws—including minimum wage, overtime, unemployment insurance, and workers’ compensation.

Instead, independent-contractor drivers would be entitled to other compensation—including minimum earnings, healthcare subsidies, and vehicle insurance.

Restricts certain local regulation of app-based drivers.

Criminalizes impersonation of drivers.^[18]

”

What else would the ballot measure change?

Since Proposition 22 would consider app-based drivers to be independent contractors and not employees, state employment-related labor laws would not cover app-based drivers. Proposition 22 would enact labor and wage policies that are specific to app-based drivers and companies, including:^[1]

payments for the difference between a worker’s net earnings, excluding tips, and a net earnings floor based on 120% of the minimum wage applied to a driver’s engaged time and 30 cents, adjusted for inflation after 2021, per engaged mile;
limiting app-based drivers from working more than 12 hours during a 24-hour period, unless the driver has been logged off for an uninterrupted 6 hours;
for drivers who average at least 25 hours per week of engaged time during a calendar quarter, require companies to provide healthcare subsidies equal to 82% the average California Covered (CC) premium for each month;
for drivers who average between 15 and 25 hours per week of engaged time during a calendar quarter, require companies to provide healthcare subsidies equal to 41% the average CC premium for each month;
require companies to provide or make available occupational accident insurance to cover at least $1 million in medical expenses and lost income resulting from injuries suffered while a driver was online (defined as when the driver is using the app and can receive service requests) but not engaged in personal activities;
require the occupational accident insurance to provide disability payments of 66 percent of a driver’s average weekly earnings during the previous four weeks before the injuries suffered (while the driver was online but not engaged in personal activities) for upwards of 104 weeks (about 2 years);
require companies to provide or make available accidental death insurance for the benefit of a driver’s spouse, children, or other dependents when the driver dies while using the app;

Proposition 22 would define a driver’s engaged time as the time between accepting a service request and completing the request.^[1]

Uber CEO Dara Khosrowshahi said, “What Prop. 22 is about is starting to move into the best of two worlds: you’ve got flexibility, you’re your own boss, you’re your own CEO, but you do have protections.”^[15] In Rigging the Gig, researchers with the Partnership for Working Families (PWF) and National Employment Law Project (NELP) wrote, “the benefits contained in the initiative pale in comparison to what workers are entitled to under state law.”^[16]

Proposition 22 would also require the companies to: develop anti-discrimination and sexual harassment policies; develop training programs for drivers related to driving, traffic, accident avoidance, and recognizing and reporting sexual assault and misconduct; have zero-tolerance policies for driving under the influence of drugs or alcohol; and require criminal background checks for drivers. The ballot initiative would criminalize false impersonation of an app-based driver as a misdemeanor.^[1]

Amending Proposition 22 would require a seven-eights (87.5%) vote in each chamber of the California State Legislature and the governor’s signature, provided that the amendment is consistent with, and furthers the purpose of, Proposition 22. Changes that are not considered consistent with, and furthering the purpose of, Proposition 22 would need voter approval.^[1]