Rideshare Company Rules: California’s Proposition 22 Wins

By SETH SANDRONSKY

In electoral politics, big money screams. Gig economy firms Lyft, Uber, DoorDash and Instacart spent over $200 million to sway public opinion to vote yes on California’s Proposition 22. The ballot measure creates a special state labor law to let such companies keep hiring drivers as independent contractors instead of employees.

There is a history here. California State Assemblywoman Lorena Gonzalez (D-San Diego) introduced Assembly Bill 5, which Democratic Gov. Gavin Newsom signed in 2019. AB 5 built on a state Supreme Court decision to enable more independent contractors to become company employees, who earn higher hourly pay and fringe benefits.

Steven Hill (Steven-Hill.com) is author of “Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers” and former director of the Center for Humane Technology. “Many of these Uber and Lyft drivers have not even been earning a legal minimum wage after drivers subtract their considerable driving expenses,” he told The Progressive Populist via email. “And Uber and Lyft have not provided any kind of safety net like health care, sick leave, injured worker or unemployment compensation.”

Tech companies and Gov. Newsom have been close since he was the Democratic mayor of San Francisco before succeeding Gov. Jerry Brown in the Golden State. On that note, Gov. Newsom, with strong labor union and tech company support, did not take a position on Prop. 22. Organized labor opposed Prop. 22. It spent about 10% of what the Prop. 22 interests did.

Gov. Newsom’s stance puts into question how he can appease both union labor and such tech companies. This conflict mirrors that between the corporate Democrats and the more progressive wing of the party.

Progressive Democrats supported Sen. Bernie Sanders in his 2016 and 2020 presidential campaigns that sought Medicare for All, the Green New Deal, a higher minimum hourly wage and free public higher education. In opposition to those popular policies were and are the Democratic National Committee, House Speaker Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-N.Y.). The corporate Democrats prefer policies such as the coronavirus relief packages that build the power of the employer class over the working majority.

Organized labor opposes business models that rely upon independent contractors. Gig economy companies rely upon that arrangement. Independent contractors file a 1099 Internal Revenue Service tax form, and pay the employer and employee share of Social Security, with no company benefits. Company employees file W2 tax forms with the IRS.

In a University of California Berkeley Institute of Governmental Studies poll before the Nov. 3 general election, Democrats lined up against Prop. 22, with 42% voting no, 31% voting yes and 27% undecided. Republicans were backing Prop. 22 by a 53% to 29% margin, according to the UC Berkeley IGS poll. Independent voters polled at 41% yes, 33% no and 26% undecided on Prop. 22.

Meanwhile, labor-union households were against Prop. 22 by 12 points. Union-free households supported the measure by seven points. In the San Francisco Bay Area, 31% of likely voters surveyed on Prop. 22 indicated approval, 42% disapproved and 27% were undecided.

The UC Berkeley IGS poll, administered in English and Spanish September 9-15, 2020, contacted 7,198 registered voters in California via email. “It is likely that findings based on the overall sample of registered voters or from the sample of likely voters in the November general election are subject to a sampling error of approximately +/-2 percentage points at the 95% confidence level,” according to the survey.

California is a blue state, but the big money of the gig economy companies triumphed in the voters’ passage of Prop. 22. There will be national implications.

Seth Sandronsky lives and works in Sacramento. He is a journalist and member of the Pacific Media Workers Guild. Email sethsandronsky@gmail.com.

From The Progressive Populist, December 1, 2020

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