California has never seen anything like this. Nor has any state — a record $200 million spent on a single ballot measure.
It’s understandable. The financial stakes are high. This is about new labor-management rules for the 21st century gig economy. Or trying to use the same old rules.
It’s Proposition 22, a ballot initiative bankrolled by Uber, Lyft, DoorDash and the like to override a new state law that requires their ride-hailing and delivery drivers to be classified as employees rather than independent contractors.
If the drivers are reclassified as employees, their pay and benefits would increase. But the app-based gig companies say there’d be far fewer jobs because customer fares would rise and demand for rides would fall. The companies probably couldn’t even operate in California, they say.
If the drivers are allowed to remain as independent contractors, the companies will provide modest benefits — a new concession embedded in the ballot measure — and the workers will retain the flexibility to set their own hours and routes.
Organized labor is solidly opposed. It wants to unionize the drivers and contends they’ve been exploited by the ride-hailingand delivery companies.
“It’s smoke and mirrors,” says Mike Roth, spokesman for the No on 22 campaign. “The companies want to lock in the drivers to second-tier jobs.”
But if Proposition 22 fails, “it will cause the industry to sink significantly,” says Bill Hamm, a former state legislative analyst who heads the Berkeley Research Group. He was paid by the Proposition 22 campaign to analyze the measure’s ramifications.
An eye-popping total of roughly $202 million has been raised by both sides, according to the nonpartisan California Target Book, which chronicles California election campaigns.
The “yes” side’s money-raising has dwarfed the opposition’s — $187.5 million to about $15 million.
“The ‘no’ side always knew it was going to be outspent, but we didn’t think we’d be outspent 13 to 1,” Roth says. “No corporations should be able to buy their own laws.”
Maybe. But the U.S. Supreme Court allows it.
The largest donors for Proposition 22 are the ride-hailing companies: Uber with $52 million and Lyft, $49 million. Delivery companies have also kicked in big: DoorDash has spent $48 million and Instacart, $28 million.
Labor money is spread among many California priorities this election cycle. They include legislative races and Proposition 15, the ballot measure to raise property taxes on commercial holdings.
Against Proposition 22, the Service Employees International Union has pitched in $3.7 million, United Food and Commercial Workers, $3.3 million and Teamsters, $1.5 million.
Anyone who has had the TV on for just a few minutes lately has seen where the money is being spent. Every other commercial seems to be a pro-Proposition 22 ad.
“At what point do people get sick of seeing the same thing over and over and they’re not going to listen to it anymore?” asks Steve Smith, communications director for the California Labor Federation.
There’s one new Proposition 22 ad that I got sick of the first time I saw it.
The insulting spot contends that if the measure fails, there’ll be more drunk drivers on the road because they won’t have ride-hailing options. That implies that many of us who summon Uber or Lyft are drunks or druggies — not, for example, sober seniors just seeking an easy, affordable ride.
Proposition 22 has some pluses — benefits and flexibility for drivers and a life raft for a growing but still unprofitable industry — but there’s one provision that’s just bad government: For the Legislature to amend the initiative, it would require a practically impossible seven-eighths majority vote of each house.
Many goodies would need to be handed out to secure that massive a vote.
We’re at this point with Proposition 22 because Gov. Gavin Newsom and the Democrat-dominated Legislature refused to deal with the gig companies last year and again this past summer.
The gig operations wanted to negotiate a compromise — some were even willing to allow collective bargaining — but unions were split. And Democratic politicians won’t budge on much of anything without labor’s permission.
This began when the California Supreme Court significantly tightened the rules for classifying a worker as an independent contractor rather than an employee. An employee is eligible for first-rate benefits and job protections — but also is subject to employer dictates, such as working hours and where to drive.
Labor and the Legislature decided to enshrine the court ruling in state law. Assembly Bill 5 was passed last year. It covered several types of workers — such as big-rig truck drivers, freelance journalists and musicians.
After howls of protest from companies and workers, some exemptions were granted. Lawsuits were filed and cases are pending. But the governor and Legislature wouldn’t bend on ride-hailing and delivery driving.
Full disclosure: My consultant daughter is working with a law firm representing Lyft in an AB 5 lawsuit filed by the state attorney general.
Uber, Lyft and allies threatened a $90-million repeal campaign. Many Democrats thought they were bluffing. Now the companies are spending twice that much.
There’s no predicting how this will turn out. Reliable polling is outdated. It’ll depend on how effective those costly TV ads are.
It’s a close call for me, but I’ll vote “yes.”
I like people being able to work independently when they want to. Perhaps pick up extra bucks to supplement other income. Or help pay their college expenses like my grandkids do.
Some gig officials tell me they’d still like to negotiate a grand bargain with labor and the Legislature even if Proposition 22 passes. That will never happen if it fails.
For the record:
9:38 AM, Oct. 16, 2020: An earlier version of this article said the No on 22 campaign spokesman was Mike Ross. The spokesman is Mike Roth.
This story originally appeared in Los Angeles Times.