Uber, Lyft, and DoorDash file California ballot initiative to define their drivers as independent contractors and enact labor policies
Representatives of DoorDash, Lyft, and Uber filed a ballot initiative in California for the election on November 3, 2020, in response to the passage of Assembly Bill 5 (AB 5). The ballot measure would consider app-based drivers to be independent contractors and not employees or agents. Therefore, the ballot measure would override AB 5, signed in September 2019, on the question of whether workers are employees or independent contractors.
AB 5 established a three-factor test to decide a worker’s status as an independent contractor. The three-factor test requires that (a) the worker is free from the hiring company’s control and direction in the performance of work; (b) the worker is doing work that is outside the company’s usual course of business; and (c) the worker is engaged in an established trade, occupation, or business of the same nature as the work performed.
Responding to AB 5, Tony West, the chief legal officer for Uber, stated, “”Because we continue to believe drivers are properly classified as independent, and because we’ll continue to be responsive to what the vast majority of drivers tell us they want most—flexibility—drivers will not be automatically reclassified as employees … We expect we will continue to respond to claims of misclassification in arbitration and in court as necessary, just as we do now.”” On September 11, 2019, a class-action lawsuit was filed against Uber, which said, “”Uber has stated that it will not reclassify its drivers [as employees], even though the legislature has clearly intended for Uber to be covered by [AB 5].””
The ballot measure would also enact labor and wage policies specific to app-based drivers and companies, including a net earnings floor based on 120 percent of the state’s or municipality’s minimum wage and 30 cents per mile; a limitation on the hours a driver is permitted to work during a 24-hour period; healthcare subsidies; occupational accident insurance; and accidental death insurance. The proposal would require the companies to develop anti-discrimination and sexual harassment policies. The proposed net earnings floor and healthcare subsidies would be based on a worker’s engaged time, which is defined as the time between accepting a request and completing the request. Asm. Lorena Gonzalez (D-80), who authored AB 5, criticized the concept of engaged time, saying, “”Their wage floor suggests if If I’m a cashier, I’m only paid while there’s a customer in my line, not when I’m waiting for the next customer.”” She also said the benefits of being considered an employee outweigh what the initiative would provide to app-based drivers.
DoorDash, Lyft, and Uber have each placed $30 million into campaign accounts to fund the ballot initiative campaign. Brandon Castillo, a spokesperson for the campaign supporting the initiative, stated, “”We’re going to spend what it takes to win. It’s been widely reported that three of the companies already shifted $90 million, but we’re still in the early phases. The bottom line is: We’re committed to passing this.””
The next step for the campaign is to receive ballot language from Attorney General Xavier Becerra (D). He is expected to release language on January 2, 2020, which would allow the campaign to begin collecting the 623,212 valid signatures needed. The deadline for signature verification is June 25, 2020; however, the recommended deadline to file signature petitions for verification using a random sample is April 21.