Sacramento, CA (WorkersCompensation.com) – Looks like Uber and Lyft drivers in California will remain independent contractors. At least, that’s what the electorate decided.
Proposition 22 was approved by a margin of 58.4 percent to 41.6 percent. The ballot measure would exempt drivers for app-based transportation and delivery companies from being classified as employees, as had been mandated under the legislation AB 5.
Legislation approved in 2019, AB 5 would have reclassified so called ‘gig’ workers as employees, rather than independent contractors. The employees would be entitled to benefits such as workers’ compensation, as well as minimum wage protections and unemployment insurance.
Uber, Lyft, DoorDash and other companies spent a small fortune urging passage of Proposition. They said forcing them to reclassify drivers would have increased their costs, which they likely would have had to pass on to consumers. Uber had estimated in a blog post that riders would pay between 25 percent and 111 percent more in parts of California.
Proposition 22 applies specifically to app-based drivers, defined as workers who either provide delivery services on an on-demand basis through a business’s online-enabled application or platform, or use a personal vehicle to provide prearranged transportation services for compensation via a business’s online-enabled application or platform.
Proponents of the measure point to certain policies included for app-based drivers, including
- Requiring the 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
- Requiring 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)
- Requiring 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
The measure also includes consumer safety changes such as more driver background checks and zero tolerance for drug or alcohol violations.
Opponents say Proposition 22 does not go far enough to protect workers. “This measure is another brazen attempt by some of the richest corporations in California to avoid playing by the same rules as all other law-abiding companies in our state,” said Art Pulaski, chief officer of the California Labor Federation. “These CEOs spin this ballot measure as a benefit to workers, but their corporate Hail Mary falls short. It steals protections and pay their employees are entitled to under current law.”
In August, the Superior Court of San Francisco ruled the rideshare companies violated AB 5. The state’s attorney generally said at the time that Uber and Lyft needed to “put a stop to unlawful misclassification of their drivers” as the litigation continued. The companies had threated to suspend operations unless the court’s ruling was postponed. Last month the California First District Court of Appeal upheld the lower court’s decision and required the companies to implement the changes within 30 days – unless Proposition 22 was approved.