California is proposing a law which would require companies like Uber, Lyft and other app based companies to keep their drivers as independent contractors. The proposition is a new development in the struggle between business and state government. The most recent bill is AB 5, which provides benefits such as sick leave and minimum wage for the drivers. It classifies the workers and employees not, as independent contractors. The companies have challenged the law in court. The argument used by the companies in court is that they are technology based companies instead of transportation companies. The most current case in May was delayed because companies threatened to shut down. So while AB 5 is bogged down in legal cases, a new proposition has arisen.
The goal of the newest legislative law, Proposition 22, is to allow workers to remain independent contractors and stop the workers from receiving benefits. It does provide a few benefits for drivers, but generally keeps them as independent contractors. By keeping drivers as independent it allows them to remain flexible with hours spent driving. Some of the drivers only do it part time and receiving minimum wage could be harmful.
The CEO of Uber, Dara Khosrowshahi, said in a New York Times opinion piece, “Unlike traditional jobs, drivers have total freedom to choose when and how they drive, so they can fit their work around their life, not the other way around. Anyone who’s been fired after having to miss a shift, or who’s been forced to choose between school and work, will tell you that this type of freedom has real value and simply does not exist with most traditional jobs.”
The companies have been launching an add campaign in order to raise public support for the proposition. The campaign is working. A recent study by the University of California Berkeley conveyed that 39% of the 5,900 voters supported the proposition and 36% did not. The number of the supporters is not at the level the companies want it to be at but there is still time before the election. The San Francisco Chronicle called the proposition “an imperfect balance between companies and workers.”
The groups opposing Proposition 22 preliminarily contain labor unions, which claim the workers are being exploited by the large companies.The workers receive less pay than they should be promised. Many drivers are immigrants and the ability to have legal protections like those currently offered in AB 5 would be beneficial, instead of remaining as independent contractors.. The labor unions fear that a victory for the proposition would set terrible consequences in motion.
Steven Smith, a spokesperson for California Labor federation and no on prop 22 campaign, said “All of the jobs that exist right now that are good middle-class jobs that are the backbone of the California economy could potentially be at risk and turn into these low wage, dead-end type gig jobs where people are earning sometimes less than minimum wage”
US news - Uber, Lyft Look to Kill California Law on App-Based Drivers
Los angeles Times - Californians not sold on treating Uber, Lyft drivers as independent contractors, new poll shows
The Californian - Employees or independent contractors? Prop 22 hopes to answer that question