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  1. TopTop #1
    Barry's Avatar
    Founder & Moderator

    Proposition 22: App-based delivery services

    PD Editorial: Yes on 22: Preserve California’s gig economy
    September 11, 2020

    Proposition 22 is shaping up as a ballot-box version of the gunfight at the OK Corral. Instead of the Clantons and Earps, this feud pits organized labor against Uber, Lyft and other app-based service companies.

    While any shooting will be of the rhetorical variety, the outcome may determine whether the gig economy survives in the state where it got its start. And the ripple effects could help shape the future of the workplace for everyone in California.

    Proposition 22 would allow app-based transportation and delivery companies to continue using independent contractors — drivers who set their own work hours and determine which assignments they accept and reject.

    The app-based business model was thrown into question by a 2018 state Supreme Court ruling that imposed a strict new test for determining whether someone is an independent contractor or a statutory employee. The ruling applied wage and hour rules to many people who had been classified, and in some cases misclassified, as independent contractors.

    State lawmakers followed up in 2019 with legislation to codify the Supreme Court decision. But Assembly Bill 5 went further, requiring employers to provide benefits that weren’t included in the court ruling, among them unemployment insurance and workers compensation.

    The primary targets of AB 5 were Uber, Lyft and other gig economy companies. And the advocates were unions eager to organize their drivers.

    Uber and Lyft say they will leave California if their business model is outlawed.

    However, the impacts of AB 5 extend far beyond ridesharing and meal deliveries. An estimated 4 million Californians were doing gig work when the bill passed, many of them supplementing income from other jobs.

    Some companies laid off contractors or stopped using California-based contractors when AB 5 took effect on Jan 1.

    We’ve written about the threat to our own industry, which has relied on independent contractors to deliver newspapers for generations. With newspapers already struggling, AB 5 would put some publications out of business. Others would publish less frequently, raise prices or reduce their home delivery zones.

    AB 323, which passed in this year’s legislative session, grants newspapers a one-year exemption from the law.

    AB 5 included permanent exemptions for 56 occupations, ranging from accountants and architects to web designers and yard cleaners.

    This year brought three dozen follow-up bills seeking exemptions — evidence that a one-size-fit-all approach doesn’t work in an evolving workplace.

    AB 2257 passed, creating

    100-plus new exemptions, ranging from youth sports officials and translators to real estate appraisers and recording artists. Good for them, but exemption by legislation only creates a new line of work for Sacramento lobbyists.

    Proposition 22 only affects certain app-based companies, so it’s another symptom rather than a cure. But it promisess new benefits for drivers, including a guarantee of at least $21 an hour in wages and insurance for on-the-job injuries.

    Approving Proposition 22 would send a clear signal to Sacramento that Californians want ride shares and other app-based services to stay, and they want people to have the option of setting their own hours around other jobs, school or family obligations.

    Call it moonlighting or a side hustle or entrepreneurship, millions of Californians have found a new source of income in the gig economy. Don’t take it away from them. The Press Democrat recommends a yes vote on Proposition 22.

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  2. TopTop #2
    Barry's Avatar
    Founder & Moderator

    Re: Proposition 22: App-based delivery services

    Editorial: Don’t stifle the gig economy, vote yes on California Prop. 22
    Chronicle Editorial Board Sep. 13, 2020 Updated: Sep. 15, 2020

    Proposition 22 is a battle between two determined and equally unappealing combatants. Proponents consist of the gig economy companies — Uber, Lyft, DoorDash among them — that are pouring $180 million into a campaign to dictate how they would be regulated on workplace issues. Opponents are the labor unions and the politicians they control, who refused to come up with a reasonable compromise in Sacramento.

    It’s hubris versus hubris, with voters left to make a binary choice in what should be a nuanced policy that would allow the ride-hail and delivery companies to keep rolling in a way that would increase driver pay and protections while acknowledging that their business does not fit within the realm of traditional employment.

    As imperfect as it may be in many regards, Prop. 22 at least makes an attempt at striking that balance — and will keep the app-based, ride-hail and delivery services operating in California. The legislative recalcitrance and lawsuits from labor-beholden politicians in the state capital, San Francisco and elsewhere give us no confidence that a reasonable solution could be reached if the initiative were to fail.

    The origin of this dispute is important to know:

    The California Supreme Court’s landmark April 2018 decision involving the Dynamex courier and delivery service laid out a severely rigid test for whether workers should be classified as employees or independent contractors. In that case, the usurpation of worker rights was clear and unjust: In 2004, Dynamex reclassified its drivers as independent contractors as a cost-saving measure. The justices made the right call on the case, but went too far.

    In that ruling, the court mandated that a hiring entity must satisfy all three of these criteria to classify a worker as an independent contractor:

    • The worker is free from the “control and direction” of the hiring entity.

    • The worker performs duties that are “outside the usual course” of the hiring entity’s business.

    • The worker is engaged in an “independently established” trade, occupation or business.

    Labor unions quickly pounced on the opportunity to etch those standards into California law, with Assemblywoman Lorena Gonzalez, D-San Diego, doing their bidding as author of Assembly Bill 5. The impracticality of the rigid rules (known as the “ABC test”) for certain endeavors became readily apparent, and interest groups began lining up for exemptions. Some received carve-outs right away (doctors, real-estate agents, hairdressers), others had to keep fighting this year to obtain them (interpreters, musicians and vocalists, youth sports coaches). Full disclosure: California newspapers (including The Chronicle) were among the industries that lobbied for relief from AB5 for newspaper carriers. The Legislature ultimately granted an extension until Jan. 1, 2022, for newspapers to comply with AB5.

    Altogether, more than 100 exemptions have been issued.

    But the process has been anything but rational. At one point, industry advocates seeking an exemption had to fill out an application with labor groups. One veteran legislator told us he had never seen elected officials so willingly delegate decisions to a special interest on a major bill.

    Uber, Lyft, DoorDash and other gig economy companies, outcasts in Sacramento, never quite had a fair chance in the Legislature — and they knew they would have a more sympathetic audience with voters who have become accustomed to the convenience and responsiveness of their operations. They also knew they had no shortage of drivers who would vouch for their preference to be independent contractors.

    And they are independent contractors by any reasonable definition not laid out by the court or politicians. They can decide when they want to work and for how long. They can work for anyone else they choose, including competitors. Most of us in traditional jobs would agree: That is not the generally understood definition of an employer-employee relationship.

    Again, there are points to dislike about Prop. 22. Any change in the law would require a seven-eighths vote of the Legislature, a nearly impossible threshold for anything other than a Mother’s Day resolution. It does guarantee some new benefits for drivers (120% of minimum wage, health-care subsidies, vehicle insurance, occupational accident insurance, limits on driving hours, training programs) but less than the full array of legal protections they would enjoy as employees.

    Under the status quo, with the rigid guidelines of AB5 and court rulings that they apply to these enterprises, there is a genuine risk that ride-hailing would be limited to hours in urban areas where predetermined shifts would be sufficiently lucrative. And there would be fewer opportunities for the majority of drivers who work part-time at hours convenient to them. It’s important to note that these ride-hail companies are not merely an alternative to taxis: They deliver food to homebound seniors, transport patients to and from medical facilities, and support bike-share networks.

    Our preference would have been for our elected representatives to come up with a forward-looking solution in the public interest. AB5 failed to do that. Californians now must choose between two flawed options. Vote yes on Prop. 22.

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  3. TopTop #3
    Barry's Avatar
    Founder & Moderator

    Re: Proposition 22: App-based delivery services

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