Date: November 15, 2023
Contact: Molly Weedn, (415) 209-4217
Economic Analysis: Overturning Proposition 22 Could Cost California More Than 1.3 Million App-Based Jobs
Number of app-based drivers could be reduced by at least 93 percent if drivers are forced to be classified as employees instead of independent contractors
Today, the Berkeley Research Group (BRG) released a new economic analysis highlighting the major loss of app-based work that could hit California if the state’s Supreme Court overturns Proposition 22–supported by nearly 60 percent of voters in 2020. A key finding from the analysis demonstrates that if drivers are forced to be classified as employees instead of independent contractors, more than 1.3 million app-based earning opportunities would be eliminated, a reduction of at least 93%.
The updated analysis was conducted by Dr. William Hamm, former head of the state’s non-partisan Legislative Analyst’s Office, and Dr. David Lewin, professor of management, human resources and organizational behavior at the UCLA Anderson School of Management.
Findings from the updated report:
- In 2021, more than 1.4 million California app-based drivers earned with the four network platforms – DoorDash, Instacart, Lyft, and Uber.
- Requiring drivers to become full-time employees would reduce the number of needed driver jobs from 1,444,315 to 98,135 – a reduction of more than 1.3 million app-based driver jobs.
- This is almost identical to the conclusion BRG reached using 2019 data prior to the COVID-19 pandemic.
- The majority of drivers earn on these platforms in a limited part time capacity to supplement their income and other work. In 2021, the average driver was engaged on a platform 2.7 hours per week.
“It could be devastating for me and my family if Prop 22 is overturned,” said Jameela Toups-West, Bay Area driver. “I depend on the flexibility and independence of app-based work and the earnings and benefits that Prop 22 provides are essential. I know that many of my fellow drivers feel the same way. The court should uphold Prop 22.”
Prop 22 was upheld by the California Court of Appeal earlier this year, after which special interest opponents petitioned the California Supreme Court for review.
“Nearly 10 million Californians voted in support of Prop 22,” said David Cruz, President of LULAC Council #3288. “This effort to rob millions of Californians of earning opportunities and circumvent the will of the voters will have long lasting ramifications for not just app-based drivers and customers but for our democratic system.”
“Third-party delivery apps have opened up a business opportunity that we were previously missing out on,” said Yuta Tsunoda, M Cafe, Los Angeles. “App-based delivery has opened up a huge new door because we don’t have delivery personnel on hand so it has been a win-win situation.”
About Protect App-Based Drivers & Services (PADS) Coalition
The Protect App-Based Drivers & Services (PADS) coalition, formerly the Yes on Prop 22 coalition, is continuing to engage to ensure the will of California voters is upheld; to protect access to independent, app-based jobs; and to preserve the availability, affordability and reliability of on-demand app-based rideshare and delivery services that are essential to Californians and our economy.
Proposition 22 was supported by nearly 60% of California voters, 120,000 drivers, and a diverse coalition of more than 140 groups including social justice, senior, community, business, veterans and many others.