In a win for worker freedom, drivers for Uber, Lyft, and delivery services such as Postmates and DoorDash can remain as independent contractors.
The voters of California have spoken and approved Proposition 22 (Prop 22), a ballot measure that allows tech platforms to continue to classify these workers as independent contractors rather than force them to hire these drivers as employees. The measure also provides labor and wage policies for app-based drivers and companies.
By a significant margin of more than 6.3 million votes in favor to 4.5 million opposed (58 percent to 42 percent), the ballot initiative passed.
Prop 22 was supported by ride-hailing and delivered services including Uber, Lyft, Postmates, DoorDash, and Instacart. It was opposed by unions and labor groups.
A spokesperson for Yes On 22, Geoff Vetter said:
Voters in California listened to drivers saying what they wanted. We’ve said multiple times that more than 70% of drivers wanted to remain independent contractors because it gives them a cut and the flexibility to choose when they want to work, where, and how long they want to work.
Uber’s chief executive, Dara Khosrowshahi, told drivers in a late-night email:
The future of independent work is more secure because so many drivers like you spoke up.
Drivers themselves cheered this outcome such as Jimmy Strano, a disabled rideshare driver in the Bay Area.
Prop 22 is the dawn of a new day for drivers. In a historic election, California drivers sent a clear message that we want to be independent, and that what’s best for us is a new approach that preserves our independence while providing new benefits.
Prop 22 arose after California’s legislature passed the job-killing law Assembly Bill 5 (AB5) last year, which forces companies to reclassify independent contractors as employees and provide them benefits and workplace protections. Through the law, the state codified a more stringent standard for companies to meet to classify workers as independent contractors. (Check out this PragerU. video: Free the Freelancers)
AB5 was known as the gig economy bill because supporters of the effort–largely unions–aimed to force gig economy workers to become employees, who can then be unionized. The costs of the reclassification would be so prohibitive (potentially 30% increase in labor costs) that companies would likely implement measures that reduce flexibility and opportunities for drivers while rising prices and reducing services for customers.
Independent contractors never asked to be reclassified as employees. In poll after poll, they indicate that they want to independent contractors because of the flexibility and autonomy. Perhaps they are juggling caregiving duties or managing their own health issues and cannot work a traditional schedule. Gig opportunities give them the freedom to work on their schedule and control over when, where, and how they work. They understand the tradeoffs of benefits but prioritize flexibility.
Another problem with AB5 is that it is a broad, one-size-fits-all law that unintentionally swept up hundreds of occupations. At least a hundred occupations from musicians to medical professionals to writers have been able to lobby for exemptions, but others remain under the thumb of this restrictive law. Individuals who simply want to work for themselves are left out in the cold. Read some of their Chasing Work stories here.
Legal challenges to AB5 persist, but this good news for gig independent contractors is a clear signal from the electorate to the legislature that Californians want flexibility and freedom, not command and control.
Even more, this sends a signal to other states and Washington, D.C., that assaults on independent contracting will not be tolerated. As Jan Krueger, a retired part-time Lyft driver from Rancho Cordova said:
This vote in one of the most progressive states in the country should send a strong signal to elected leaders all over the nation. Drivers want and need to be independent. We can protect independent work while also offering drivers new benefits. Prop 22 should serve as a model for other states and the federal government to follow.
Now, Prop 22 only applies to gig economy workers. Many more independent contractors need to be released from the grip of AB5. The fight to protect flexible work marches on.