We know you know this, but here it is anyway: Tuesday, November 3, 2020 is election day in the United States.
You may have thought that drivers don’t have much to do with politics. But if you’ve been paying attention lately, your perspective has likely changed.
In just one state, a raging battle threatens to do one of two things: run the rideshare and delivery companies out of business, or force those companies to change their business models and make the people who work for them employees.
In this blog post, we’re going to tell you more about what’s going on in the biggest political battle being waged over the gig economy’s way of doing business. We’ll also discuss how this could affect all drivers, everywhere, depending on what happens and how the battle lines are drawn in other states.
We’re pro-driver here at Gridwise, but we’re also nonpartisan—meaning, we would never tell you who to vote for.
What we will do is make sure you get all the information you need to select the candidates and initiatives who truly represent your individual interests. With that in mind, here’s what we’ve got for you in this post:
- California’s showdown over driver classification: AB5 and Proposition 22
- What the outcome of the California election will mean to drivers everywhere
- Both sides of the story: How Democrats and Republicans are likely to view this issue
- What this means in your local (and the national) election
- Some cool election day happenings
California’s showdown over driver classification: AB5 and Proposition 22
About a year ago, California’s state legislature passed a law known as Assembly Bill 5, or AB5 for short. By precisely defining the differences between independent contractors and employees, the bill forced the rideshare and delivery companies to make their drivers employees.
In this blog post from June 2020, we discussed exactly what this means, and why the companies weren’t/aren’t willing to go along with the bill.
AB5 went into effect on January 1, 2020. The companies ignored it. State officials dragged the companies to court, and won. Then, there was an injunction against enforcing the law because the companies came up with a new plan.
California has what are known as ballot measures, or propositions. As long as virtually any group can get enough signatures to bring the measure to a vote, they can put forth a proposition. If it passes by a majority of California’s voters, it becomes law.
With lawyers shrewd enough to know this, and how to make it happen, Uber, Lyft, DoorDash and Instacart joined forces and created a ballot measure known as Proposition 22.
The companies gathered the necessary signatures, got the measure on the ballot, and have been campaigning for it all summer and into the fall. With ads and other persuasive tools, they have spent in excess of $184 million to get the measure passed.
Here is the breakdown, showing what each company contributed toward the cause, and the percentage of the entire amount :
Proposition 22 will be on the California ballot on November 3, 2020. If it passes, AB5 will no longer apply to rideshare and delivery companies. Instead of the restrictions spelled out in AB5, the companies would abide by the policies described in Proposition 22. You can find out more about those policies in this blog article.
If Prop 22 doesn’t pass, the companies will have to abide by the law as defined in AB5. Drivers would become employees, and companies would have to pay benefits such as unemployment insurance, health insurance, paid time off, and disability insurance.
Obviously, this would be a massive expense for the gig companies. Would it be viable for them to continue to operate in California? When they were initially told they had to comply with AB5, they threatened to stop doing business in the state. If you want to know more about that situation, take a look at this blog article.
What is the likelihood of Proposition 22 passing? According to this September 2020 survey of likely voters, taken by UC Berkeley, 39 percent said they would vote yes, 36 percent said they would vote no, and 25 percent were still undecided.
What the outcome of the California election will mean to drivers everywhere
You may be curious about why we’ve been devoting so many blog posts to California, and the answer is this: because there is absolutely no doubt that whatever happens will have profound effects on the rest of the country.
California isn’t the only place where the government has intervened in the payment of drivers who work for gig economy companies. In New York City, a minimum wage of $17.22 per hour was set by the Taxi and Limousine Commission (TLC). That sounds like a great deal, right? For those who were already driving, yes.
But for people who might want to start driving in New York City, it wasn’t such a great deal. The TLC also restricted the number of Uber and Lyft drivers who could drive in the city. So, in the biggest market in the United States, many people were locked out of the gig economy.
Also, most drivers realized that even though they were finally getting a fair minimum wage, it wasn’t for the best of reasons.
Along with rideshare, the TLC oversees the Yellow Taxi and Black Car companies in New York. By restricting the number of drivers, and making Uber and Lyft pay a minimum wage, the TLC was protecting the other industries under its jurisdiction.
One city that has a minimum wage law in effect for drivers is Seattle. In this case, the city’s government officials researched what drivers were making, determined how much they should be making, and developed a policy that set the minimum wage to $16.39 per hour. This went into effect on October 9, 2020, with the mayor’s signature.
Many drivers liked this, for sure, but the companies? Not so much. Uber referred to what happened in New York, where prices for rides went up 30 percent and thousands of drivers could no longer work, and warned Seattle against taking this similar step.
No one knows how the Seattle situation will pan out quite yet since the law was enacted so recently. It shows, however, that while California is the biggest battle being waged, it’s not the only battle.
Drivers are divided on this issue. Many have said they prefer to remain independent contractors, while others would rather be employees. This blog post covers more details about that difference of opinion, and shows some interesting driver survey results.
It’s worth repeating that what happens in California is not limited to drivers in that state alone. It can happen anywhere—including where you live.
Both sides of the story: How Democrats and Republicans are likely to view this issue
In our starkly divided country, the attitude toward government intervention in business, including the rideshare and delivery industry, is almost always divided along party lines. California, New York (State and City), and Seattle (and the State of Washington) are currently governed by officials who are members of the Democratic Party.
Traditionally, that has been the party best known for defending workers’ rights. So, it makes sense that the first efforts to regulate the companies have come out of mostly cities and states governed by Democrats.
The Democrats’ history as the champion for unions goes back to the mid-nineteenth century. At that time, when it came to voting, most working class people automatically went along with what their Democrat-oriented unions told them to do. In general, Democratic Party leaders will tend to support government intervention to level the playing field in favor of workers.
Since California, Seattle, and New York are all governed by Democrats, it’s no surprise to see the measures that officials in those places have taken to regulate the companies.
As a matter of policy, these leaders are unhappy with how the rideshare and delivery companies treat their drivers and shoppers, so they would probably support efforts to form a drivers’ union. This article from May 2020 discusses how some drivers and driver advocates have been attempting to do just that.
At the very least, the Democratic Party’s tendency would be to have the government regulate the companies so drivers would be paid uniformly, as well as be supported by the safety net of company-provided benefits.
Republicans, conversely, tend to side with corporations in disputes like the one emerging between gig companies and workers. Republicans also emphasize the idea of individual achievement. They would argue that if government-imposed restrictions make it financially impossible for the companies to do business, this would hurt drivers and passengers. They would most certainly not support the formation of driver unions.
For the most part, Republicans believe the economy should be allowed to operate with as little government interference as possible. Republican policies lean more toward deregulation, which typically conflicts with the interests of proponents of fair labor practices and environmental protection. Yet these policies also have advocates among entrepreneurs and companies alike.
There are reasons why these groups tend to favor Republican policies. One is the theory that if the companies are not burdened by excessive regulations, then there will be more jobs, more business, and more economic growth.
The ideal, of course, is to strike a balance between the two extremes, which often happens once disputes between the two sides get hammered out.
The way you look at the employee/contractor controversy is likely to determine the way you want to vote. Remember that even local representatives can have a huge effect on the viability of the gig economy in your area. This is shown by the local policies enacted in New York City and Seattle. It’s likely that this controversy will be coming to your town, too, before very long.
What this means in your local (and the national) election
As mentioned earlier, we have no interest in telling you how to vote.
We’ve presented some facts that are likely to get you thinking about where you stand, or at least we hope you will consider them as fodder for contemplation. There are drivers with passionate beliefs about each side of the employee/contractor dispute, and other drivers whose political thinking is aligned with the beliefs of their chosen political party for other reasons.
So, if you were thinking about sitting this election out, please don’t. There’s a lot at stake, and it’s up to you to ensure that you’re fairly represented by candidates who will advocate for your interests.
Some cool election day happenings
How awesome would it be for the rideshare companies to offer discounted rides to the polls on election day? Well, they’re doing exactly that nationwide.
Now, depending on your perspective, that can be a really great thing. But…in California, news reports and website articles say Uber and Lyft are hyping Prop 22 to their riders, by mentioning in the app how important it is for riders to vote “yes.”
Instacart, not to be left out of this process, has shoppers delivering election materials along with the groceries they bring to customers’ doorsteps. “The whole thing is just very, very dystopian and absurd and alarming,” says Vanessa Bain, an Instacart shopper and cofounder of a nonprofit called Gig Workers Collective.
Let’s hope they won’t refuse rides to “no” voters, and that they’re not even going to actually ask how their customers are going to vote!
In addition, because voting in person often results in long lines outside polling places, Uber partnered with the nonprofit group, Pizza to the Polls to get free slices of pizza to hungry people who are waiting to vote (with Uber Eats performing the deliveries).
Yet another incentive to vote is being provided by Lyft, which has partnered with Starbucks to provide free one-way trips to the polls for its workers.
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