California, on Tuesday night, passed a new legislation despite being criticized and openly rebuked by nearly 60% of San Francisco residents.
The new law, called Proposition 22, would allow companies such as Uber and Lyft to classify their app-based drivers as independent contractors and not as employees, exempting them from benefits and job protections.
Support for the proposition mainly came from a massive income of cash from Uber, Lyft, DoorDash, Postmates, and Instacart, which came together to accumulate a staggering $205 million. The amount of support is the largest received in any single California county.
Despite the criticisms, only nine out of 58 California counties voted against Proposition 22, resulting in the law passing with a tally of 58-42.
The proposition has caused multiple arguments as both Uber and Lyft announced they would be stopping operations within California if the law did not pass. Southern California residents also received fake “progressive mailers” that several fake organizations sent, the San Francisco Gate reported.
Democratic presidential candidate Joe Biden and running mate Senator Kamala Harris have expressed their disagreement with the proposition. Senators Bernie Sanders and Elizabeth Warren also opposed the passing of the law.
The companies, most of which are located in San Franciso, said the new legislation allows drivers to have more flexibility and to work much more efficiently.
The transportation firms will now be able to avoid several hundreds of millions of dollars in labor expenses due to the passing of Proposition 22.
Several groups who opposed the law’s passing gathered nearly $20 million in their campaign against the proposition. Leaders of the labor groups said the legislation went against workers’ rights.
The amount of finances spent on campaigning for and against the proposition set a record-high for a California referendum. The pro-law campaign used multiple advertisements, including mailers, text messages, and other media, to entice the public to vote yes. On the other hand, the opposition extended their cause to millions of union members across the state.
Some companies also utilized their services to show ads to their drivers and passengers. Some Uber drivers filed lawsuits claiming that some of the material displayed on the app were coercive. However, a Supreme Court judge rejected the arguments and dismissed the claims.
Uber and Lyft’s threat of ending operations in California should Proposition 22 failed to pass sits on the notion that allowing drivers to be considered employees would result in far higher rates and longer waiting times. They added they would be able to hire far fewer drivers than what they would otherwise be capable of, the San Francisco Chronicle reported. Both companies also said that their app-based drivers supported working independently, with a vast majority expressing their support for the proposition.
In a statement, Uber said California had expressed its support for improving independent work. It added that drivers based in the state would soon earn a guaranteed minimum income standard of 120% of the minimum wage. The company also listed the benefits it would provide drivers, including health care, accident insurance, and several others.
University of California’s Ken Jacobs said that gig companies used misleading information to confuse residents into voting for the proposition. He claims they used “deceptive design” and a large amount of money to send out the companies’ messages. The rideshare companies threatened their drivers that if Proposition 22 failed to pass, they would be subjected to a strict schedule.
The promise of higher income than the minimum wage was calculated based on the drivers’ active time, which only include the duration of a trip or en route to a booked passenger’s location. The health care insurance also requires drivers to work at least 15 hours per week, receiving only 50% of the Affordable Health Care Act’s average, the Washington Post reported.