On Tuesday, gig economy companies got their way, when Proposition 22, a ballot initiative that they bankrolled, was approved by
So how will Proposition 22 function in practice for ride-hailing drivers and delivery workers? What are the consequences of carving out a new category of work to fit the form of the gig economy? What will the ripple effects be across the state and country? There's still a lot to figure out.
Once Proposition 22 goes into effect in mid-December, the law will require that companies provide an hourly wage for time spent on rides equal to 120% of either the local or a statewide minimum wage. The measure grants workers driving at least 15 hours a week a stipend for health insurance coverage, and a larger one for those putting in 25 hours a week. Drivers will also have access to occupational accident insurance to cover on-the-job injuries, which would include coverage for medical expenses and disability benefits.
Also ruled out is the threat by the
Gig companies heralded the passage with exuberance. "At a broad scale, this is a win-win-win for drivers, the
Conversely, labor experts and opponents of the measure said its passage was a huge loss for workers. Had the ballot measure failed,
"Instead of paying their drivers, gig corporations forged a deceptive $204-million campaign to change the rules for themselves and provide their workers with less than our state laws require," Assemblywoman Lorena Gonzalez (D-
The companies had presented the slate of benefits in Proposition 22 as a concession, a weaker version of typical employment benefits. A closer examination reveals some potential pitfalls.
The minimum wage protection — as outlined in the text of the proposition — narrowly applies to "engaged time," meaning the time a driver is on a trip with a passenger or en route to pick up a passenger. Some studies have estimated drivers could be legally allowed to make as little as $5.64 per hour under this stipulation.
"Drivers will continue to be paid less than the minimum wage if all their work time is counted; and they will be reimbursed for less than half of their business expenses. That's a big price to pay," UC Berkeley labor economist Michael Reich said in an email.
In the future, workers will no longer be able to seek restitution for wage theft against the companies with meaningful results since they would largely be solved through private arbitration, said Rey Fuentes, a researcher for the advocacy group
"There will be very little sunshine for the public to understand how [the companies] are complying or not complying with the law," Fuentes said.
Fuentes also said language in the measure would erode the power of local governments to secure additional worker protections, such as targeted minimum wage protections for ride-hailing drivers, as has been done in cities such as
Environmental advocates worry the independent contractor status of workers means companies will be able to skirt responsibility for environmental regulations, passing the burden to drivers instead. The
Gig companies that bankrolled Proposition 22 with a record-setting $204 million didn't provide much clarity to workers about exactly how their roles may shift or what new features they'll see once the law takes effect.
Instacart said in an email to shoppers it would "conduct a roadshow" and share more information in the next few weeks.
In a blog post
"This wasn't some measure to dupe people and give fake benefits. We are trying to execute on them and should be good to go on Day One,"
For customers, the companies have indicated much will remain the same.
"Passage of Prop. 22 means more than a million Californians will be able to keep driving with
If the companies treat these benefits as a floor, rather than a ceiling, it's possible it could raise the cost of business — which could be passed along to consumers in the form of price increases, said David McCuan, a political science professor at
McCuan and William Gould, a labor lawyer and professor emeritus at
"It's a bit ironic given the fact that the proposition system was designed to help the little guy make their voice heard with deals being cut between big trusts and the Legislature," Gould said.
The rest of the country watched
In
"Those of us who care about this set of workers have to find new paths," Lander said.
Steve Smith , spokesperson for the
Nicole Moore, a ride-hailing driver and an organizer at
We're not going to turn our backs on each other. We're absolutely moving forward," she said.
Many drivers supported the measure and were relieved to hear voters had approved it.
"I've worked as an employee for many companies in the past, and I didn't like the idea of having someone tell me what I would have to be responsible for, or that I should do things in a certain way," said James King, a
King said he wished companies had communicated more about what would happen next.
"We're still in limbo as to what is really gonna happen. It's nice that it passed, but we still have no details," King said.
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