Gig Worker Classification

Prop 22 allows app-based rideshare and delivery companies to hire drivers as independent contractors, and provides them some additional benefits. It effectively amends Assembly Bill 5, a 2019 California law that established conditions for classifying workers as independent contractors, which classifies rideshare and delivery drivers as employees.

AB5 has targeted companies like Uber, Lyft, Instacart, and DoorDash from the beginning, but it had to be written in a more general way to pass constitutional muster. While AB5 arbitrarily exempted high-earning worker types like doctors, lawyers, accountants, and real estate agents from the beginning, it has affected many other occupations that rely on independent contractor status. A subsequent amendment carved out musicians, who under AB5 would have to be designated as employees of each band they gigged with (as someone who’s played hundreds of gigs with dozens of bands, this was a ludicrous requirement). Freelance journalists and photographers lost work, but the author of AB5, Assemblymember Lorena Gonzalez, didn’t give them the musician treatment, saying they “were never good jobs” (she didn’t say what made them worse than musician gigs); in March, a federal judge refused to exempt them.

Job categories that have lobbied hard enough, and come across as sufficiently sympathetic, have gotten exemptions, while others have become casualties to the objective of punishing Uber, Lyft, Instacart, and DoorDash. I generally oppose ballot measures that could be decided by the legislature, but AB5 is a mockery of rule of law that justifies overruling action.

As for the substance, Prop 22 creates economic opportunity for many who can’t work the full-time employee schedule established for early-20th-century factories. For a glimpse of what would happen without it, we can consider the cannabis-delivery business, which reclassified its drivers in 2018. Drivers now follow a regular schedule, in some companies capped at 30 hours per week to avoid triggering health insurance, in others capped at 40 hours per week to avoid overtime pay. In one company, half of the drivers quit because they preferred being independent contractors, pursuing other gig work (i.e., Uber/Lyft/Instacart/DoorDash) instead.

My dad is among the many rideshare drivers who works a mix of longer shifts and ad hoc drives, often to and from errands or visits to friends or family. He lives in San Jose, but on many occasions his drives would take him up to San Francisco, and the two of us would have an impromptu meal. Unlike caregivers with unpredictable availability, he could get by with preset shifts, but he’d lose the spontaneity that’s incompatible with employee status---no business can offer its employees unlimited ad hoc work, regardless of customer demand and supply of other workers. And by allowing drivers to choose in real time between Uber and Lyft, as my dad does, independent contractor status fights the wage- and employment-reducing force of monopsony.

California drivers overwhelmingly want to remain contractors. The latest poll finds that they support Prop 22 by 36 points and prefer gig work to employee status by 57 points. This follows a July poll, which found that they prefer to be classified as independent contractors to employees by 70 points, and a May poll that found drivers support Prop 22 by 52 points. This isn’t surprising, given half drive less than 40 hours per week and have other sources of income.

The flexibility of gig work also benefits customers, especially people without personal vehicles or who want to avoid in-person shopping. I’ve lived in a city twice without a car, once pre-Uber and once post-Uber. That city (San Francisco) probably has the best public transit in the state, but it still took an hour to get just a couple miles, especially late at night, and just as long to hail a cab. In my second SF stretch, bikeshare and living in a more walkable area reduced my need for Uber and Lyft, but on the few occasions I used it, the alternatives were far less convenient---sometimes impossible, like going to the airport.

Today, my partner and I live in a suburb that’s probably a bit denser than the California average, but getting to a store still requires biking on 50mph-speed-limit roads with no protected bike lane---transit is effectively nonexistent. When we moved, Uber and Lyft were our only ways to get around safely, and with the pandemic we finally bought a car after years without one. We also use Instacart to get groceries safely in the pandemic.

Our experience is typical of Californians. I applaud people who can live without a car or rideshare in dense urban areas, but for most, the choices are (a) car ownership, (b) unsafe biking or time-consuming transit, or (c) Uber and Lyft. People with means to avoid (b) will buy vehicles, clogging up roads and requiring huge swaths of land for vehicle storage, if Uber and Lyft become inaccessible or even less affordable and convenient. Any additional costs borne by Instacart and Doordash will translate directly to more people buying groceries or eating in restaurants amid a pandemic, threatening public health---and of course, to more driving and its associated pollution and carbon emissions. These services provide new freedom to people who can’t drive at all, like seniors and people with disabilities, and save lives through multiple channels.

I’ve heard concerns on good-governance grounds that Prop 22 requires seven-eighths of the legislature to amend. This isn’t surprising: 77 percent of the Assembly and 73 percent of the Senate voted for AB5, largely on a party-line vote. Democrats may gain seats in November, so any threshold short of three-fourths could make it dead on arrival. If something goes so wrong with Prop 22 (and I’m not sure what that would be), it could also be revised by ballot measure; three of the 12 measures on this year’s state ballot intend to revise prior ballot measures. Fundamentally, I’m not convinced this is a major issue because I don’t believe the legislature should be banning gig work at all, just as I don’t think local governments should be banning duplexes at all, and supported a state bill that would prevent them from doing so. Good governance isn’t just about empowering the legislature, it’s about making it hard for them to do bad things; that’s why we have a constitution, it’s why state law sometimes supersedes local law, and it’s why ballot measures can have reasonable safeguards to ensure the will of the people is adhered to.

Prop 22 redresses an unjust, corrupt law, preserving the flexibility of modern economic opportunities and expanding them with benefits like earnings minimums and a health insurance stipend. According to the nonpartisan Legislative Analyst Office, it will increase total driver earnings and tax revenue. While we also need better transit and safer bicycle infrastructure, and to allow denser, more walkable cities, Prop 22 will also reduce personal vehicle ownership and its many ills. Vote yes.