If the ballot measure Proposition 22 passes in California, tech companies will have undermined years of work towards securing fair compensation for gig workers, and—with a record $206 million poured into the effort—will send a resounding message that laws are written solely by those with the deepest pockets.
The ballot measure—created by Uber, Lyft, and DoorDash, and with support from Instacart and Postmates (which Uber is acquiring)—attempts to roll back a hard-fought labor law which court rulings have held to mean that gig companies must classify their workers as employees rather than contractors in California. Employee classification would, these companies argue, eliminate workers’ ability to schedule their own hours; they also claim employment overhead costs would force them to either shut down in the state or drastically cut the number of drivers on payroll. Regulators and lawmakers argue that these workers are employees like everyone else, and the companies are manipulating the idea of “the future of work” to make everybody else cover their unpaid unemployment bills.
Their war chest (the largest ever sum for California ballot measure campaign) has bought gig companies Republican political strategists and big tobacco PR firms. It’s paid for them to push their messaging via liberal-styled voter guides, and incessant email blasts about preserving worker flexibility. It has even bought pro-Prop 22 delivery bags, which their own workers have been forced to use in customer orders.
Success for the companies’ “Yes on Prop 22” campaign looks to be within reach: A Berkeley poll last week found that 46% of early voters had voted yes on 22, compared to 42% who’d voted no. If you doubt the efficacy of these sorts of expensive PR pushes, the nonprofit California paper Capitol Weekly found that 40% of people who’d voted yes on 22 believed that they were voting to ensure drivers make a decent wage.
As Californians head to the polls for the final day of voting, it’s important the remaining voters not continue to be misled. Almost all of the Yes on Prop 22 campaign’s claims defy independent research and obscure convenient loopholes. Here we’ll take a last-minute dive into the Yes on Prop 22 campaign and show why many of its claims are spurious or outright false.
Yes on Prop 22's biggest scam is its promise that drivers will make 120% of minimum wage. They won’t.
Prop 22 pegs meager benefits—an earnings floor, healthcare subsidies, some expense reimbursement, and accident insurance—to “engaged time,” i.e. time spent picking up and dropping off customers. This means that Uber, Lyft, DoorDash, and the rest automatically clock workers in and out throughout the day while they’re waiting to begin a new trip (idling) or en route to a new customer (deadheading). Researchers from the New School and Berkeley estimate that this could cut up to 35 percent out of Uber and Lyft drivers’ hours.
So when Yes on Prop 22 promises that drivers would make 120% of minimum wage, that bears no relationship to hourly pay: Prop 22 would, instead, likely ensure that gig workers make less, possibly only a minimum of $5.64 per hour, according to one study from the UCLA Labor Center.
Under Prop 22, workers get no overtime pay, no family leave, no sick leave, no unemployment insurance, no right to collective bargaining, no protection from retaliation, and no access to restrooms. All of these protections should already be afforded to drivers under recent California law Assembly Bill 5 (AB 5).
The “preserving flexibility” argument only works if most people using their platforms are part-timers, and both companies have said this is the case. According to Uber, that’s 81% in California, and according to Lyft, that’s 86% nationwide. But independent researchers have found exactly the opposite to be true, saying that the meager pay actually makes the job very inflexible.
In a 2018 report exploring the viability of wage minimums for New York drivers, Michael Reich and James Parrot wrote that for the over 60% of New York City drivers who work full-time to make ends meet, “work hours are not flexible.” A UCLA Berkeley Labor Center survey of Los Angeles drivers found that, as of 2018, two-thirds of drivers rely on ridesharing work as their main source of income, half don’t have any other job, three in five drive more than five days per week, and one in five rely on public assistance such as food stamps.
Uber and Lyft know, however, that flexibility is what lures workers onto their platforms, and they know that they can leverage it to muscle people into working more “flexible” hours for less money. And that money has been harder to make as, researchers claim, the companies have allowed drivers to flood the platform in order to reduce wait times.
“Flexibility” is what attracted Oakland-based social justice minister Cherri Murphy to Lyft in 2017, while she was finishing her doctorate at divinity school.
“In 2017, Lyft seemed like a godsend,” Murphy said over the phone. “They had advertised a job with a feature of ‘flexibility’ that allowed one to make money while giving me a rental. I was in desperate need of that flexibility, and they were going to give me a car to make money, so it seemed like a great deal.”
On occasion, Lyft gives out bonuses like earnings guarantees, where Lyft will make up the difference if drivers don’t make a certain amount of money after giving a number of rides. Over the past three years, Murphy said, while the bonus amounts have decreased, the benchmark for minimum weekly minimum rides skyrocketed from 70 to 150, making it “increasingly difficult to sustain a living.” (Lyft told Gizmodo that they could not immediately confirm or deny this claim, since earnings guarantees and other bonuses vary by area.)
“That good deal just never came,” Murphy said.
Drivers in California protested the “flexibility” trap last year, telling Recode that Uber and Lyft had deceived them into signing petitions asking them to help “fight for driver flexibility and independence.” They didn’t realize that the petitions, sent to lawmakers, were aimed to protest AB 5, nor were they made aware of what AB 5 actually does.
And, though it may be obvious, nothing prevents Uber or Lyft from employing drivers who are allowed to make their own working hours. The flexibility or lack thereof for ridesharing is entirely within their control.
If you live in California, you may have received the “Latino Voter Guide,” the “Budget Watchdogs Newsletter,” the “Election Digest,” the “Cops Voter Guide,” the “California Voter Guide,” voter guides from a “Democratic Club” or the “Committee to Protect Political Rights of Minorities” or the “Council of Concerned Woman Voters.” All of these are on Yes on Prop 22’s payroll.
Then there’s the Yes on Prop 22-funded “Feel the Bern, Progressive Voter Guide,” which ran with portraits of Joe Biden and Kamala Harris (both of whom have strongly opposed Prop 22) above a series of stances on ballot measures, including Yes on Prop 22. Bernie Sanders called them out.
While Yes on Prop 22 gives the impression of Democratic support, it is clearly aligned with GOP interests—going so far as to make a $2 million contribution to the California Republican Party.
Last month, a group of Uber drivers sued the company for bombarding them with aggressive in-app notifications at work and incessant messages during off-hours with compulsory surveys and video testimonial prompts that reasonably lead them to fear retaliation if they don’t submit an enthusiastic response. (If Prop 22 passes, they would have no protection from arbitrary retaliation.) Evidence includes Prop 22 slides with wage calculations and expense reimbursements that are substantially less than what they should be getting as legally established employees. They claim that Uber also threatened them with warnings that “only 20-30% of current drivers” would be able to continue using the platform if Prop 22 fails.
Uber’s lawyers referred Gizmodo to their opposition brief, in which they call the lawsuit a “meritless political stunt” and accused the drivers, with a request for a temporary restraining order, of attempting to “silence speech they dislike.” They called criticism of Uber’s allegedly “misleading statements” “completely baseless.”
In the same opposition brief, Uber claimed that the “costs and other challenges” of switching to an employment model could cause “the number of drivers who could use the app to fall from 209,000 to 51,000.” By Uber’s estimate, prices would increase by an astonishing 20-120% (a meaninglessly broad range) and that that demand would “plummet” by 20-60%.
Lyft similarly directed Gizmodo to a brief report by the corporate consulting firm Berkeley Research Group, which makes the even more ambitious claim that classifying drivers as employees will “reduce the number of app-based drivers that the companies will need to satisfy consumer demand by 80-90 percent.” The three-page double-spaced study barely has a methodology section, only a note mentioning that the group was given access to proprietary data from rideshare companies.
Independent researchers present a far less dire outcome. In an October study, professor Michael Reich estimated that if Prop 22 fails, and drivers’ compensation increased by 30%, prices would only need to rise by 5-10%, while demand would fall by 1-2%. Meanwhile, Uber could still make more while reducing its own commission rates. This “may seem counterintuitive,” Reich wrote, but the combination of increased prices and relatively stable number of rides would easily cover the difference. Reich said via email that an upcoming study will show that demand growth has slowed in New York City after the city implemented the wage standard in late 2018, but it was equivalent to Chicago, which has not made that change.
In other words, the companies wouldn’t necessarily suffer catastrophic financial ruin as a direct result of Prop 22. They might choose to leave, but that’s their decision. As Reich said, Uber and Lyft “nonetheless have adapted to a more regulated business model” after New York City implemented its minimum wage. “And both companies are doing well there (pre-covid),” Reich added.
The idea of separating out gig workers into a “third class” of not-quite-contractors and definitely-not-employees, as Yes on Prop 22 would like, dangerously points us towards a future in which millions of Americans could lose existing employment benefits. “If you do not get the same benefits and the same basic protections simply because you’re hired through an app, who can be hired through an app next?,” California Assemblywoman Lorena Gonzalez, the sponsor of AB 5, said in a phone call. “Pretty soon these jobs that were once middle-class jobs can be deteriorated to a point where we have no social safety net because not enough people are paying into it.”
And of course, it sets the precedent that if companies don’t like a law, they can simply buy a new one.