Big spending by Uber, Lyft wins companies the right to keep treating drivers as contractors

San Francisco buck state trend, opposing Prop. 22 with nearly 60 percent of the vote

Proposition 22, the ballot brainchild of gig companies that sought to continue classifying workers as independent contractors rather than employees, passed handily Tuesday night with the help of a massively expensive campaign.

For months, Yes on 22, the campaign fueled by a record-setting $205 million cash infusion from Uber, Lyft, DoorDash, Instacart and Postmates in support of the measure, painted California mailboxes, television screens and cell phones with splashy ads vying for voter support.

At least some drivers fell on both sides of the issue, and were readily leveraged by each campaign in conflicting press releases, media conferences and public appearances.

“Prop. 22 was successful because it represented the best interests and preferences of hundreds of thousands of app-based drivers across the state, who made their voices heard in the media, on social media and by making extensive voter contacts with millions of Californians,” the Yes on 22 campaign said in a statement. “The campaign assembled a broad coalition of social justice, small business, public safety and consumer advocates that transcended traditional political boundaries.”

The opposition effort, No on 22, was funded with about $20 million from labor unions, and focused on grassroots mobilization and demonstrations in front of tech company headquarters. Opponents said the measure shortchanged workers and threatened their livelihood, undermined the democratic process and allowed corporate interests to write their own laws.

The No on 22 campaign maintained that spending from these tech companies was used to mislead voters, downplaying the negative impact the measure would have on vulnerable workers.

“Gig workers did not lose today, democracy did. When corporations spend hundreds of millions of dollars to write their own labor laws even after our elected officials and public institutions have, numerous times, rejected them, that is a loss for our system of government and working people,” Oakland-based organizing platform Gig Workers Rising said in a statement.

As of Wednesday morning, just over 58 percent of California voters had opted to support Prop. 22, signaling a decisive victory for the gig companies.

San Francisco, however, was an outlier.

As of midnight Wednesday, nearly 60 percent of local ballots were cast against the measure.

A precinct-level results map created by transit advocate Chris Arvin shows the vast majority of areas within the seven-by-seven mile city voted against the exemption, despite the companies being headquartered here in San Francisco.

Some 40 percent of local voters did vote in favor of Prop. 22, however.

Arvin’s map shows most of those “yes” votes were concentrated in the Marina District, Pacific Heights, the Financial District and near Lake Merced. A smaller number of precincts in Visitacion Valley, Western Addition, Russian Hill and Bayview Hunters Point also voted in support of the measure.

Alameda, San Mateo, Marin and Sonoma counties also voted against Prop. 22, albeit by a smaller margin.

By comparison, Prop. 22 won out in other major metropolitan areas such as Sacramento, Los Angeles and San Diego counties by sizable margins.

Passage means the tech giants do not have to transition their drivers to employees, as was required by statewide labor law Assembly Bill 5 passed last year, which exempts them from providing wages and benefits set by state labor standards including health care, paid leave and unemployment insurance.

Prop. 22 requires the companies provide workers with more benefits than they currently do, including a medical stipend, an earnings floor and some reimbursement for work-related expenses, but they remain far from what would have been granted to workers-turned-employees. Many of the benefits, for instance, only apply to the hours when workers are actively driving and clocked in on the app.

“Tonight’s victory clearly indicates this solution was preferred by a majority of drivers, customers and voters, and a model for preserving the flexibility app-based rideshare and delivery drivers need and want, while providing historic new benefits the rest of the country should follow,” the Yes on 22 campaign said.

The battle garnered national attention when Lyft and Uber both dangled the possibility of leaving California altogether, should Prop. 22 not be passed by voters. It quickly escalated with a series of court cases between the state of California, the City of San Francisco and others against Uber and Lyft, alleging the tech companies had not complied with AB 5 at the start of the year as required by the law.

Just two weeks ago on Oct. 22, a California Appeals Court moved to uphold a lower court injunction against Uber and Lyft requiring them to comply with the statewide labor law. That court order no longer applies, as voter approval of Prop. 22 means these gig companies are no longer subject to AB 5.

The office of San Francisco City Attorney Dennis Herrera was displeased with the results, but told the Examiner the fight doesn’t stop with Prop. 22.

“They used their venture capital to put their collective thumb on the scales of justice. But they can’t change the fact that they have been violating the law for years,” spokesperson John Coté said. “Drivers and the public deserve restitution penalties for Uber and Lyft’s misconduct up until the time Prop. 22 takes effect. We are going to continue with our case until justice is served.”

Uber, Lyft and others insisted the requirements of AB 5 would take away the ability of their drivers to create their own schedules and raise business operating costs so much that they’d be forced to lay off current drivers and pass higher costs along to customers. Prop. 22, they asserted, would protect their business model while still providing more protections to workers.

Prop. 22’s language stipulates that any amendments require a 7/8 supermajority in the state legislature.

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