The most expensive Californian proposition
The ongoing battle between rideshare companies and gig-workers
Over the course of the last few months, rideshare companies have spent hundreds of millions of dollars on prop 22. This makes prop 22 the most expensive proposition in California's history.
What is prop 22?
The state recently passed laws requiring rideshare companies to hire workers as employees as opposed to independent contractors. Prop 22 opposes this and proposes the following
- Make drivers independent contractors
- Requires rideshare companies to provide certain benefits to their workers (this includes minimum wage, Health Insurance Stipend, rest policy, etc.)
This doesn’t clear up much though, to truly understand prop 22 and why rideshare companies care so much about this we must understand the difference between employees and independent contractors
What is the difference between employees and independent contractors?
An employee has set benefits and protections which are enforced by the state. Some examples of these would be laws surrounding healthcare, minimum wage, and unionization. When one is employed the employer must abide by these requirements set by the government.
As an independent contractor, the terms and conditions in which you perform work are set out in a contract between you and the employer. This basically means that the company no longer needs to abide by the minimum requirements provided by the government for workers.
What does this mean for ridesharing workers?
If prop 22 passes rideshare workers will be largely at the mercy of their companies for setting their working conditions. There will be some set requirements from the state such as a minimum wage but these requirements will be much less and ridesharing companies will have much more autonomy in making these choices.
A very important tool for workers are unions. Through unions workers can join together a negotiate their working conditions. While independent contractors can still join a union that union will be essentially powerless. A union formed by indpendent contractors is not protected by the many laws and acts which would give power to a standard union. For example National Labor Relations Act protects workers which go on strike and protects them from any negative action the company tries to take on them. This will not apply to rideshare unions. Infact employers will not even be under the obligation to bargain with the union regarding contract terms. This essentially means that independent contractors can’t form strong unions and it will be very hard to bargain with companies.
Unions are not the only difference between employees and indpenedent contractors. There are countless laws that give require companies to provide many benefits to their employees. If these proposition passes almost of these laws will no longer apply to them. On the flip side, this does give a much more flexiblity in the contracts made between the workers and ridesharing companies allowing them to make independent decisions on working hours and related topics.
Why did ridesharing companies spend so much on prop 22?
Companies like Uber and Lyft are already unprofitable and have been functioning at a loss from the very start. If prop 22 passes they will save many costs which they would otherwise have to pay in order to cover employee benefits. The ridesharing market is already highly contested and because of this they don’t have much room for chaging more for each ride. The amount of costs this proposition could save them is clearly indicated by the amount that they were willing to spend on it which was upwards of 200 million dollars.
Conclusions
Prop 22 will provide many rights and benefits to gig-workers and drivers. It will allow them to unionize and make meaningful bargains with their companies. This proposition is an important step in the direction of protecting the needs of the working class and setting high bars for workplace standards. Based off this I believe that we should vote yes on prop 22.
Make your decision it will form the future you live in, go and VOTE!
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