Prop 22: Gig companies pay $110 million to confuse electorate into exempting them from AB5

August 12, 2020

While thousands of Californians struggle with underemployment during the COVID-19 crisis and many face the threat of eviction or homelessness, gig companies like Lyft, Uber and Instacart are burning a record $110 million on a last ditch effort to avoid paying workers their due.

Characterized by gig companies as “independent contractors,” gig workers get a raw deal in today’s economy. A study by Uber suggests that drivers are not compensated for about half their time in the application, which they spend “idle,” often waiting for a job worth accepting. Employees are entitled to be paid for their “idle” time. Similarly, gig companies have been accused of stealing their workers’ tips, or facilitating “tip baiting,” where tips get promised but then taken back by the customer. Robbed of compensation during these tough times, many gig workers are struggling to get by.

Gig companies excuse their mistreatment of workers by claiming app-based jobs are new and exceptional, and therefore the companies need not comply with California labor law. But drivers, delivery workers and elected officials have made it clear that they aren’t fooled.

“The handwriting is on the wall”

For years, gig workers have collectively organized and fought back to ensure hard-won worker protections in California are extended to them. From the curbsides of LAX to subreddits and WhatsApp, workers meet to discuss frustrating experiences and exchange tips and tricks for navigating challenges. When one company, Shipt, was reported to quash and punish workers for discussing the platform, those workers simply shifted to closed Facebook groups and other more private forums. These groups are showing they cannot be stopped, and they are gaining momentum. Groups like Rideshare Drivers United and Gig Workers Collective have organized work stoppages and rallied for increased public pressure against these companies’ poor treatment.

In court, thousands of drivers have challenged stolen wages by filing class action lawsuits and hundreds of individual arbitrations. Even state and city governments have filed suit over these companies’ refusal to pay and protect these workers as employees: San Diego’s city attorney sued Instacart in September 2019, and California’s attorney general was joined by the city attorneys for Los Angeles, San Diego, and San Francisco in suing Lyft and Uber in May of 2020. In a preliminary ruling in the Instacart case, a judge wryly affirmed that the gig companies have lost the battle over the legal status of their workers:

“The Supreme Court announced Dynamex two years ago. The decision gave rise to a long debate in the legal press and in the legislature. The legislature passed AB 5 last fall. The governor signed it. To put it in the vernacular, the handwriting is on the wall.”

During that “long debate” in the wake of Dynamex, the California Supreme Court ruling that made it more difficult for companies to classify workers as independent contractors, Bloomberg reports that Lyft and Uber spent months fruitlessly hounding state government officials and labor unions in a desperate attempt to save their bottom line. Despite their efforts, the legislation codifying Dynamex, “AB5,” ultimately passed without any special exemptions for these companies.

So did Lyft and Uber reclassify their workers to comply with AB5?

“We’re going to spend what it takes to win”

Unfortunately, they’ve chosen to double down. Enriched by years of underpaying drivers and couriers, Lyft and Uber have been joined by other gig companies like Instacart in proudly burning $110 million—not on protective equipment during a pandemic, not on hazard pay for the drivers and shoppers putting their lives on the line, but to rewrite the law in their favor. Their hired lobbyist, Brandon Castillo, named a top-100 political influencer in California by Capitol Weekly, even bragged about it:

“We’re going to spend what it takes to win. It’s been widely reported that three of the companies already shifted $90 million, but we’re still in the early phases. The bottom line is: We’re committed to passing this.”

With a prop so blatantly in opposition to what gig workers and government officials have spent years calling for, it’s no surprise that these companies have resorted to fear mongering and propagating misinformation in their campaign for Prop 22.

Decreased benefits, increased misinformation

Every single benefit gig companies and their lobbyists ascribe to Prop 22 is misleading. For example, they say Prop 22 would give workers mileage pay of 30 cents per mile. But drivers would actually get more mileage pay if Prop 22 didn’t pass (57 ½ cents per mile). Similarly, they tout a guaranteed pay of 120% of minimum wage per hour, but they gloss over the fact that they’d pay $0 for all the time gig workers spend logged into the apps waiting for jobs to come (which, again, can make up as much as half of all logged-in time)—time that would get paid under the status quo, if Prop 22 didn’t pass.

On top of all these so-called benefits that would actually be losses, gig companies repeatedly claim that drivers and shoppers would be forced to give up their flexible hours and even lose their jobs if Prop 22 doesn’t pass. In reality, nothing about California’s current laws force companies like Lyft, Uber or Instacart to take away gig workers’ flexibility. If Prop 22 fails, these companies would be “legally entitled to continue allowing drivers to make their own schedule,” says the New York Times. It wouldn’t even benefit their bottom line to take away workers’ flexible hours, according to UC Hastings law professor Veena Dubal.

While it’s certainly shameful to scare workers with the threat of losing their jobs during a pandemic, it’s also pretty revealing. Companies that normally compete with each other as rivals probably wouldn’t band together and spend $110 million on a proposition unless they feared having to pay out a much bigger sum. This November, tell these gig companies that defying Californians is a losing bet: vote no on Prop 22, and tell your friends and family to do the same.