SAN FRANCISCO — For Uber and Lyft this election, “yes” meant “no” to labor rights.
Only now, some Californians are saying that they have buyer’s remorse — and that they thought a “yes” vote was in favor of giving drivers new benefits they would not otherwise receive. Some California voters have a warning for those who may soon face a similar decision.
“I definitely feel deceived,” said Lindsey Schaffran, 27, of Modesto, who voted in favor of Proposition 22. “We all felt that Prop 22 was going to help the drivers, and Uber and Lyft were going to be paying them more, when really they’re just trying to save their own pockets.”
The passage of Prop 22 — and similar measures across the country — could signal a tidal shift for millions of gig workers, some of whom have fought for better pay, benefits and the right to unionize. The proposition was also backed by DoorDash, Instacart and Postmates, which was acquired by Uber. Labor advocates cast it as a 21st-century assault on workers’ rights, at a time when workers are in a weaker position because of the pandemic and the economic crisis.
“All of us need to pay attention,” said Susan Hurley, executive director of Chicago Jobs With Justice, a nonprofit coalition of 40 unions and community partners. “We see companies not wanting to go to back to hiring full-time people. They want to have independent contractors, and that is true across the economy.”
Hurley said gig companies are already trying to seed the same conversation about contractor status in Illinois, but advocates are prepared to fight back.
The measure’s success could endanger independent contractors outside the gig economy, too. That includes janitors and home health aides, who also do not typically qualify for minimum wage, overtime protection, paid leave or unemployment insurance, said Margaret Poydock, a policy associate at the Economic Policy Institute, a pro-labor think tank. “Prop 22 showed that companies and big corporations can buy their way out of providing protections for workers under the law,” she said.
Uber chief executive Dara Khosrowshahi said the company would be “more loudly advocating” for laws like Prop 22, while Lyft Chief Policy Officer Anthony Foxx said Prop 22 demonstrated a model that could be “replicated and can be scaled.” Lyft President John Zimmer told Axios last week that the company saw an “easier” path to cementing drivers’ contractor status at the federal level but was prepared to go state by state.
Uber, Lyft and the Yes on 22 campaign defended against the notion that voters were misled.
They pointed to internal polling that showed increasing support for the independent-contractor model over the course of the fall, which they said was a sign that voters were aware of the issue at the heart of the measure. Meanwhile, 95 percent of respondents indicated they were aware of Prop 22 as Election Day neared, according to the internal polling.
“Nine million Californians voted yes on Prop 22,” Geoff Vetter, a spokesman for the Yes on 22 campaign, said in a statement. “To suggest that these millions were somehow so feebleminded they voted for something they didn’t want is offensive to voters and flat out wrong.”
Still, Bill McInturff, a partner at Public Opinion Strategies, which was hired by the Yes campaign to conduct internal polling on Prop 22, said, “You can’t have 18 million people vote and not have some confused voters.”
“A diverse and sizable majority of California voters, from both parties and nearly all corners of the state, said Yes on Prop 22. That’s simply a fact,” said Uber spokesman Noah Edwardsen, who added that it would be “irresponsible” to suggest otherwise.
DoorDash spokesperson Campbell Matthews said, “Prop 22 passed in California because it delivers a solution that Dashers and the public supported since long before the campaign began: preserving flexibility and pairing it with new protections."
Instacart spokesperson Natalia Montalvo said, “As policymakers across the country look to develop tailored policies that meet the needs of constituents in their respective states, Instacart will lend its voice in support of what shoppers want and need."
Lyft referred to the response of the Yes campaign and its pollster.
The business models of Uber and Lyft hinge on classifying drivers as independent contractors. They and other gig-economy companies say their models work only by forgoing a salary and benefits for millions of workers. Instead, the companies pitch themselves as “platforms” that connect users and workers, even though the workers can’t set their own wages and are dependent on the algorithms and technology of each company to determine which gigs they can see in the app. The companies prize the independent-contractor model because it makes it easy to rapidly scale up their workforces. Drivers pay for their vehicles, gas and maintenance, and companies pay no benefits, so fares remain cheap.
Maintaining workers’ contractor status is necessary to keep fares low and wait times short, Uber and Lyft argue. An employee model would mean cutting hundreds of thousands of gig workers, the companies claim, because they would have to implement schedules and could not afford to sustain their workforces if they had to provide benefits. They would have to charge higher fares to support the fixed costs of employment, reducing demand and leading to smaller overall workforces, particularly in sparsely populated areas, they argued. Uber’s and Lyft’s stocks have soared, logging double-digit percentage gains, since the vote, which secured more than 58 percent support.
Gig companies are expected to try a similar strategy in other states where contractor status has been up for debate, such as New York, New Jersey, Massachusetts and Illinois, according to experts on the gig economy.
Prop 22 was conceived in an attempt to subvert a law, known as Assembly Bill 5, making certain categories of California gig workers employees. Uber, Lyft and DoorDash objected to the employment requirement and continued treating drivers as independent contractors.
As more and more Californians came to rely on gig work, political officials and labor advocates grew concerned about the new class of low-wage worker. California, with its estimated 1 million gig workers, has been the largest U.S. market for that type of labor. Officials said the workers were deprived of health care, a minimum wage, job security, and basic protections against discrimination and sexual harassment. So legislators approved Assembly Bill 5 (AB5) in September 2019 to grant benefits to certain classes of gig workers, including Uber and Lyft drivers, by making them employees.
After the law took effect this year, California Attorney General Xavier Becerra (D) sued Uber and Lyft in May, alleging they were misclassifying hundreds of thousands of workers by treating them as contractors. The companies were expected to be ordered to come into compliance in coming months.
Prop 22 sought to invalidate AB5′s impact on Uber and Lyft drivers, and it included a provision saying a seven-eighths legislative supermajority would be required to overturn it. Its passage effectively rendered AB5 moot.
During the campaign, Uber and Lyft bombarded the television airwaves, social media and their own apps with messaging promising a minimum wage, health care and protections typically consistent with a full-time job. “Prop 22 will provide guaranteed earnings and a health care stipend,” read one click-through prompt in the Uber app, where drivers were given an option to tap “Yes on Prop 22” or “okay.”
Voters were exposed to ads that showed drivers lauding the independence and earnings opportunities that gig work gave them, and asking Californians not to take away their flexibility. Voters were told they could grant drivers guaranteed earnings and health-care benefits by voting “yes,” but if they voted “no” up to 90 percent of gig-work driving jobs could disappear.
One survey of California voters said 40 percent of “yes” voters thought they were supporting gig workers’ ability to earn a living wage. Some voters said they did not immediately connect Prop 22 to AB5, instead seeing it as a way to grant what seemed to be a minimum wage. And voters who spoke with The Washington Post said they didn’t realize they were making a choice between benefits guaranteed through employment and an arbitrary set of supplemental benefits — including a health-care stipend — designed by the gig companies.
Those who campaigned against Prop 22 said the information gap was evident as they spoke with voters. Phone banker Bryan Culbertson, 36, of Oakland, said voters consistently indicated their support of Prop 22 by noting they had seen the television advertisements and wanted to give drivers a minimum wage. However, Prop 22 promised 120 percent of the minimum wage for “engaged time,” meaning time en route to a pickup or making a trip. Time waiting for a fare would not be compensated.
Voters, said Culbertson, were under the impression that their choice was between a minimum wage or nothing.
“I was surprised that the advertising campaign had as much reach,” he said.
One of the most misleading narratives pushed by gig companies was the idea that Prop 22 guaranteed “flexibility” for workers, said the Economic Policy Institute’s Poydock. “Nowhere does it say employees have to give up flexibility in order to have worker protections,” she added.
Uber maintains that drivers would have less flexibility as full employees.
“There is simply no major employer in the state of California, or anywhere, that does not exert significant control over hourly employees, in stark contrast to the independence that drivers have by virtue of their status as independent contractors,” said Edwardsen.
A portion of ads used a survey that claimed that at least 70 percent of drivers supported Prop 22. The data cited included unscientific surveys and a poll ordered by Uber.
Uber used similar figures to bolster internal support among white-collar employees, said Eddy Hernandez, an ex-Uber engineer who quit in September over the company’s handling of Prop 22.
“I knew that this wasn’t high-quality information; this was the company ‘finding a way to yes,’” a popular mantra among Uber employees, Hernandez said.
But Edwardsen said that driver “surveys were remarkably consistent, whether they were commissioned by Uber or not: The vast majority of drivers did not want to be employees."
After waves of corporate layoffs as ridership dropped during the pandemic, there was little pushback from Uber employees, some of whom saw Prop 22 “as this light at the end of the tunnel” that could increase the value of their stock or lead to bonuses for pushing the proposition, Hernandez said.
Mars Sailors, a 21-year-old university student, said he voted in favor of Prop 22 after receiving a slew of text messages on the measure, many touting health-care benefits.
The measure said it would provide a health-care contribution to qualifying workers, equivalent to either half or the full employer-provided average under the Affordable Care Act depending on time worked. Employment usually entails full health-care coverage.
“They kept throwing the word ‘health-care’ around. … I was like ‘I like health care,’ I fell for that,” said Sailors, who added that he regretted voting yes. “I thought I did do my research, and I didn’t.”