Will Prop 22 Get Full Support from All AB 5 Critics?

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Many industries and individual workers have a problem with Assembly Bill 5, California’s high-profile labor law that intends to classify many workers as employees with full benefits afforded by California law. But will these individuals and groups come to the aid of Proposition 22 on the November ballot, which takes Uber, Lyft and other app-driver based companies out from under the AB 5 restrictions? 

There are two ways for freelance writers, small businesses, publishers, newspaper delivery people and others who have objections with AB 5 could look at the Proposition 22 effort. One is to offer full-throated support for the measure hoping its success will weaken the foundation of AB 5 for further changes. The other is to ignore the battle because as much as they dislike AB 5, they were not included in the rollback. 

Indeed, the AB 5 castle has been taking arrows on all sides–from a successful lawsuit brought early by truckers who wanted to remain independent contractors, to demands for changes to the law from freelance writers and musicians, to a new bill introduced by Assembywoman Blanca Rubio to extend the one-year delay in implementing AB 5 for newspaper carriers. In fact, from the beginning of the year over 30 bills have been introduced to amend AB 5. That indicates there are problems with the legislation for many workers and businesses. 

The focus on AB 5 resistance has naturally fallen on Uber and Lyft because they are battling the state of California in court over the status of their workers and the fact that Uber and Lyft along with other app-driver gig companies are funding Proposition 22 with around $100 million to take the companies outside of the AB 5 law. 

This week, Uber and Lyft lost Round One in a battle with California Attorney General Xavier Becerra who went to court to force the companies to immediately treat the drivers as employees and offer the workers full employee benefits as ascribed by California law. While a Superior Court judge agreed strongly with the state’s position, Uber and Lyft will appeal. Uber has also suggested that it might need to close down its operations until at least November to comply with the court ruling.

The companies want to drag the court proceedings past election day in hopes of making the court issue moot if the voters endorse Proposition 22. The ballot measure would declare app-drivers independent contractors but also set up certain benefits for the drivers, but not the full panoply of benefits that California labor law demands of employees. 

The gig companies insist that polls of their drivers indicate that the drivers want the flexibility that the life as an independent contractor provides. As Uber chief executive officer Dara Khosrowshahi wrote in a New York Times piece, “Our current employment system is outdated and unfair. It forces every worker to choose between being an employee with more benefits but less flexibility, or an independent contractor with more flexibility but almost no safety net.”

He called for a “third-way,” which includes a pledge from gig companies to offer cash benefits for workers to use as they need. 

The issue for Uber and Lyft is financial. They insist costs will soar and many jobs would be lost if they had to apply the benefits required under California law to all the drivers. Of course, the issue of cost for business or lost income for gig workers are the same matters that concern other opponents and critics of AB 5. 

Some opponents to AB 5 wanted a complete overhaul of the law that would apply to all gig workers. When that didn’t happen via initiaitve, they are left with the question of whether supporting Proposition 22 is worth it to them. 

The Yes on Prop 22 website lists a broad coalition of supporters, including more than 75,000 individual drivers. That army could be greatly enlarged by others who have problems with AB 5 disrupting their lifestyles, income or business models if they believe Proposition 22 opens the door to future reforms to the system for them.

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