California’s Prop 22 – The Devil is in the Details

As a California voter, I hate the proposition process.  I have always felt it was inappropriate for the masses to legislate, since that is what we elect our state representatives to do. Unfortunately, those representatives don’t always do a good job.  They passed a law in late 2019, AB5, designed to require gig platforms to classify workers as employees and not independent contractors.  However, the law was fraught with problems so dire, that they needed to pass another law  just last month, AB2257, to amend some of those ills (See my post on that here.) In short, they used a very broad brush to disavow most independent work arrangements without considering the repercussions of those actions, the motivations of the workers, or the sheer equity of their actions.  The devil is indeed in the details.  It is no surprise, then, that Prop 22 ended up on the ballot

As somewhat of a pundit on the Gig Economy, I have been asked repeatedly for my opinion of Prop 22.  Here are six things you need to know.

The vast majority of workers do not want to lose their independent status.

69% of drivers  in California support Prop 22. This makes sense for many reasons.  Nearly 80% of these platform -based gig workers are part-time. Most of these part-timers are using the app for supplemental income, not the primary source of income.  These include folks who are employed by a company or self-employed.  I’ve been driven by teachers, masseuses and musicians.  There are also those doing it as a stop gap, while they are in school or training for another role.  The common factor for all of these is the flexibility that this type of work affords.  In fact, in all of the studies of the motivations of gig workers, flexibility is the most important driver, pardon the pun.  In the 2019 study, Freelancing in America, 46% of independent workers say they need flexibility and could not return to regular employment.

The current model has improved the incomes of the workers.

A recent UCLA Anderson School report finds that the flexible nature of the work on platforms enables workers to increase earnings; an employee-based model would have resulted in a 73% reduction in earnings.  My favorite argument was the about the growth of Uber and Lyft (and Doordash, Postmates etc.) in the pre-Covid booming, economy.  Even when there were lots of other jobs available, thousands of workers still wanted to drive for Uber and Lyft.   Moreover, a UC Riverside report, shows that most drivers in California earn well over the minimum wage on the platform, averaging about $25/hr. (Note The report maintains that the earnings  cited by the No on 22 folks was based on a flawed analysis.)

The Social Safety Net will improve under Prop 22.

Admittedly it will not offer all of the protections accorded to employees, but the provisions of Prop 22 will improve the social safety net for its independent contractors.  It will offer a guaranteed minimum hourly fee as well as per mile compensation toward expenses.  There will also be protections against discrimination and harassment.  It will fund health benefits for drivers who work more than 15 hours a week and provide medical and disability coverage for injuries incurred on the job. Moreover, they will work together, since many of these workers use multiple platforms.  As such, funding can come to the worker for healthcare whether they are driving for Uber, Lyft or both

Social justice may also improve.

An interesting editorial by Alice Huffman, the head of the California/Hawaii NAACP about Prop 22 points to the social injustice of the existing system.  The nearly 100 exemptions to AB5 are in professions like architects, accountants, engineers and podiatrists, fields, Huffman, maintains, where the workers are predominately white. The gig workers covered by AB5 are 55% black and brown.  The white workers get to remain independent contractors, while AB5 denies black and brown workers the freedom to work independently in a way that works best for their families.  I can’t say I can confirm her assumptions, but I find the argument compelling.

If Prop 22 does fail drivers will lose…

Estimates vary, but the consensus seems to be that if gig platforms are required to have employees nearly 70% of the independent workers will lose their income; the firms will only be able to employ about a third of the workers. Especially in the current economic climate, the elimination of this source of supplemental income could be devastating for many.

…and California will lose as well.

The cost, convenience and availability of on demand services will change dramatically if AB 22 does not pass. A recent report from an independent firm provided stark details.  Rural areas will no longer be served.  Rideshare rates will go up from 25-100% in some locations. Similarly, food and grocery delivery fees would increase 35-100%, a service that has experienced dramatic increases in demand due to the pandemic. The fee increases would put the cost of the services beyond the reach of many Californians, which is why many faith based and social justice organizations have come out in favor of the measure.


Based on these points, I am sure you can glean how I will cast my vote.  Regardless of how you feel about the issue, be sure to vote., even if, like me ,you aren’t a fan of the proposition process.

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