How California’s Prop 22 Affects Uber and Lyft Drivers

On March 13, 2023, a California appeals court voted to uphold Proposition 22.

Also known as the “App-Based Drivers as Contractors and Labor Policies Initiative,” Prop 22 is a ballot initiative passed by California voters in November 2020 that allows companies such as Uber, Lyft, DoorDash, and Instacart to classify their workers as independent contractors rather than employees.

Prop 22 effectively overturned a California state law, known as Assembly Bill 5, which was passed in 2019 and sought to classify many app-based drivers as employees entitled to benefits such as minimum wage, overtime pay, and workers’ compensation.

Prop 22 includes provisions for gig companies to provide certain benefits to their workers, including a minimum earnings guarantee based on “engaged time” (time spent with a passenger or delivery), a healthcare stipend for drivers who work a certain number of hours per week, and occupational accident insurance.

Since its introduction, the proposition has sparked ongoing debates about the rights and employment benefits of app-based workers.

Supporters of Prop 22 argue that it allows rideshare and delivery drivers to maintain the flexibility and independence they desire. In contrast, opponents argue that it strips them of important protections and benefits that are given to full-time employees.

What Are the Benefits of Prop 22?

App-based companies like Uber and Lyft argue that Prop 22 provides several benefits for drivers and food delivery workers. In a statement, Uber cited several surveys showing an overwhelming majority of app-based drivers support the proposition and choose to work as independent contractors. Here are some benefits of Prop 22 as claimed:

Flexibility

Prop 22 allows app-based drivers and delivery workers to remain classified as independent contractors, which means they can continue to set their own schedules and choose when and where they work. Supporters argue that this flexibility is one of the main reasons why people choose to work in the gig economy.

Earnings guarantee

Prop 22 requires gig companies to provide drivers and delivery workers with a guaranteed minimum earnings level based on “engaged time” (time spent with a passenger or delivery), which is calculated to be 120% of the local minimum wage.

Healthcare benefits

Prop 22 requires companies to provide a healthcare stipend to drivers who work at least 15 hours per week. The amount varies depending on the number of hours worked and is calculated based on the average amount that employers in California contribute to their employees’ healthcare.

Occupational accident insurance

Prop 22 requires companies to provide occupational accident coverage to cover medical expenses and lost income for app-based workers who are injured on the job.

Why Are Some Drivers Against Prop 22?

While major gig companies supported Prop 22, some groups are voicing their opinion against the proposition. In a statement released by SEIU California, Uber and Lyft driver Mike Robinson said, “We still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights, and the right of the legislature to pass laws affecting workers’ compensation and drivers’ ability to make ends meet amid the skyrocketing cost of gas, food and housing.”

Here are some reasons why some app-based workers and labor unions are against Prop 22:

Lack of benefits

Opponents of Prop 22 argue that the benefits provided by the proposition are inadequate compared to those received by regular, full-time employees. For example, the healthcare subsidies provided by Prop 22 are based on the average amount that employers in California contribute to their employees’ healthcare, which may be lower than the actual cost of healthcare. Opponents also argue that gig workers should be entitled to other benefits, such as paid sick time and unemployment insurance, which are usually given to traditional employees.

Misclassification

Opponents of Prop 22 argue that the proposition allows companies to continue misclassifying gig workers as independent contractors, even if they should be classified as employees under California law. They argue that misclassification allows companies to avoid providing workers with important labor protections and benefits, such as minimum wage for total work time and workers’ compensation.

Reduced earnings

Some drivers argue that Prop 22 leads to lower wages, particularly for full-time drivers. This is because Prop 22 does not require gig companies to pay drivers for time spent waiting for ride requests or deliveries, which can make up a significant portion of a driver’s time on the clock.

Lack of collective bargaining rights

Opponents of Prop 22 argued that it restricts drivers’ ability to collectively bargain for better wages and working conditions. This is because Prop 22 includes a provision that requires a 7/8th supermajority of the California Legislature to amend it, effectively making it very difficult to make changes to the law.

What’s Next?

The fight against Prop 22 isn’t over yet. The Service Employees International Union, along with gig workers, is expected to appeal the decision to the California Supreme Court.

Uber and Lyft Accident Lawyer

With countless hours spent on the road, getting into an Uber or Lyft accident is becoming increasingly common. If you were injured as an Uber or Lyft driver or passenger, our California Uber/Lyft accident lawyer can help you file a claim against the rideshare company or the other driver involved. We are experienced in rideshare laws and know the ins and outs of third-party liability insurance. Call us at (844) 223-9975 or send us a message to schedule a free consultation.

• We always offer a free consultation
• We never ask for upfront legal fees
• We represent accident victims, not the insurance company