Uber and Lyft drivers will be allowed to continue driving in the state of California after voters approved Proposition 22, which defined app-based drivers as independent contractors, not employees. The initiative leads 57.9% to 42.1% with more than 10 million votes counted, according to figures released by the Secretary of State's Office.
Prop. 22 came about amid a long, drawn-out battle between rideshare/gig companies and the California legislature after it passed AB 5, which sought to establish firmer rules when it came to independent contractors in the state.
According to AB 5, in order to be classified as an independent contractor, the worker:
- Must be free from the hiring company's control and direction in the performance of the work
- Is doing work that is normally outside the company's usual course of business
- Is engaged in an established trade, occupation or business of the same nature of the work performed.
That three-pronged test ensured that people working for 'gig' apps like Lyft, Uber, and Doordash would become eligible for benefits normally afforded to a full-time employee under state labor laws (such as health benefits, overtime and sick leave). In August, the Superior Court of San Francisco ruled that both Uber and Lyft were violating AB 5 by misclassifying their workers. That led rideshare companies to get Prop. 22 on your ballot this year.
Now, Prop. 22 changes AB 5 to reclassify app-based drivers as independent contractors and enacts new labor and wage practices specific to app-based drivers and companies. Those changes include:
- Drivers would be eligible for payments in the difference between a worker's net earnings (excluding tips) and a net earnings floor that would be based on 120% of the minimum wage while the driver was engaged in a ride. Drivers would also receive 30 cents per mile while working for the app-based program (that amount will be adjusted with inflation after 2021).
- Drivers would no longer be allowed to work more than 12 hours during a 24-hour period unless that driver has been logged off for at least 6 hours.
- Drivers who average 25 hours per week every quarter will be eligible for subsidies that are equal to 82% of the average California Covered premium every month. (Drivers who average between 15 and 25 hours per week will be eligible for 41% of the average premium).
- Companies will make occupational accident insurance to cover medical expenses and lost income (at least $1 million) resulting from any injuries suffered while working for the company.
- Eligibility for disability payments
- Accidental death insurance for the driver's spouse, children or other dependents if they die while using the app.
- The proposition also defines the driver's engaged time as the time between accepting a service request and completing the request.
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