We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC
    • Podcast
    • Webcasts
    • Blogs
      • One-Off Sound Off
      • Global Logistics and Risk
      • Empowering Your Performance Edge
      • Analytics & Big Data
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • Parcel Forum 2022
    • MODEX 2022
    • Upload Your Video
Home » California voters pass “Prop 22” in win for employers of gig-economy drivers

California voters pass “Prop 22” in win for employers of gig-economy drivers

Ballot measure marks compromise between work benefits due to independent contractors versus employees.

generic driver car
November 4, 2020
Ben Ames
No Comments

While voters are still awaiting firm results on election returns from yesterday’s presidential race, providers of ride-hailing apps and meal-delivery platforms are celebrating a different electoral victory, as California citizens approved a “Proposition 22” ballot measure that allows employers to compensate their gig-economy drivers as independent contractors, not full-time employees.

Opponents of the measure had argued that gig-economy employers such as the ride-hailing giants Uber and Lyft should be required to provide their drivers with benefits and protections including paid sick leave and unemployment insurance. 

That sentiment was recently echoed by the California state legislature, which in 2019 approved Assembly Bill 5 (AB5), drafted to make it harder for employers to qualify employees like truck and cab drivers as independent contractors. At the time, that bill was applauded by union groups like the International Brotherhood of Teamsters, which said it would block companies from dodging the cost of providing benefits like minimum wage guarantees. However, a federal judge in January issued a temporary stay on AB5, to the delight of industry groups like the California Trucking Association, which said the regulation would have raised their operating costs and triggered tighter capacity in the freight sector.

According to public reports, the passage of Prop 22 now marks a defeat for labor unions and could undermine the recent appeals court decision that had sided with California’s state Attorney General Xavier Becerra, who had sued several companies for violating AB5.

The “Prop 22” rule opens a new chapter in the long-running debate, although it is focused on ride hailing apps as opposed to freight carriers. Despite that distinction, there is some overlap between the two sectors, since Uber and Lyft were joined in their support by firms like DoorDash, Postmates, and Instacart, whose drivers often deliver meals and parcels, as well as passengers.

Together, that coalition of app-based employers drafted Prop 22 as a compromise position, allowing employers to avoid reclassifying drivers as employees, but still requiring them to provide certain benefits, according to a statement released today by the Indianapolis-based transportation law firm Scopelitis, Garvin, Light, Hanson & Feary, P.C. For example, Prop 22 guarantees drivers minimum earnings (based off of 120% of the local minimum wage), full payment of tips to drivers, per-mile compensation for the use of the vehicle, a healthcare subsidy based on the average weekly amount of hours of “engaged time” a driver performs, and occupational accident coverage, Scopelitis said.

“The direct impact of Prop 22 is limited to true gig economy operations and does not translate to a larger win for the transportation industry. However, this victory is another indication of the overreach of AB5 and the value that voters place in being able to perform work as independent contractors,” Scopelitis said. “The gig economy companies have faced heavy pressure from the state (both legislatively and in court) to reclassify drivers as employees and in response have mounted the most expensive ballot initiative in the state’s history. This compromise marks the beginning of an alternate worker classification system (sometimes termed ‘dependent contractors') within the United States.”

Following the ballot measure’s passage, San Francisco-based Lyft said the compromise would provide drivers with flexibility, guaranteed minimum earnings, new healthcare benefits, and more insurance coverage. “Millions of people voted for Prop 22 to redefine what independent work looks like for drivers. Now that it has passed, we will be able to give drivers the new benefits they want and keep rideshare available for people around the state,” Lyft said in the statement.

Today, CA voters stood with hundreds of thousands of app-based drivers and passed #YesonProp22 to ensure they could maintain their independence and have access to historic new benefits, like a minimum earnings guarantee and health care. Thank you! https://t.co/pyC3vk17cR

— Yes On Proposition 22 (@VoteYesOn22) November 4, 2020
Regulation/Government Last Mile
KEYWORDS DoorDash Instacart Lyft Postmates Inc. Uber
  • Related Articles

    Demand for air freight improves in September

    Ports push House to pass Inflation Reduction Act following Senate win

    FMCSA relaxes Hours of Services caps for truck drivers resupplying critical goods in Covid-19 fight

Benames
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

Recent Articles by Ben Ames

Norfolk Southern train derailment sparks blaze in Ohio

Industry calls on Congress to deliver bipartisan supply chain legislation

Energy prices to stay high in the near term, SGS Maine Pointe says

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Schneider welcomes first battery-electric truck

  • Fred Smith is not worried about Amazon

  • RJW LOGISTICS GROUP EXPANDS RETAIL LOGISTICS OPERATION TO DALLAS

  • Outlook 2023: What’s in store for logistics/supply chain?

  • Maersk deploys indoor drones for warehouse inventory counts

Now Playing on DCV-TV

5afe63a5 7125 4318 b851 1e5738df1c91

Patterson Fan Co. | HVLS V-Series Ceiling Fan | Staging Area Air Movement

DCV-TV 4: Viewer Contributed
The Patterson V-Series is a high-volume, low-speed industrial ceiling fan that is designed to circulate a lot of air at a very low speed. These fans, ranging in diameters of 8’ all the way to 24’, are perfect for large, open spaces such as staging and shipping areas. One 24’ fan can generate a cooling effect of 6 –...

FEATURED WHITE PAPERS

  • The five best applications for robotic lift trucks in warehouse environments

  • Fulfillment Facility Improved Efficiencies by 4x

  • 3PLs: Complete Orders Faster with Flexible Automation

  • Reusable Packaging for the New Wave of Supply Chain Automation

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing