California voters recently passed Proposition 22, a ballot measure backed by some of the most powerful players in the rideshare and delivery industries: Uber, Lyft, Instacart, and DoorDash. Together, these four companies supported Prop 22 with the most expensive ballot campaign in California history, costing them more than $200 million.

Before the measure passed, Uber and Lyft threatened to uproot their operations in California and abandon the rideshare market. They launched multimedia marketing campaigns to convince the public that ridesharing is essential to the California economy, good for the environment, and treating its drivers fairly.

Most of the public agreed. At the polls, 58% of ballots were cast in favor of Prop 22. Drivers for app-based transportation companies may remain independent contractors.

Why were companies like Uber and Instacart so eager for Prop 22?  It essentially exempts them from the obligations of California employment law. Here’s why that matters for drivers, customers, and Californians like you.

Prop 22 Overrides California AB 5’s Worker Protections

California AB 5, a labor law passed in 2019, attempted to hold these companies to the same standards as other employers. Drivers would have been viewed as company employees deserving of minimum wage and other worker protections.

Prop 22 exempts  app-based transportation companies from AB5, meaning they can continue to treat their drivers as independent contractors. Drivers won’t be entitled to receive minimum wage, worker’s compensation, or health care benefits, and they will be responsible for maintaining their own vehicles and insurance, among other things.

While many people – including many rideshare drivers – supported Prop 22, it’s easy to see it as a net loss for gig workers. Legal experts say the long-term effect of Prop 22 will likely be to bolster the profitability of rideshare companies, passing off costs to customers, workers, and the California public.

Veena Dubal, a California law professor, recently described the impact of Prop 22: “To get Prop 22 passed, gig companies – which have yet to turn a profit – spent a historic $205 million on their campaign, effectively creating a political template for future anti-democratic, corporate law-making … This corrupt campaign worked. $200 million is a lot of money, but it’s a lot less than the long-term prospect of paying a living wage to workers and being responsible to consumers for safety and accessibility. Their gamble paid off, for now.”

Prepare Yourself for the Safety and Liability Impacts of Prop 22

What will Prop 22 mean for you as a customer or driver? It’s hard to say exactly because we’re entering new legal territory here. But companies like Uber and Lyft have track records for misleading the public about how they do business. They’ve spent millions on legal battles to keep their operations hidden behind closed doors.

Here are some potential impacts you could see:

  • Drivers will not be entitled to minimum wage and could even see their wages drop as rideshare companies are emboldened by Prop 22.
  • Drivers who are injured on the job will be on their own to pay for their medical bills, car repairs, and lost days of work.
  • Customers who are injured in Uber and Lyft accidents will find it extremely challenging to hold rideshare companies responsible and will need to pursue rideshare insurers and individual lawsuits.
  • If you are a California pedestrian, cyclist, scooter rider, truck driver, motorcyclist, or another road user who is harmed by one of these independent contractors, you may have a tough legal battle to get paid for your medical bills and other costs.

Safety and environmental groups are concerned that California may become more polluted and unsafe now that rideshare companies face less oversight and aren’t held responsible for what their drivers do. For example, research shows rideshare drivers expel 69% more carbon emissions than ordinary drivers due to habits like idling for long periods and doing laps around city blocks while waiting for passengers.

There have even been allegations of implicit bias and structural racism because many of these companies attract immigrants and people of color to drive for them, then offer low pay and no benefits. Prop 22 only reinforces this situation.

We hate to say it, but California voters who supported Prop 22 may come to regret it in the coming years. Its benefits may be vastly outweighed by its harmful effects. We’ll all have to watch and wait to see how Prop 22 impacts the people of California.

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