Joanna Szabo  |  October 27, 2020

Category: Labor & Employment

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

California Proposition 22 could change the nature of rideshare gig work.

A lot is on the ballot in the upcoming November general election. One key measure is California Proposition 22, which could make change California labor laws for millions of gig workers, shaping the gig economy for years to come.

What Is Proposition 22?

Essentially, Proposition 22 would establish app-based drivers in California—such as those who drive for Uber and Lyft, as well as delivery drivers—as an independent class of workers separate from employees. It would offer them limited job benefits along with wage and worker protections. This has been pushed by major gig economy companies as a compromise between offering actual employment and relegating workers to independent contractor status.

The companies didn’t just support the measure—they created it. Indeed, Uber, Lyft, and DoorDash jointly filed the ballot measure in Oct. 2019 that would later become California Proposition 22.

Uber, Lyft, DoorDash and other tech companies that rely on the gig worker model have spent nearly $200 million to support California Proposition 22, trying to convince voters that this measure is what drivers actually want.

However, critics of the ballot measure say that it does not do enough to actually protect workers, and instead is an effort to combat Assembly Bill 5 (AB5) and the far greater worker protections that came with it.

What Is AB5?

So what is AB5, and why are gig economy companies threatened by it? In short, the new AB5 law requires companies that hire independent contractors to reclassify these workers as employees, though exceptions can be made. The AB5 law went into effect in California on Jan. 1, 2020.

AB5 law would require newly-classified employees to be entitled to employee benefits like workers’ compensation, unemployment, paid sick and family leave, health insurance, and others.

“To state the obvious, drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business,” California Superior Court Judge Ethan Schulman wrote when he ordered Uber and Lyft to reclassify their drivers on Aug. 10, 2020.

The development of the AB5 law came after the major Dynamex case in 2018, when the California Supreme Court ruled that companies must use a three-pronged test to determine the correct classification of workers.

What Is the ABC Test in AB5?

Under the AB5 law, the ABC test assumes that a company’s workers are employees unless the company can prove all of these three things:

  • The worker is free to perform services without the control or direction of the company.
  • The worker is performing work tasks that are outside the usual course of the company’s business activities.
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.

California Proposition 22 could change the nature of rideshare gig work.Are Gig Workers Considered Employees Now?

Despite the passing of AB5 and Judge Schulman’s August ruling, gig workers have not yet been classified across the board as employees. The ruling has been appealed, so a stay has been granted until that appeal is addressed. In the meantime, Uber, Lyft, and other gig companies are being allowed to continue operating as usual.

In the meantime, gig companies are urging app users to support Proposition 22.

“Your ride prices and wait times are likely to substantially increase while most drivers will lose their incomes,” Uber said in a notice to app users.

Uber Pressured Drivers to Support California Proposition 22, Workers Claim

A group of Uber drivers have filed a lawsuit in a San Francisco Superior Court alleging that Uber is “exerting extreme and wrongful pressure on its drivers to vote for and advocate for the passage of Proposition 22” through its in-app messaging tools, according to the Washington Post.

According to the lawsuit, this is a violation of California’s Labor Code. The code prohibits companies from controlling or directing the political activities of employees or attempting to coerce or influence their political action.

The lawsuit alleges that Uber forces its drivers to read misinformation about California Proposition 22, threatens them with loss of employment should Prop 22 fail to pass, and even pressures drivers to indicate their support of the measure.

“This is an absurd lawsuit,” said an Uber spokesperson in a statement, “without merit, filed solely for press attention and without regard for the facts. It can’t distract from the truth: that the vast majority of drivers support Prop 22 and have for months because they know it will improve their lives and protect the way they prefer to work.”

While many polls conducted by these gig companies suggest that their workers want to be independent contractors, critics say that these polls are incredibly flawed.

“The company-paid surveys give the drivers a false choice: Either you are going to have zero flexibility or 100% flexibility, which do you want?” UC Berkeley economics Professor Reich told The Sacramento Bee. “In fact, the companies will still need to offer drivers considerable scheduling flexibility. But the question is not phrased that way, so it’s pushing the drivers to identify a choice they will not need to make.”

Join a Free California Wage & Hour Class Action Lawsuit Investigation

If you were forced to work off the clock or without overtime pay within the past 3 years in California, you have rights – and you don’t have to take on the company alone.

Get a Free Case Evaluation Now

We tell you about cash you can claim EVERY WEEK! Sign up for our free newsletter.


Leave a Reply

Your email address will not be published. By submitting your comment and contact information, you agree to receive marketing emails from Top Class Actions regarding this and/or similar lawsuits or settlements, and/or to be contacted by an attorney or law firm to discuss the details of your potential case at no charge to you if you qualify. Required fields are marked *

Please note: Top Class Actions is not a settlement administrator or law firm. Top Class Actions is a legal news source that reports on class action lawsuits, class action settlements, drug injury lawsuits and product liability lawsuits. Top Class Actions does not process claims and we cannot advise you on the status of any class action settlement claim. You must contact the settlement administrator or your attorney for any updates regarding your claim status, claim form or questions about when payments are expected to be mailed out.