CALIFORNIA – Proposition 22 allows app-based companies like Uber, Lyft, and DoorDash to keep their drivers as independent contractors rather than employees.
Some may recall that in January, a new California law went into effect requiring that these so-called “gig workers” be classified as employees, making them eligible for minimum wage, and other typical worker benefits like overtime, sick pay and healthcare.
Prop 22 would exempt these app-based companies from that law, keeping drivers as independent contractors, but it gives a little back.
Drivers would now earn 120% of minimum wage, but only when they’re actually driving. Not during downtime, in between rides. The companies would also pay drivers subsidies to help them pay for their own health insurance and auto insurance.
Supporters of Prop 22 say the gig company's business model of offering drivers flexible schedules keeps on-demand rides at a relatively low price. Uber claims it would have to cut three-quarters of its drivers in California and prices could more than double if it’s forced to comply with the new state law.
Opponents say these gig companies exploit their drivers and that they are greatly exaggerating the job cuts that would come. And they say the pandemic highlights the need for drivers to have paid sick leave and the ability to collect unemployment benefits.
So, a “Yes” vote on Prop 22 allows these gig companies like Uber, Lyft, and DoorDash to keep their drivers classified as independent contractors but with added benefits.
A “No” vote forces them to abide by the new state law and make their drivers employees with all the benefits that come with that.