Californians to decide whether app-based drivers should be classified as independent contractors
Californians will decide a ballot initiative on November 3 that addresses whether app-based drivers should be classified as independent contractors.
Uber, Lyft, and Doordash proposed the California App-Based Drivers Regulations Initiative in response to AB 5, which established criteria to determine whether a worker is an employee or an independent contractor. Gov. Gavin Newsom (D) signed AB 5 in September 2019. The 2020 initiative would exempt app-based workers from AB 5.
The initiative would also adopt labor and wage policies specific to app-based companies, including a net earnings floor (a minimum hourly income standard), healthcare subsidies, and occupational accident insurance for workers. Examples of companies that hire app-based drivers include Uber Technologies, Lyft, DoorDash, Instacart, and Postmates. The ballot measure would not affect how AB 5 is applied to other types of workers.
AB 5 established a three-factor test to decide a worker's status as an independent contractor. The three-factor test requires that:
- (a) the worker is free from the hiring company's control and direction in the performance of work;
- (b) the worker is doing work that is outside the company's usual course of business; and
- (c) the worker is engaged in an established trade, occupation, or business of the same nature as the work performed.
Tony West, the chief legal officer for Uber, and John Zimmer, president of Lyft, have both said that their companies continue to operate without reclassifying their workers as employees.
California Attorney General Xavier Becerra (D), along with Los Angeles City Attorney Mike Feuer, San Diego City Attorney Mara Elliott, and San Francisco City Attorney Dennis Herrera, sued the rideshare companies on May 5, arguing their workers should be reclassified as employees. Uber and Postmates launched their own legal complaint, contending that AB 5 violates their constitutional rights and their workers’ constitutional rights. Courts have not yet decided either case. If the court rules before November that Uber and Lyft must consider their workers to be employees based on AB 5 alone, then the ballot initiative would likely override the court order.
Through May 17, 2020, the campaign Protect App-Based Drivers And Services, which is supporting the ballot initiative, raised $110.69 million, including $30.47 million from Lyft, Inc., $30.23 million from Uber Technologies, Inc., and $30 million from DoorDash, Inc. Instacart and Postmates, Inc. also contributed $10 million each.
The California Labor Federation, AFL-CIO, organized the Coalition to Protect Riders and Drivers to campaign against the ballot initiative. The campaign raised $690,000, with the Transport Workers Union of America providing $500,000. Former Vice President Joe Biden (D) and U.S. Sen. Elizabeth Warren (D) also oppose the initiative.
The ballot initiative is the sixth citizen-initiated measure to qualify for the November ballot in California. Four citizen-initiated measures are pending signature verification. At least two additional campaigns have decided against filing signatures due to the coronavirus pandemic and will instead file signatures this summer to appear on the 2022 ballot. The California State Legislature can also place measures on the ballot through June 25, 2020.
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