By Southern Californian News Group Editorial Board
Since the California Supreme Court in 2018 handed down its Dynamex decision, the state has been marching toward an inevitable showdown with app-based transportation firms such as Uber, Lyft and DoorDash. Those companies have built business models around the type of independent-contractor labor the court decision has largely banned.
Voters will determine the outcome of the feud — and, most likely, the continued operation of these services in California — in the Nov. 3 election. Sponsored by those companies, Proposition 22 would exempt app-based transportation and delivery drivers from the follow-up legislation that enshrined the court decision into law.
Assembly Bill 5 codified the court’s strict “ABC test” for determining when a company is permitted to use freelance labor — but only after influential old-line industries (attorneys, real-estate agents, insurance salespeople, etc.) were able to carve out exemptions. App-based transportation companies had always been the law’s target, so lawmakers have refused to provide them with similar relief.
AB5’s backers, primarily labor unions and their advocates in the Capitol, are upset that big technology companies can essentially bypass the state’s inflexible labor rules — the product of a bygone era, when the factory floor and office cubicles were the dominant workplaces. Supporters are trying to use government to hold back inexorable economic changes.
Instead of leading to a new era of worker prosperity, AB5 has, since its implementation in January, led to unprecedented job losses as companies that rely on freelancers have slashed payrolls or shifted jobs outside of California.
The law has harmed California workers at a time when jobs are scarce and it has threatened the future of technology companies that the state relies upon for its revenues — even as state officials complain about declining budgets.
Because of the law’s deleterious effect on many industries, including our own, this editorial board has called for the total repeal of AB5. We don’t like legislating by exemption. Nevertheless, the more exemptions to this legislative monstrosity, the better. Real jobs and services are at risk.
AB5 also is an affront to freedom of contract. The vast majority of rideshare drivers do not want to be full-time or even part-time employees and saddled to one company. They like their flexibility and mostly work under 15 hours a week to supplement other jobs and educational opportunities.
For many Californians, it’s a useful and convenient way to make additional money.
According to the nonpartisan Legislative Analyst’s Office, “Most drivers probably make between $11 and $16 per hour.” In December, the LAO estimated “between 300,000 and 400,000 Californians provide rides or deliveries each month.”
Not only would Proposition 22 allow independent drivers to keep working, but it provides a suite of tangible benefits including wage guarantees and health-care contributions. The measure offers a portable benefit model that other industries can emulate. Those truly concerned about worker benefits should applaud these provisions.
The measure comes against the backdrop of a recent court decision that would force these companies to begin following AB5 even before voters have their say in the matter. The companies say that would prompt at least a temporary pull-out from California, as they retool their model into a smaller and costlier service with far fewer drivers. That would be a shame for drivers and consumers.
With the Legislature offering no alternative to the opportunity-destroying law as it relates to app-based transportation companies, this measure is key to preserving as many opportunities for consumers and drivers as possible.
We urge a “yes” vote on Proposition 22.