Proposition 22, the California ballot measure backed by food delivery companies like Postmates, Instacart, and Doordash, was approved by voters during the November 3 election. Its win means that food delivery and ride-hailing companies, unlike most other business sectors in the state, will not have to provide its drivers with standard employee protections like minimum wage for hours worked, health care benefits, or unemployment insurance.
According to the election results available on November 4, 58 percent of California’s over 11 million voters supported Prop 22, a margin well in excess of the 50-plus-one percent it needed to prevail. Its success will allow companies that use drivers as its workforce — as Uber does both with Uber Eats and its Uber ride hail offering, for example — will not have to adhere to Assembly Bill 5, a law that went into effect on January 1, 2020 that says that regular workers whose duties are part of the usual course of a company’s business must be classified as employees, not independent contractors.
As delivery and ride-hailing apps’ businesses are indeed built on the labor of those workers, AB5 would have required a massive overhaul of how the companies do business in California, requiring them to operate as other companies are legally required to do by providing sick pay, paying for overtime work, and making payments into the state’s unemployment system and disability insurance fund.
Instead, these companies filed a ballot measure intended to ensure that AB5 does not apply to them. In the end, the combined companies spent over $224 million to ensure that they needn’t comply with the law, making it the most expensive ballot measure in California history. By comparison, the workers groups that opposed Prop 22 raised about $20 million.
“The obscene amount of money these multibillion-dollar corporations spent misleading the public doesn’t absolve them of their duty to pay drivers a living wage,” Art Pulaski, spokesperson for the California Labor Federation, a Prop 22 opponent, said via statement. “The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they’re hurt at work.”
Via a statement, Geoff Vetter, a spokesman for Yes on 22, celebrated the campaign’s victory. “California has spoken, and millions of voters joined their voices with the hundreds of thousands of drivers who want independence plus benefits,” Vetter said. “With the passage of Prop. 22, app-based rideshare and delivery drivers across the state will be able to maintain their independence, plus have access to historic new benefits, like a minimum earnings guarantee and health care.”
However, while Proposition 22 will indeed require companies to pay drivers an hourly wage equal to 120 percent of either a local or a statewide minimum wage, it applies only to the time a driver spends while actively picking up and ferrying food or passengers. It will not cover time in between trips, which means that it’s likely that most drivers will make far less than state or local minimum wages, nor will they receive a guaranteed rate of pay.
Prop 22’s triumph also suggests that other business sectors across the state will also turn to voters to resolve labor issues, political science professor David McCuan of Sonoma State University told KPIX.
“What Prop. 22 does is it raises the tide of all ballot measures,” McCuan says. “It sets records that are just going to be blown past the next time. … It makes the parallel route of direct democracy a playground that will be measured in the billions in a few (election) cycles.”