US election: California voters sided with Uber, denying drivers benefits by classifying them as contractors

Californians have determined the future of ride-hailing and delivery apps, with 58 per cent voting that drivers should be classified as independent contractors, rather than employees, according to results early Wednesday.

The state ballot measure, Proposition 22, will make drivers independent contractors according to California law. That would supersede a new law known as A.B. 5 intended to grant drivers full employment, including minimum wage protections, health care and such benefits as unemployment and sick leave.

The Washington Post projected early Wednesday the measure would pass, after sailing to a lead of 58 per cent to 42 per cent with an estimated 59 per cent of votes counted. The result means the gig companies defeated legislation to make drivers employees after running a record-spending $200 million (£153 million) campaign to deny workers employment.

Both sides of the debate treated Prop 22 as an existential battle. For labour advocates, it was about the precariousness of a growing economic class of workers. For corporate interests, it was about the viability of the gig economy business model, which has yet to prove profitable despite raising billions from venture capitalists and shareholders.

California's decision on Prop 22 could be replicated around the country, something that has prompted such on-demand apps as Uber, DoorDash, Lyft and Instacart to turn this into the most expensive ballot campaign in state history. Those backing the effort had spent more than $200 million (£153 million) to beat the legislation by Monday, more than 10 times as much as Prop 22's opponents.

Meanwhile, gig workers in California have been facing the most challenging era since the model emerged. They are navigating jobs upended by a pandemic, the economic downturn, social unrest, wildfires, plummeting requests for rides and surging demands for delivery. 

Many say that after being enticed into the line of work by flexible hours and good pay, they feel they've been squeezed and marginalised after companies attract enough drivers to cut back what they pay.

Chase Copridge, 33, moved from Kentucky to California several years ago seeking out what he saw as the promise of the gig economy. He works for Instacart, DoorDash and Amazon Flex, and has driven for Uber and Lyft in prior years. He now earns as little as $150 (£115) day, down from $400 (£307) in 2016 when he started.

Today he lives in a grey 1993 Ford Econoline van he parks in a safe parking zone in Oakland.

"I got caught up in the gig economy's nonsense, and I got caught in a vicious cycle," said Copridge, who begins every week $260 (£200) underwater because he rents a Chevrolet Bolt for work.

"We cannot let this become a new normal in our society," said Copridge, who is a member of the labour group Gig Workers Rising.

With an estimated 1 million gig workers, California has been the largest US market for such labourers since app-based companies emerged a decade ago. Concerns over the treatment of those workers, and others without job projections, led California legislators to explore structural changes to the model. 

Assembly Bill 5, introduced by Assemblywoman Lorena Gonzalez, D-San Diego, aimed to usher in employment for Uber and Lyft drivers, along with those for such food delivery apps as DoorDash and in other industries.

California legislators passed the landmark law last year, making certain categories of gig workers employees. It aimed to give them wage guarantees and health care, along with job protections against such issues as discrimination and sexual harassment.

But Uber and other gig companies have disputed that the law applies to them and challenged its merits. They have floated a number of arguments, including that it would cause "irreparable harm" to their business models and would limit their ability to serve certain markets and keep costs low.

The companies also argue that the majority of drivers want to remain independent. They say their business models rely on contractors' flexibility, which enables the cheap fares and short wait times that make the apps convenient. Employment would require them to rewrite their business models, they say.

Uber declined to comment for this story.

"For many, the gig economy has been a lifeline, providing them supplemental income to afford medical bills, pay for school, or make ends meet to support their families," Geoff Vetter, a spokesperson for the Yes on 22 campaign, said in a statement. "If Prop 22 passes, the flexibility that drivers need and want to choose when, where, and how long they work would be protected."

Lyft spokesperson Julie Wood said the company expects the measure to pass.

"Drivers have consistently said they want to remain independent, and we believe California voters will stand with them by voting yes on Prop. 22, which provides independence plus benefits," she said.

DoorDash spokesperson Taylor Bennett said, "Our support for Prop. 22 is part of our commitment to protecting the economic opportunity that tens of thousands of Californians value and the access to delivery that so many restaurants rely on, especially at such a critical time."

Instacart spokesperson Natalia Montalvo said, "Prop 22 is needed to protect tens of thousands of opportunities for shoppers, and to preserve the affordable and convenient grocery delivery services millions of Californians rely on."

Amazon declined to comment for this story. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

Jerome Gauge, a volunteer spokesperson for the No on 22 campaign who has been driving full time for Lyft since 2018, said it's misleading to refer to gig companies as "supporters" of the ballot initiative. "They are the authors. They decided what was in it. They're billion-dollar companies that are in control of our fates, and Prop 22 would solidify their control over our lives and livelihood," Gauge said.

California's attorney general sued Uber and Lyft in May, alleging the companies were misclassifying hundreds of thousands of workers under A.B. 5. Then in August, a San Francisco judge ruled in the state's favour, after which an appeals court sided with the state this month. The order giving Uber and Lyft 30 days to come into compliance was expected to take effect in several months.

Uber and Lyft said they were considering their appeal options, but Tuesday's vote could render moot any court ruling on the subject.

Quintin McFadden, a 32-year-old Navy veteran living in Los Angeles who has been driving for Uber since 2013, said he was persuaded to vote in favour of Prop 22 after talking to other drivers in a Facebook group and seeing a poll on TV that said most drivers support the measure.

"I can't even watch 'Jeopardy!' in peace without watching a commercial about the government or propositions," he said. For McFadden, who works full time for Target and already receives health insurance through Veterans Affairs, Prop 22's appeal is both the flexibility and health care contributions that kick in for drivers who work 15 hours a week.

"Who doesn't need extra health care?" he asked. McFadden repeated a claim made by the Yes campaign that opposing Prop 22 would force drivers to work on a set schedule.

Nothing in A.B. 5 requires gig companies to establish rigid schedules for drivers. However, companies have argued that they that they cannot adopt an employment model unless they exert more control over drivers.

Lyft driver Bruce Blood, 33, said a nightmarish ordeal exemplifying his own lack of control over his work had led him to oppose Prop 22. He said the gig economy has pushed him to the brink of eviction.

While headed to a pickup in Burbank, Calif., in mid-September, he was pinned by another vehicle at an intersection, he said. His car, which he rented through Lyft's Express Drive programme, was towed to an impound lot. He reported the incident to Lyft, which later picked up the vehicle. Still, the company has attempted to charge him $229 (£176) in rental fees on a weekly basis since the incident and had been unresponsive to his repeated requests to eliminate the charges because the car is no longer in his possession.

Blood started working for Lyft last year, he said, and has been frustrated with a lack of control over changes within the apps or his ability to make his voice heard.

He had lost $560 (£430) due to the ordeal, the two charges Lyft was able to make successfully before he blocked the app's access to his bank account, along with his ability to rent a car and thus drive for Lyft. Lyft's Wood said Monday that Lyft was working to reverse the erroneous charges. Lyft charged him a $228.85 (£176) rental fee on Tuesday, after telling The Post a day earlier it was refunding him. After again being contacted by The Post, Wood said Lyft was reversing that charge as well.

"I am currently behind $2,700 (£2,075) in rent, risking eviction because of this," said Blood, of West Hollywood. "I have not been able to pay for my health insurance. Lyft does not offer health insurance, so I've fallen behind on that. It's hard to be able to get food."

"I would want to be an employee. I would want to have rights to fight stuff like this," he added.

In San Francisco's Mission District neighbourhood Tuesday, voter Chris Diaz, 53, said he decided in favour of employment for Uber and other gig economy drivers. His vote, he said, was informed by his own past experience with the contract model.

"I used to be freelance and it's really hard to line up work hours," he said. "If there's no work they don't have to call you back for months. But once you're an employee, you start to get benefits, you get health insurance, maybe. There's just more benefits to being an employee than a contractor."