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Prop. 22 marked a significant changing of the tides for gig companies, which had largely struck out in courts prior to the measure’s passage in November. Yet suits against the companies are moving forward, and drivers continue to speak out.
For a long stretch leading up to November 2020, companies that employ so-called gig workers like Doordash, Uber, Lyft and Instacart had their backs against the wall.
State lawmakers passed AB 5, which dramatically curtailed the circumstances in which companies are allowed to classify their workers as independent contractors, thus avoiding providing them things like overtime and health benefits. The Legislature then fended off Republican attempts to curtail or overturn the law. Some companies, like Uber, initiated changes meant to give their drivers more autonomy in an effort to show they were indeed independent. Yet a string of court decisions – from state-level superior courts to federal courts – determined that gig companies were bound by AB 5 and that their workers did deserve employment status.
San Diegans were at the center of these efforts: Assemblywoman Lorena Gonzalez wrote AB 5; City Attorney Mara Elliott was among the first to begin enforcing it – she secured an injunction against Instacart and joined a lawsuit against Uber and Lyft seeking to force those companies to classify their workers as employees.
Then Prop. 22 happened.
Voters approved the measure in November after Uber, Lyft, Doordash and others poured hundreds of millions of dollars into the campaign to exempt themselves from AB 5 and continue classifying drivers as independent contractors. In exchange, the measure requires the companies to provide some benefits – but less than what they’d get if they were employees (for example, it requires them to provide subsidies to help drivers pay for health insurance in certain circumstances, but does not require them to actually provide health insurance).
It marked an abrupt and significant changing of the tides. The court cases are continuing, but now they’re quite limited in what they can accomplish – prosecutors can pursue remedies for the period in between when AB 5 became law and when Prop. 22 became law, but likely can’t accomplish big, sweeping changes.
What Drivers Are Saying
Gig workers, meanwhile, are continuing to speak out about the challenges they face – challenges that were underscored this week with the release of research funded by SEIU 721 about the realities of gig work.
A survey conducted by Tulchin Research showed that 86 percent of drivers are ineligible for the health care stipend created by Prop. 22, and 29 percent said they have no health insurance at all.
As the Sacramento Bee reported earlier this year, drivers need to show proof of health insurance before applying for the stipend and many can’t get the stipend if their health insurance comes from Medi-Cal, Medicare or other employers.
The Tulchin Research survey was highlighted Tuesday at a virtual event hosted by rideshare drivers groups We Drive Progress and Mobile Workers Alliance intended to shed light on working conditions.
One of the first workers to speak was Lucas Chamberlain, a gig worker in San Francisco, who described a number of violent encounters while on the job.
In June 2019, he was out delivering for UberEats when a car struck him, causing a leg injury that required surgery, he said. In 2015, he said, a passenger assaulted him after he canceled a ride.
In all cases, Chamberlain said Uber failed to provide a stipend to pay off his medical bills.
“I put my heart and soul into these companies,” he said. “I put my life on the line … I’m very angry these companies haven’t lived up to the promises I was told.”
Kayla Whaling, a spokeswoman for Uber, told Voice of San Diego that the company is continuing to work on priorities and policies to improve drivers’ experiences, including “which includes the need to provide occupational accident insurance to drivers that cover medical expenses and disability payments. We are asking states to require our industry to require this coverage,” she wrote in an email.
“We have been pretty vocal that we believe independent work can and should be improved. We have also recognized this isn’t something we can do on our own and that laws are needed in order to provide new protections that will help improve independent work, rather than eliminating it altogether,” she wrote.
Workers have also spoken out about Uber’s decision to revoke some of the changes it implemented before Prop. 22 that were meant to give drivers more autonomy.
“A lot of drivers were very gung-ho about Proposition 22,” Tonje Ettesvoll, a San Diego Uber driver, told the Los Angeles Times. “Now they feel completely deceived. A storm is coming.”
The Instacart and Uber Lawsuits
Elliott was one of the first officials in California to seize on a provision in AB 5 that allowed city attorneys to sue to enforce the law. She filed suit against grocery delivery app Instacart, and argued its drivers were illegally classified as independent contractors.
“Instead of a minimum wage, overtime pay, and health insurance, Instacart offers its shoppers free shirts and beanies for completing over 2,500 deliveries and discounted insurance at the shopper’s expense,” the suit argued.
Her office secured a series of early wins, including a preliminary injunction halting Instacart’s use of independent contractors. She also joined other city attorneys in a similar suit against Uber and Lyft, filed in San Francisco Superior Court. That suit, too, saw early successes in court – like virtually every lawsuit filed against the companies before Prop. 22.
The state appellate court sent the Instacart case back to Superior Court, where it’s still playing out. A San Diego judge last month denied Instacart’s request to send the case to arbitration, a private court system.
In March, the preliminary injunction that had barred Uber and Lyft from classifying drivers as independent contractors was quietly dissolved at the request of both parties. Uber and Lyft have similarly asked for that case to be sent to arbitration.
New Gig Worker Policies Being Floated
Gonzalez, who wrote AB 5, has a number of bills moving through the Legislature geared toward workers, including a measure that would criminalize wage theft. That measure would consider independent contractors employees when it comes to wage theft. Another would prevent food delivery platforms from charging more for items than the restaurants themselves, and would require all tips paid through the platform to go to the delivery drivers.
California, of course, isn’t the only place confronting policies for gig workers.
As The Markup reported this week, Uber and Lyft have been donating to community groups in cities across the country, whose leaders have then gone on to write op-eds advocating for policies the companies favor, as part of a multibillion-dollar lobbying campaign.
At the federal level, the House passed the PRO Act in March – a sweeping labor bill that would grant gig workers the right to collectively bargain – but its prospects are dim in the Senate. President Joe Biden’s budget proposal includes his intention to end “the abusive practice of misclassifying employees as independent contractors.”
In the UK, meanwhile, Uber was forced to reclassify its drivers as employees earlier this year.
California lifted most of its COVID-19 restrictions this week, and finalized rules about workplace settings.
The public health orders that remain guide extremely large gatherings – those with 5,000 or more people in indoor settings, or 10,000 people or more in outdoor settings.
Republicans in the state Legislature and some of the candidates challenging Gov. Gavin Newsom in a likely recall election have seized on the fact that the governor hasn’t ended the state of emergency he declared to deal with the pandemic.
“The Legislature needs to reclaim its status as an equal branch of government and end his emergency powers now. An emergency without end is a recipe for more abuse,” Sen. Pat Bates wrote in a statement reacting to the Legislature’s passage of the state budget.
Speaking of the budget, lawmakers passed one this week – technically – but it doesn’t mean the spending plan is a done deal. The measure passed this week met a required deadline, but lawmakers and the governor still don’t agree on how to spend billions of dollars in unanticipated revenue. They must strike a final deal by July 1.
The Affordable Care Act survived another Supreme Court challenge – one that pitted California and a coalition of states defending the measure against Texas and other Republican-led states seeking to dismantle it. The court ruled that the Republican-led states lacked the standing to sue. (New York Times)
Devin Whatley contributed to this report.