CA Supreme Court upholds Prop 22, leaving gig-worker economy in place

SAN FRANCISCO - The California Supreme Court upheld Proposition 22 on Thursday, essentially allowing gig companies such as Uber to maintain their workforce without upholding some of the stricter employee requirements in the State of California.

Gig companies including Uber, Lyft, and DoorDash spent over $200 million to get Prop 22 passed in 2020, according to Lorena Gonzalez, President of the California Federation of Labor Unions, AFL-CIO. This proposition classified all gig workers as independent contractors, thus limiting their rights and benefits.

The number of gig workers in California has increased to 1.4 million Californians since the influx of app-based delivery and rideshare services. Critics of Prop 22 say the gig economy favors companies' ability to make big money without providing appropriate protections for their workers. 

"We are deeply disappointed that the state Supreme Court has allowed tech corporations to buy their way out of basic labor laws despite Proposition 22’s inconsistencies with our state constitution. These companies have upended our social contract, forcing workers and the public to take on the inherent risk created by this work, while they profit. AB 5 granted virtually all California workers the right to be paid for all hours worked, health and safety standards, unemployment insurance, workers' compensation, and the right to organize. Rideshare and delivery drivers deserve those rights as well," said Gonzalez, whose organization represents 1,300 unions with 2.3 million members.

Uber, on the other hand, is touting this decision as a "victory for drivers and democracy." In a blog post, the tech company wrote that the decision protects the independence of drivers from forcing them into "an employment model that they overwhelmingly do not want."

To back up the claim that drivers want Prop 22 in place, Uber cited a 2021 survey of about 1,500 app-based rideshare and food-delivery workers. A large percentage, 87% of respondents, said they were in support of Prop 22. However, of those surveyed, 62% of respondents described themselves as not being very familiar with Prop 22.

The survey did not include any information about what increased benefits and protections might be offered to gig workers who could have been classified as employees under California labor laws. It is unclear if those gig workers would have preferred to be classified as full employees with increased benefits and protections if given the chance.

Gig-based tech company GrubHub laid out exactly how Prop 22 functions for its workers.

"You will have more stability with guaranteed earnings. During active delivery time you are guaranteed to be paid at least 120% of the local minimum wage at your pickup location, plus $.34 per mile compensation driven during active delivery time. And, of course, you will continue to receive 100% of tips."  -- GrubHub

Here's how those numbers work, according to GrubHub:

"For example, let’s say you made one delivery in a week, and the following were true:

• Minimum wage in the pickup location in California is $14 per hour
• Active time for the delivery was 15 minutes (or 0.25 hours)
• Mileage driven for the delivery was 8 miles, and you used your motor vehicle

Your minimum earnings at the end of that pay period would be: ((120% x $14) x 0.25) + ($0.34 x 8) = $6.92.
Your tips do not count toward your minimum earnings. If the customer tipped $3 for this delivery, your total earnings would be $3 + $6.60, or $9.92."