Dave Lee in San Francisco
Californians will not only cast their ballot for president on Tuesday but will also be asked to make a choice pivotal to the future of the so-called gig economy.
Proposition 22 seeks to exempt these app-based groups from California employment law, and is backed by more than $200m from a coaltion of Uber, Lyft, Doordash and others, making it by far the most expensive ballot measure race in the state’s history.
Passing the Prop 22 vote will mean the companies will be allowed to continue classifying their drivers as independent contractors rather than employees, avoiding benefits such as minimum wage, sick pay and healthcare.
Prop 22 would instead put in place a limited number of benefits based on how many hours have been worked: a driver putting in more than 15 hours a week driving for Uber would start to build up a stipend that could be used to pay for healthcare coverage, for example, or paid time off.
They would receive an “earnings guarantee” of 120 per cent the local minimum hourly wage, though how that is calculated is one of the many bones of contention in this debate.
Uber doesn’t count the time during which a driver is waiting to be matched with a rider, which can amount to around 33 per cent every hour, according to one Uber-disputed study.
Opponents of Prop 22 say gig economy companies have been abusing their drivers for the past decade, building multibillion-dollar companies on the back of low income workers subsidising costs. If Prop 22 fails to pass, a recent court ruling would most likely mean Uber and Lyft are forced to make drivers employees by in about the new year. The companies say it would be impossible without reducing the number of drivers greatly, and significantly raising prices, particularly in rural areas.
Either way, California, the state in which the gig economy was invented, will determine the controversial sector’s future.
A win for “yes” will see Uber’s stock price soar — with the expectation that the company will go state-to-state, and possibly country-to-country, to set up similar agreements on its terms.
A “no” would give energy to the outspent labour movement to build its fight for employment classification nationwide, adding complication and expense to the gig business.
Polls suggest a tight race. The most recent, which polled about 5,000 Californians in October, suggested 46 per cent supported the measure. That’s short of the 50 per cent needed for it to pass. It was however a seven-point increase on the same poll a month earlier.