November 24, 2020
Uber and Lyft's Proposition 22 heads to the polls

Uber and Lyft’s Proposition 22 heads to the polls


Uber and Lyft drivers have long rallied to be classified as employees. 

James Martin/CNET

Only hours remain for California voters to weigh in at the polls on whether to pass Proposition 22, a ballot measure backed by Uber, Lyft and other gig economy companies. During the yearlong battle over the initiative, which aims to exempt the gig economy companies from classifying their drivers as employees, millions of dollars have been spent and all sorts of tricks have been pulled from the political playbook.

Proposition 22 is likely to have national implications as other states watch what happens in California. If the ballot measure passes, the companies can use the campaign as a blueprint for similar fights they’re waging in other states. If it doesn’t pass, they’ll need to rethink their business models.

If Prop 22 does not win, we will do our best to adjust,” Uber CEO Dara Khosrowshahi said during a Wall Street Journal conference two weeks ago. “We’re looking at all scenarios.”

Polling shows a close race for the ballot measure, with 46% of voters backing the proposition and 42% opposed. The initiative needs 50% of the vote to win.

Uber, Lyft, DoorDash, Instacart and Postmates have contributed more than $205 million to the campaign, with a last minute $1 million more from Uber on Monday. The No on Proposition 22 campaign is backed with about $19 million from labor groups and unions. The initiative has become the most expensive ballot measure campaign in California history and one of the most expensive in US history, according to Ballotpedia.

At stake is whether the gig economy companies will be required to reclassify their workers as employees, as mandated by California law AB5. If classified as employees, workers will get labor benefits, such as health care, sick leave and minimum wage. But, the companies say, that will add tremendous costs to their businesses. 

Proposition 22 suggests creating an alternative where drivers remain independent contractors and will get a few more benefits, like an expense reimbursement and health care subsidy.

The No on Proposition 22 campaign says that’s not enough. It says drivers still might not make minimum wage and that the health care subsidy needs to be more substantial, especially during the coronavirus pandemic. When calculating paid time for workers, Proposition 22 only takes into account when they’re on a ride or delivery. It doesn’t add in when they’re waiting to be matched with a customer.

“Over the past years, Instacart has hired so many new shoppers that I often don’t get any orders,” Ginger Anne Farr, an Instacart shopper, told Human Rights Watch in a paper released Monday. “I would sit in my car waiting for an order to appear, without making any money.” 

Final flurry of activity

As Election Day has neared, both sides of the Proposition 22 campaign have been going all-in.

Uber, Lyft and the Yes campaign have blanketed social media and TV stations with ads, spending a total of $95 million, according to MarketWatch. The gig economy companies have also sent in-app messages and emails to riders and drivers asking for their support.

One email Uber sent customers on Monday reminded Californians that they can register to vote even on Election Day. It then asked customers to “join the NAACP and California Small Business Association in supporting drivers by voting yes on Prop 22.”

The California chapter of the NAACP has endorsed the Yes campaign. The endorsement came as a series of payments totaling $85,000 were made to a small consulting firm run by the chapter’s president. The national branch of the NAACP hasn’t endorsed the ballot measure.

The Yes campaign has said drivers prefer to remain independent contractors, often citing “independent studies.” Many of those studies have been paid for by the gig economy companies or the Yes campaign and others involved informal non-scientific polls. The authors of the studies say their findings are independent and objective.

When asked for comment, Lyft spokeswoman Julie Wood said, “Drivers have consistently said they want to remain independent, and we believe California voters will stand with them.” A spokesman for the Yes campaign reiterated this statement.

“Drivers are participating in text and phone banking events … to let voters know that by voting yes they can protect hundreds of thousands of jobs and the app-based services millions rely on,” he said.

For its part, the No campaign has been touting the support of several big-name Democrats, including presidential nominee Joe Biden and his running mate, California Sen. Kamala Harris. Also openly opposing Proposition 22 are Massachusetts Sen. Elizabeth Warren, Vermont Sen. Bernie Sanders, California Rep. Barbara Lee and New York Rep. Alexandria Ocasio-Cortez.

The No campaign has additionally coordinated several events across the state. Drivers opposing the initiative have held car caravan protests and dropped “No on Prop 22” banners throughout California’s cities. On Monday, California Assemblywoman Lorena Gonzalez, who authored AB5, worked with drivers to reach out to voters by text banking. The campaign said it had reached about 10 million voters as of Monday afternoon.

“Rideshare drivers have been building momentum throughout this No on Prop 22 campaign and they are in overdrive mode now, taking their campaign right up to the finish line,” said Mike Roth, a spokesman for the No campaign. “We’ll do what it takes to reach every voter we can with the truth.”

Uber, DoorDash and Postmates (which Uber acquired in July) didn’t respond to requests for comment. Instacart referred CNET to the Yes on Proposition 22 campaign.

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