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Uber, Lyft Put Down $60 Million To Pass Prop 22 in California, Diminish App-Based Drivers’ Rights

Uber and Lyft, along with Doordash, Instacart, and Postmates, have donated $110 million combined to fund the passing of proposition 22 in California that would make app-based drivers independent contractors, not employees.

Uber, Lyft, and Doordash each put $30 million into the campaign while Postmates and Instacart put down $10 million each, according to BallotPedia.

If the proposition is passed, it would overturn Assembly Bill 5 that was signed in September of 2019 in California in regards to app-based drivers.

Assembly Bill 5 made it so workers are assumed to be an employee rather than an independent contractor. The bill made it so the employer would have to prove three different criteria in order to classify workers as independent contractors.

  • “The person is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact.”

  • “The person performs work that is outside the usual course of the hiring entity’s business.”

  • “The person is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.”

Uber and Lyft drivers are central to the company’s business and would not be considered independent contractors under Assembly Bill 5.

As such, it would make it impossible for drivers to unionize and bargain collectively for better working rights in the future. It would also let the companies avoid “expenses like healthcare and unemployment insurance for hundreds of thousands of drivers in the state,” per CNBC.

With Uber and Lyft’s campaign for contracted workers unsuccessful so far, the companies have moved to other tactics.

The two companies are trying to make the argument that the current law would restrict drivers’ ability to work a flexible schedule. However, that doesn’t have to be the case.

“The reality is that you can be a part-time driver and still be an employee. You can have flexibility and still be an employee,” Silicon Valley representative Ro Khanna said in a phone interview via CNBC. “There’s no justification for not treating these drivers as employees.”

“Yet, having failed to obtain an exemption from this legislation and in the face of mounting legal challenges these companies are funding a deceptive and dangerous ballot initiative – Proposition 22 – that would close off decades of protective labor and anti-discrimination laws in California for their workers,” said a paper on ForWorkingFamilies.org.

The two companies threatened to take their business out of California if they have to classify their workers as employees.

The companies also have indirectly begun going after critics. Associate professor at UC Hastings Law School Veena Dubal has been one of those victims.

“As a result of her criticism of Uber, Lyft, and the gig economy business model, Dubal has become the target of harassment on Twitter, some of it obscene and some of it overtly encouraged by the Yes on Proposition 22 campaign, which is heavily funded by Uber and Lyft,” said Los Angeles Times’ Michael Hiltzik.

If you see the ad campaigns on television (like the one below), don’t fall for them. Proposition 22 will not help drivers in the long run.

Always think about who wants these propositions passed and why. Don’t ever vote yes on a proposition unless you are fully educated on the proposition.

For instance, why would Uber, Lyft, etc. want to spend $110 million in order to have better benefits for their employees that cost even more money? That doesn’t make sense. The companies see it as paying $110 million now so they can pay their employees less in the future and make more profits down the line.

Uber has also been running ads to promote mask-wearing, which is great on the surface, in order to promote a view that the company looks out for its workers. But if it really looked out for its workers, it wouldn’t be spending millions of dollars so it wouldn’t have to pay healthcare and other benefits for its workers.

If you aren’t convinced about opposing proposition 22, Joe Biden, Elizabeth Warren, and Kamala Harris all oppose prop 22 as well.

About Ryan Lipton

Ryan is a student at the University of North Carolina at Chapel Hill majoring in Business Journalism. He has written in the past for SB Nation’s Silver and Black Pride, USA Today Sports Media Group, North Carolina Business News Wire, the Daily Tar Heel, and has worked with Ice Cube’s BIG3 basketball league. Ryan is also a regular contributor to MeidasTouch.com

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