{"id":3507,"date":"2021-02-19T19:50:03","date_gmt":"2021-02-19T19:50:03","guid":{"rendered":"https:\/\/live-journal-of-law-and-public-policy.pantheonsite.io\/?p=3507"},"modified":"2021-02-19T19:50:03","modified_gmt":"2021-02-19T19:50:03","slug":"proposition-22-what-does-your-uber-driver-deserve","status":"publish","type":"post","link":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/2021\/02\/19\/proposition-22-what-does-your-uber-driver-deserve\/","title":{"rendered":"Proposition 22: What Does Your Uber Driver Deserve?"},"content":{"rendered":"\n

(Source<\/em><\/a>)<\/p>\n\n\n\n

On November 3, 2020, in the throes of one of the most\ncontentious presidential elections in history, all eyes at Uber and Lyft were\non California. The rise of the gig economy<\/em><\/a>\u2014a\nlabor market that relies on independent contractors and freelance workers\noutside of traditional labor regulations\u2014is a major subject of discussion among\nlegislators across the nation. California\u2019s efforts to reform and regulate the\ngig economy hinged on the passage or failure of Proposition\n22<\/em><\/a> (\u201cProp 22\u201d), a ballot initiative that defines app-based\ntransportation and delivery drivers as independent contractors with their own\npersonalized labor and wage policies. The gig economy titans spent more than $200\nmillion<\/em><\/a> on their campaign in support of the measure, the most expensive\nin the state\u2019s history. This past November, the titans rejoiced: Prop 22 had\npassed with 58%<\/em><\/a>\nof the vote. But what does Prop 22 mean for California\u2019s app-based drivers, and\nwhat are its consequences for gig economy workers nationwide?<\/p>\n\n\n\n

Gig economy giants, such as Uber and Lyft, assert that their\napp-based drivers are independent contractors, not employees. As independent\ncontractors, drivers are exempted<\/em><\/a>\nfrom major traditional protections under the National\nLabor Relations Act<\/em><\/a> (\u201cNLRA<\/a>\u201d)\nand other\nsocial protections<\/em><\/a> like unemployment, workers compensation, and social\nsecurity. Because app-based drivers are not covered by the NLRA, they\ndo not have the right to unionize, collectively bargain, or engage in\ncollective concerted activity.<\/em><\/a> Without these traditional protections,\ndrivers have no safety net in the event of job loss or on-the-job\ninjury\u2014including exposure to COVID-19. And because drivers do not have a\nprotected right to unionize or engage in concerted activity under the NLRA, they\nare in a very vulnerable position if they endeavor to negotiate with their corporate\n\u201cpartners.\u201d<\/p>\n\n\n\n

Legislatures and drivers alike have hotly contested the classification\nof app-based workers as independent contractors, and Uber has seen criticism at\nan international scale. According\nto<\/em><\/a> General Secretary of the International Trade Union Confederation (\u201cITUC<\/em><\/a>\u201d<\/em>)\nSharan Burrow, \u201c[Uber]\u2019s business model depends on ripping off the drivers who\nwork for it, denying them employment rights and other entitlements continually\ndriving their incomes down.\u201d <\/p>\n\n\n\n

Yet in April 2019, the Office of the General Counsel of the\nNational Labor Relations Board (\u201cNLRB\u201d) issued an advice memo<\/em><\/a>, setting forth the\nGeneral Counsel\u2019s opinion that Uber drivers are independent contractors. While\nthe opinion specifically addressed Uber and UberX, the memo is expected\nto serve as guidance<\/em><\/a> for similarly situated workers in the future. <\/p>\n\n\n\n

The General Counsel\u2019s memorandum rests on the rather novel position that \u201centrepreneurial opportunity\u201d<\/em><\/a> is critical to determining independent-contractor status. Entrepreneurial opportunity\u201d is a very recent addition to the law governing employee status; until January 2019, the NLRB relied on the \u201cnonexhaustive common-law factors enumerated in the Restatement (Second) of Agency\u201d<\/em><\/a>to determine an employee\u2019s status, and explicitly rejected the position that entrepreneurial opportunity was a critical factor. At the outset of 2019, however, the NLRB overruled its former criteria. As the General Counsel advice memorandum<\/a><\/em> states, the current test concludes as follows: \u201c[W]here the common-law factors, considered together, demonstrate that the workers in question are afforded significant entrepreneurial opportunity, [the Board] will likely find independent contractor status.\u201d <\/p>\n\n\n\n

Uber and Lyft drivers arguably lack\nthe hallmark indicators of entrepreneurial freedom<\/em><\/a>. They cannot control\ntheir rates, they cannot command a higher rate as they gain experience, they\nare penalized for declining too many rides, and they are limited even in the\nroutes they choose to take their passengers.<\/p>\n\n\n\n

Initially, California was a site of great momentum in\napp-based drivers\u2019 fight for basic employment protections. On September 18,\n2019, California signed Assembly\nBill 5 (\u201cAB 5\u201d)<\/em><\/a> into law, codified at Section\n2775<\/em><\/a> of the California Labor Code. The new law created an assumption\nthat every worker in California is an employee, not an independent contractor,\nunless the employer can prove a three-part\ntest<\/em><\/a>: (1) \u201cThe person is free from the control and direction of\nthe hiring entity in connection with the performance of the work, both under\nthe contract for the performance of the work and in fact,\u201d (2) \u201c[t]he\nperson performs work that is outside the usual course of the hiring entity\u2019s\nbusiness,\u201d and (3) \u201c[t]he person is customarily engaged in an\nindependently established trade, occupation, or business of the same nature as\nthat involved in the work performed.\u201d<\/p>\n\n\n\n

Applying the new law, the Supreme Court of California in San\nFrancisco County granted\na preliminary injunction<\/em><\/a> that enjoined Uber and Lyft from classifying\ntheir drivers as independent contractors. On October 22, 2020, California\u2019s\nFourth District affirmed<\/em><\/a>\nthe lower court\u2019s injunction. Uber and Lyft sought to stay the litigation until\nthe November 2020 election, awaiting the passage of Prop 22, but the court\nrefused.<\/p>\n\n\n\n

Sure enough, Prop 22 passed on Election Day. While Uber and\nLyft spent over $200 million on media to promote their \u201cYes on 22\u201d campaign,\nlabor groups opposing the law raised just one\ntenth<\/em><\/a> as much money. Uber delivered pop-up messages to users warning of\nlonger wait times and higher prices if the ballot measure failed, and even sent\nits drivers in-app messages<\/em><\/a> urging them to vote for Prop 22. \u201cYes on\n22\u201d solidified drivers\u2019 status as independent contractors, continuing their\nexemption from major labor laws. <\/p>\n\n\n\n

The ballot measure requires companies to provide additional\nprotections to their workers, but the measures are weaker than those available\nto employees under California law. For example, California\u2019s workers\u2019 compensation\nprogram places no limit on covered medical care expenses, but the Prop 22\nprogram mandates only $1 million in coverage. Employees in California are eligible for\npermanent disability<\/em><\/a> through the state, but Prop 22 offers only\ntwo years<\/em><\/a> of disability payments. Moreover, state\nworkers\u2019 compensation claims are decided by an independent body of objective\njudges<\/em><\/a>, but Prop 22 does\nnot explain<\/em><\/a> how its private claims would be processed. As Glenn Shor, a\nformer policy advisor at the California Department of Industrial Relations and\nlecturer in public health at Sacramento State University and UC Berkeley, told\nthe Los\nAngeles Times<\/em><\/a>, \u201cThey\u2019re trying to re-create the workers\u2019 comp[ensation]\nsystem, which is a couple hundred pages of law, in four or five paragraphs.\nYou\u2019re not going to get the same level of coverage, same level of benefits, or\nthe same independent adjudication of the claim.\u201d<\/p>\n\n\n\n

Significantly, drivers will face additional obstacles to be\ncompensated for COVID-related illness, disability or death. An executive order\nsigned by Governor Gavin Newsome in May of 2020 established a presumption\nin workers\u2019 compensation claims<\/em><\/a> that essential workers infected with\nCOVID-19 contracted the virus at work. Under Prop 22, drivers would not get the\nbenefit of this presumption.<\/p>\n\n\n\n

As the gig economy giants celebrate their victory and talk\nplans to take the initiative nationwide<\/em><\/a>, have California voters made\nthe right call? Or are we creating yet another loophole for employers to dodge\nexisting labor laws?<\/p>\n\n\n\n

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\n

About the Author: Nola Booth is currently a 2L at Cornell Law School. She grew up in Ithaca, NY and has a degree in Biology and Society from Cornell University. She worked as a judicial intern for the United States District Court for the Northern District of New York during her 1L summer, and she spends her free time with her partner.<\/p>\n<\/div><\/div>\n\n\n\n

Suggested Citation: Nola Booth, Proposition 22: What Does Your Uber Driver Deserve?<\/em>, Cornell J.L. & Pub. Pol\u2019y: The Issue Spotter, (Feb. 19, 2021), https:\/\/live-journal-of-law-and-public-policy.pantheonsite.io\/proposition-22-what-does-your-uber-driver-deserve\/<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

(Source) On November 3, 2020, in the throes of one of the most contentious presidential elections in history, all eyes at Uber and Lyft were on California. The rise of the gig economy\u2014a labor market that relies on independent contractors and freelance workers outside of traditional labor regulations\u2014is a major subject of discussion among legislators…<\/p>\n","protected":false},"author":1,"featured_media":3508,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[14,15,16,17,18,19,21,25,27,28],"tags":[725,879,919,977,1247,1580],"class_list":["post-3507","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-archives","category-authors","category-blog-news","category-certified-review","category-feature","category-feature-img","category-spotters","category-policycontributor-blogs","category-recent-stories","category-student-blogs","tag-gig-economy","tag-jlpp","tag-labor","tag-lyft","tag-prop-22","tag-uber"],"acf":[],"_links":{"self":[{"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/posts\/3507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/comments?post=3507"}],"version-history":[{"count":0,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/posts\/3507\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/media\/3508"}],"wp:attachment":[{"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/media?parent=3507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/categories?post=3507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/publications.lawschool.cornell.edu\/jlpp\/wp-json\/wp\/v2\/tags?post=3507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}