Starting in January, California law forced many “independent contractors” to be employees. Therefore, firms must follow California labor law, meaning that they must pay and deduct payroll taxes, ensure minimum wage and overtime compliance, contribute to workers’ compensation and unemployment insurance and comply with family/medical leave and meal break policies, among other things.
Postmates, Uber, Doordash, Instacart & Lyft (hereafter PUDIL) ignored the law, known as AB5, got sued and mostly lost in court. Simultaneously, PUDIL bankrolled Proposition 22, which would exempt them from AB5 as well as grant their drivers similar benefits that being an employee brings.
Should you support Prop 22? The swing voter understands there are tradeoffs from imposing lots of labor regulations, but is skeptical that PUDIL has workers’ best interest at heart. Furthermore, they detest cocky tech companies that flout the law. What follow are common concerns from swing voters and my attempt to allay them:
“PUDIL should work to rescind AB5 for everyone rather than carve out a selfish exception.” PUDIL workers were the primary target of AB5. Thus, the legislature is unlikely to agree with PUDIL and rescind their own bill. PUDIL could still have pushed for a referendum on AB5, but they didn’t. I don’t know why. Luckily, Prop 22 is essentially a repeal of AB5. Don’t let the perfect (rescinding AB5) be the enemy of the good (Prop 22).
“Those greedy corporations spent ~$180 million to avoid California labor law!” True, this is the most money ever spent on a proposition, but PUDIL views AB5 as an existential threat. Trust that all five companies are not lying to us about how harmful AB5 is to their business.
“PUDIL exploits their workers – if they can’t operate profitably and legally in California, then I’d rather see them go extinct.” Your definition of exploitation likely differs from the worker you view as exploited. Still, would you prefer the previous taxi industry, where drivers earned more money than PUDIL workers but had to dedicate their entire life to it? And where the workers were often stuck driving a taxi because they had to pay off their $250,000 taxi medallion? And where customers couldn’t rely on taxis for quick service? Or, can you appreciate PUDIL providing employment options, even if the options aren’t personally attractive?
“I know workers like flexibility and autonomy, but they also like more money and benefits.” Proposition 22 grants them some of these, including increased workplace safety standards, worker’s comp, medical subsidies and earnings floors for the times they are actively driving passengers. Whether they are stronger or weaker than workers would receive under AB5 is hard to say because we don’t know how PUDIL will react if subject to AB5.
“Prop 22 benefits aren’t enough – I want exactly what AB5 provides for workers!” OK, but over 1 million workers did at least some work for PUDIL in 2019, and PUDIL estimates that AB5 compliance would reduce their workforce to ~100,000. There is a tradeoff.
To summarize, voting no on 22 will likely shrink the part-time workforce drastically (assuming PUDIL loses its AB5 court battle). Instead, a full-time workforce emerges. Consumers will experience longer wait times, especially in sparsely populated areas. PUDIL management and stockholders will lose as well, and although some may applaud this, I would hope voters won’t let corporate disgust crowd out gig workforce sympathy. Therefore, try voting yes on 22, which will cause PUDIL to expand worker benefits and continue paying workers mostly for outputs (trips, deliveries) rather than hours worked, crucial to maintaining their business model. AB5 is not well-suited to drivers in the gig economy, and Prop22 thankfully eviscerates it.
