By Samantha Bader
The American election is fast approaching, and while many people are by now well- aware of the presidential nominees, there has been less attention paid to other measures on state ballots. One such measure will be up for a vote in California this November. The proposition is called Proposition 22, and it is being hotly contested.
Proposition 22 is widely supported by companies such as Uber, Doordash, and Lyft. The proposition would ensure that drivers and delivery people for these companies remain part-time contractors rather than company employees. This January, California passed Assembly Bill 5 at the state level, which put into law an ‘ABC’ test to see if this class of workers are actually employees of companies. Due to AB-5, companies now need to meet three provisions in order to prove that these workers are contractors. AB-5 was seen as a win for labour advocates, as independent contractors are not entitled to the same benefits as employees, notably healthcare and sick pay.
The companies funding this ballot measure are arguing that AB-5 is making their current business models untenable. Uber released an analysis that claims that if Proposition 22 fails, 76% of its workers in California will be left out of work. Uber is also warning people that if Proposition 22 is not passed, the price of rides will go up anywhere from 25%-111%.
Uber economist Alison Stein has said: “Businesses simply won’t survive if they have zero control over what their hourly employees, whether full- or part-time, actually do.”
Uber, Lyft, and Doordash are pouring excessive amounts of money into the funding for this ballot campaign, spending more than $186 million on making sure this measure passes. They’re also trying to make sure that the proposition is very hard to undo, confiding it into the proposition’s text that it can only be overruled by a seven-eights supermajority of the state legislative body. This is both unusual and severe for a ballot measure.
“It’s a very extreme proposition in that regard,” said Stanford University law professor emeritus William Gould, a labor lawyer whose research focuses on the gig economy. “And I think it would be virtually impossible to ever reverse it other than through another ballot.”
This proposition is facing heavy criticism from high profile Democrats in the United States. Kamala Harris, US Senator of California and current running mate of Joe Biden has said, “I urge Californians to join me in standing with these essential workers by voting NO on Prop. 22.”
Former presidential candidate Bernie Sanders has also decried the ballot measure, writing on his Twitter that “I’m opposed to Prop. 22 because people working full time deserve decent wages and good benefits.”
Whether or not this proposition passes will have huge ramifications for the gig economy overall. If the measure fails, gig workers will now be entitled to sick pay, overtime pay, and unemployment insurance and these companies will inevitably downsize their workforce as a result. If the proposition passes, the current makeup of the gig economy will not change, and these workers will continue to be underpaid, mistreated and seen as disposable by the companies that they work for. It will be fascinating to see what Californians will decide, and it is something people should keep an eye on as the election approaches.
To learn more about the market impact of the US Election, visit this article.