At the election on November 3, 2020, Californians will decide a ballot initiative that addresses whether app-based drivers should be classified as independent contractors.
In September 2019, Gov. Gavin Newsom (D) signed AB 5, which established criteria to determine whether a worker is an employee or independent contractor. Uber, Lyft, and Doordash proposed a ballot initiative that would exempt app-based workers from AB 5. The ballot initiative would also adopt labor and wage policies specific to app-based companies, including a net earnings floor, healthcare subsidies, and occupational accident insurance for workers. Examples of companies that hire app-based drivers include Uber Technologies, Lyft, DoorDash, Instacart, and Postmates. The ballot measure would not affect how AB 5 is applied to other types of workers.
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.
Tony West, the chief legal officer for Uber, and John Zimmer, president of Lyft, have both said that their companies continue to operate without reclassifying their workers as employees. California Attorney General Xavier Becerra (D), along with Los Angeles City Attorney Mike Feuer, San Diego City Attorney Mara Elliott, and San Francisco City Attorney Dennis Herrera, sued the rideshare companies on May 5, 2020, arguing their workers needed to be reclassified as employees. Uber and Postmates launched their own legal complaint, contending that AB 5 violated their constitutional rights and their workers’ constitutional rights. Courts have not yet decided either case.
Through May 17, 2020, the campaign Protect App-Based Drivers And Services, which is supporting the ballot initiative, raised $110.69 million, including $30.47 million from Lyft, Inc., $30.23 million from Uber Technologies, Inc., and $30 million from DoorDash, Inc. Instacart and Postmates, Inc. also contributed $10 million each.
The California Labor Federation, AFL-CIO, organized the Coalition to Protect Riders and Drivers to campaign against the ballot initiative. The campaign raised $690,000, with the Transport Workers Union of America providing $500,000.
Protect App-Based Drivers And Services filed 987,813 signatures. At least 623,212 (63.09 percent) of the signatures needed to be valid. On May 22, 2020, the office of Secretary of State Alex Padilla announced that a random sample of signatures projected that 77.50 percent were valid, which amounts to a projected 765,555 valid signatures.
The ballot initiative is the sixth citizen-initiated measure to qualify for the November ballot in California. Four citizen-initiated measures are pending signature verification. At least two additional campaigns have decided against filing signatures due to the coronavirus pandemic and will instead file signatures this summer to appear on the 2022 ballot. The California State Legislature can also place measures on the ballot through June 25, 2020.