Proposition 22 might be the first of many dominoes to fall against gig workers

Labor disputes between rideshare companies and their workers cause a series of political battles worldwide. Agência Brasil Fotografias via Wikimedia Commons

A multi-million dollar ad push made by Uber, Lyft and Postmates in November 2020 was followed by the passing of Prop 22 in California, leaving the door open for those corporations to keep health care and other benefits from their laborers. The bill may create a ripple effect if similar actions play out in other states or even federally.

In recent years, smartphone convenience apps have aided in forming a new line of laborers known as gig workers. The newfound prominence of e-taxi services such as Uber and food delivery networks like DoorDash has redefined the terms of on-call labor. As such, laborers look to defend their rights while corporations move to maximize their profits.

The ad campaign in support of Prop 22, one that received $200 million in contributions from Uber and its peers, was composed of a series of controversial commercials posing the bill as a progressive, workers-rights-based idea. Television spots featured ordinary people claiming they would be better off as rideshare drivers if the bill passed. In reality, the bill wasn’t exactly what the advertisements suggested it was.

The “Yes on 22” campaign left no record of their commercials on YouTube, but their website header still reads “Save app-based jobs and services.” San Diego’s ABC 10 News reviewed one of the commercials – noting its claim that Assembly Bill 5, which Prop 22 was an amendment to, would “shut down” rideshare services was misleading. The commercials implied AB5 would shut down apps like Uber and Lyft directly, but the decision would depend on each company’s merit.

Critics of Prop 22 were unhappy with the series of commercials that likely influenced the outcome of the vote. Despite pushback during election season, ad spots supporting Prop 22 seem to have given the bill a boost towards its 58.6% margin of voter approval.

“How much does it cost to convince voters an employee is a ‘contractor’ and that providing basic worker protections is an attack on the freedom of Californians to get a cheap ride?” said Gaston Castellanos, a communications representative at OCEA. “The price tag is $200 million spent by gig companies like Uber, Lyft, and others on the pro-Prop 22 campaign.”

The Los Angeles Times reported in 2020 that Uber and Lyft were using their apps to put pro-Prop 22 pop-up advertisements in front of their customers as they were hailing a ride.

“The benefit of using smartphone apps to send messages to riders and drivers proved to be a big campaign advantage,” Castellanos said. “All this was done to protect an abusive business model that forces workers to take on the costs and the risks of generating profits for employers but without rights, protections or benefits.”

The California voter base, one that typically leans into progressive ideas, voted in favor of the Prop 22 bill supported by conservative causes such as the California Taxpayers Association. Owen Yancher via Wikimedia Commons

Prop 22 came as one part of an ordeal of complications between gig corporations and their laborers. Similar legislation has been proposed, debated and voted on elsewhere.

While Uber and Lyft may have pushed through a powerful law in their favor in America’s largest state, they face defeat elsewhere, namely overseas. In February 2021, a court in the United Kingdom ruled that gig companies must treat their laborers with the benefits of an employee, not those of an independent contractor.

“This is a landmark ruling with very broad implications for casual workers across the U.K. labor market,” said Ursula Huws, director at Analytica Social and Economic Research. “The judgment that one becomes a ‘worker’ from the moment of logging on to when one logs off does not just mean that waiting time must be reimbursed for people working for online platforms but also for a large number of other workers on ‘on call’ or ‘zero hours’ contracts working.”

Huws worked as a professor of labor and globalization at the University of Hertfordshire for many years and has published several reports about the workforce and their rights, such as a 2017 research report on the European gig economy.

“The implications of this are that platforms like Uber will have to change their business models to accommodate this,” he said. “This is likely to mean that they will have fewer workers on their books, but those that they do have will have to work much more intensively, bringing the relationship much closer to an employer-employee type one.”

The 2021 U.K. ruling contrasts California’s Prop 22, leaving many wondering which of the two decisions is more likely to spread and become commonplace in other regions.

“The ruling only applies in the U.K., but it is likely that it may be followed in other countries,” Huws said. “Indeed, if Uber finds a successful way to adapt their business model to local circumstances (as they have done, to some extent, in cities like New York), then they may preempt this by rolling out the new model proactively in cities where they want to continue to build their business.”

As many think ahead about which of the two decisions will stand taller, it is important to remember how regional differences play a role. The Los Angeles Times reported that funding for “Yes on 22” dwarfed that of “No on 22.” The same might not happen in another state or at a national level.

Decisions similar to Prop 22 may play out in other states or countries, but the U.K. ruling stands as a sign of contest against gig companies’ plans. Corporations may be willing to spend millions on proposition publicity, but the U.K. decision serves as a reminder that it is not always guaranteed to work.