By: Kisha Wilson
The Gig economy has exploded since online platforms like Uber, Lyft, Instacart, DoorDash and Postmates emerged providing workers with numerous new options for flexible work with a higher degree of autonomy. To date, the gig economy is approximately 36% of the size of the traditional labor force. However, this new wave of gig work has also posed some serious questions about the rights of workers. Many gig workers are currently classified as independent contractors which allows for flexibility and autonomy but does not provide the same level of protections and benefits that employees receive. As such, the tension between the profitability of the platforms and the rights of workers continues to be debated in many states across the country.
In November 2020, California voters passed a ballot measure, Proposition 22 (“Prop 22”), also known as the “Protect App-Based Drivers and Services Act.” Prop 22 was designed to solidify the classification of online platform gig workers as contractors and exempt the platforms from having to validate the classification of workers using the ABC test outlined in California Assembly Bill 5 (“AB5”). Online platforms providers Uber, Lyft, DoorDash, and Postmates spent a record hundreds of millions of dollars on the Prop 22 campaign.
The platforms argued that Prop 22 was a necessary measure to prevent the loss of a significant number of gig worker jobs and also to prevent price increases for customers. Labor law advocates argued that while Prop 22 does provide some benefits to drivers, it ultimately reduces pay and needed benefits for gig workers and robs them of the protections of many labor laws. On January 12, 2021, plaintiffs sued the State of California alleging that Prop 22 violates the California constitution. The suit, Castellanos v. California, was filed in the California Supreme Court, but after the California Supreme Court declined a direct review, the plaintiffs refiled in a lower court on February 11, 2021.
Though Prop 22 confers certain new benefits upon gig workers, this measure is likely to do a lot more harm than good for four main reasons. First, it fails to adequately protect and provide the full spectrum of benefits to gig workers who would otherwise not meet the AB5 test to be classified as independent contractors. The Coronavirus pandemic has illuminated and exacerbated the threats to U.S. economic stability and how benefits like comprehensive paid family and medical leave and paid sick leave policies support not only workers but the public overall. Prop 22 forces gig workers to rely on the benevolence of online platforms in the areas where Prop 22 is silent as opposed to the legal protections that are conferred to all workers classified as employees.
Second, contrary to what the online platforms led voters to believe, Prop 22 did not stop the online platforms from increasing prices, nor does it guarantee workers will make more money. One of the major claims that the online platforms made during the Prop 22 campaign was that Prop 22 was necessary to avoid price increases; however, since Prop 22 has passed, nearly all of the online platforms have passed the cost of Prop 22 to consumers through price increases. Additionally, some studies show that because of the way that the hours are contemplated, many workers will end up losing income despite the minimum wage requirements. In fact, a study from U.C. Berkley’s Labor Center shows that Prop 22 only guarantees workers $5.64/hour, which is far less than 120% of California’s minimum wage promised by Prop 22, due to loopholes.
Third, it advances the notion that corporations can more directly influence an already unbalanced power dynamic to pay their way around laws that aren’t profitable to them while bypassing legislative bodies. Online platforms like Uber, Lyft, Instacart, DoorDash and Postmates spent more the 200 million dollars on the Prop 22 ballot measure making it one of the most expensive ballot initiatives in California’s history.
The amount spent highlights an imbalance of power between the workers and their platforms. Prop 22 exposes the influence companies can exert in order to create carveouts that exclude them from protecting workers the way other companies and industries must. In Castellanos v. California, the plaintiffs argue that the way that workers compensation is regulated is embedded in the California constitution and that the passage of Prop 22 was an unconstitutional effort to bypass the legislative process. If Prop 22 is ruled constitutional, it sets a dangerous precedent for all workers by normalizing companies focusing on policy change as opposed to making things fairer for their workers under the current policies.
Fourth, rules like Prop 22 set the precedent for online platforms to try to overcome international labor standards which could threaten gig workers on a global scale. Uber has already pushed a white paper seeking to advance Prop 22 style policies in the EU. Labor advocates and academic researchers, such as Fairwork, an academic research project aimed at fairness for workers, assert that these measures only “legitimize a lower level of protection for workers than most European workers benefit from.” Though Uber has recently had several losses on similar issues abroad, including the February 19th U.K. Supreme Court’s conclusion that Uber drivers are workers and not self-employed, Prop 22 still increases the massive influence the platforms already have on the gig worker economy and the potential that gig workers around the world may have more to lose in the future.
It is unlikely that workers will be able to stop measures such as Prop 22 given the enormous influence online platforms have over the gig economy. But as the gig economy continues to grow, an increasing number of workers will be impacted by rules like Prop 22 that have the potential to be passed throughout the country and the world. Regardless of the outcome of Castellanos v. California, the U.S. must properly assess the risk of eliminating major employment protections from the entirety of an emerging and fast-growing industry.
Student Bio: Kisha Wilson is a third-year evening law student at Suffolk University Law School. She is a staffer on the Journal of High Technology Law and a Legal Innovation & Technology (LIT) Fellow in the LIT Lab at Suffolk University Law School. Kisha received a Bachelor of Arts in International Relations from Boston University.
Disclaimer: The views expressed in this blog are the views of the author alone and do not represent the views of JHTL or Suffolk University Law School.
