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Even for CA ballot fights, Prop. 22’s price tag is historic

A vehicle for Lyft and Uber awaits customers in Redwood City. (Photo: Sundry Photography, via Shutterstock)

Proposition 22 has ignited the most expensive ballot proposition fight in California history, exemplifying the emerging 21st century battle of traditional employment-vs.-the gig economy.

The Trump administration also is poised to weigh in, and the initiative has a slight edge in the latest polling.

The latest development in the high-stakes, high-spending war is a 74-page ruling from a California appellate court declaring rideshare companies Uber and Lyft misclassified their drivers as independent contractors instead of employees. If approved by voters on Nov. 3, Proposition 22 would affirm the companies’ stance that their drivers are not employees but independent contractors not entitled to benefits offered to most employees.

The campaign spending is unprecdented: Uber, Lyft, Instacart, DoorDash and PostMates, along with their allies, have spent a single-measure record of some $200 million, and have about $5 million cash on hand about a week before the election, according to state financial disclosure records viewed Monday. Before Proposition 22, the most costly ballot initiative was Proposition 87 of 2016, which imposed an oil severance. The measure, after a $151 million fight, was defreated.

Much of the money has been spent on a flood of television advertising, with the companies warning that hundreds of thousands of jobs will be lost if Proposition 22 fails. Their television spots feature happy drivers talking to the camera about how the independent contractor arrangement fits into their work-life situation. The ads claim that drivers favor Proposition 22 by a 4-1 margin and call the alternative “forced employment.”

The principal coalition of organized labor opposing Proposition 22 has spent about $20 million.

The U.S. Labor Department is proposing to move more quickly than usual to set federal standards defining when a worker is an independent contractor.

There may not be an immediate effect of the appeals court ruling because it will be put on hold for at least 30 days. The decision from the 1st District Court of Appeal in San Francisco affirmed a preliminary injunction granted in August by Judge Ethan Schulman of the San Francisco County Superior Court. Judge Schulman acted on a lawsuit filed in May by state Attorney General Xavier Becerra, along with city attorneys from Los Angeles, San Diego and San Francisco.

“Today’s ruling means that if the voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state,” Uber said in a statement after the most recent ruling.

“This decision makes it abundantly clear that Uber and Lyft have been breaking the law for years,” San Francisco City Attorney Dennis Herrera said in a statement. “This is a victory for the people of California and for every driver who has been denied fair wages, paid sick days, and other benefits by these companies.”

Uber and Lyft can still ask that the decision be reviewed by the California Supreme Court, which can decide whether or not to hear the case.

Meanwhile, the Trump administration now seems to be taking an interest. The U.S. Labor Department is proposing to move more quickly than usual to set federal standards defining when a worker is an independent contractor or a traditional employee. The Department has specified a public comment period of 30 days, rather than the customary 60 days.

Thus far, Proposition 22 has a slight edge, according to polling released Monday by Mark DiCamillo at UC Berkeley’s Instutute for Governmental Studies.

Opponents of Proposition 22 argue that it’s a matter of simple fairness. If a company wants to do business in California, they say, it should pay benefits to employees, not seek to circumvent the law and save millions by labeling them independent contractors.

Geoff Vetter, spokesman for the “Yes on 22” campaign, doesn’t agree.

“It allows flexibility for drivers. It give retirees an opportunity to make extra money,” he said in a telephone interview. “It allows students to earn money while fitting work into their schedule.  Eighty percent of the drivers work less than 20 hours a week.It’s a 21st-Century solution to a 21st Century problem.”

It all began with AB5, a bill signed by Gov. Gavin Newsom in September 2019 that took effect in January and required the companies to treat their drivers as employees with benefits. Uber, Lyft and DoorDash and others moved immediately to nullify the law through a ballot measure that became Propositon. 22.

Thus far, Proposition 22 has a slight edge, according to polling released Monday by Mark DiCamillo at UC Berkeley’s Instutute for Governmental Studies.

Of those surveyed, 46% favored the measure, 42% opposed, and about 12% were undecided. Earlier, a September poll from IGS  showed 39% of likely voters supporting Proposition 22 and 36 percent  on  the “No”  side.  Then, 25% percent were undecided.

Uber CEO Dara Khosrowshahi argues that there would be a major job loss if Proposition 22 fails.

The adversaries mostly break down according to California’s familiar political divisions: Yes on 22 is backed by the California Republican Party, the California Chamber of Commerce and the California Farm Bureau Federation. Support also comes from Mothers Against Drunk Driving and the California National Organization for Women.

No on 22 includes the California Democratic Party; Joe Biden and Kamala Harris, Assembly Speaker Anthony Rendon;  the Service Employees International Union, Vermont Sen. Bernie Saunders, Massachusetts Sen. Elizabeth Warren and Gig Workers Rising, a driver advocacy organization.

Earlier polling also pointed up California diverse geographic political loyalties. Los Angeles County split 38-38, while the San Francisco Bay Area was opposed, 41-32. Orange County favored Proposition 22 by a 46-30 margin with 24 percent undecided.

Uber CEO Dara Khosrowshahi argues that there would be a major job loss if Proposition 22 fails:

“Uber conducted an analysis to measure the economic impact of requiring all drivers in the U.S. to be employees. Before COVID-19, nearly 1.2 million drivers in the U.S. were actively earning income on Uber’s platform each quarter. According to our research, if Uber instead employed drivers, we would have only 260,000 available full-time roles—and therefore 926,000 driverswould no longer be able to work on Uber going forward. In other words, three-fourths of those currently driving with Uber would be denied their ability to work.”

Los Angeles Mayor Eric Garcetti is a “No” vote, tweeting that “Prop. 22 would undermine important worker protections and increase the financial burden on working Californians. I’m proud to stand with responsible businesses, and our sisters and brothers in Labor …  saying no on 22.”

The “Yes” campaign is seeking support from city officials by helping to finance their campaigns.

A recent four-color flyer for Oakland City Council candidate Derreck Johnson listed its sponsor as  Californians for Independent Work, with “major funding” from Lyft.


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