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NO on PROP 22: NObody rides for free – Not even Billionaires

Uploaded: Oct 5, 2020
November’s Prop 22, the most deep-pocketed Proposition in California’s rich referendum history (with a war chest of $184 million on the ‘yes’ side alone; about $10 million for the ‘nos’), seeks to carve out a peculiar, special niche in employment law for app-drivers engaged by Uber, Lyft and others.

Why, you might reasonably ask, would these tech giants underwrite this idea so heavily? The obvious answer, remarkably, is that it’s worth a Lot more than that to them if they win. It’s an investment. As historians are fond of saying: “every empire was built on the backs of SOMEbody.” In the gig economy, those empires are the Prop sponsors, and the backs belong to their drivers. They are hoping you’ll be fooled into protecting those fiefdoms, and making that investment pay-out like a Trumpian casino.*

There are actually two different brilliant ideas that form the ride-sharing industry’s economic foundation. First, they’ve revolutionized urban transportation by replacing taxicab dispatchers with The Web. Second, they’ve con-vinced individual drivers to work for them while bearing the great majority of the companies’ direct operating costs.

Expenses of car ownership, registration, insurance, gas, oil, tires, maintenance and repairs, potential liability – all these are borne by the drivers, workers whom the Techsters classify as Independent Contractors. Legally, they are treated the same as your kitchen remodeler or plumber – except in this case, the kitchen guy would be supplying those cabinets and appliances for free.

Economists call this “marginal cost pricing” of the drivers’ services, and it is found on the road to ruin for those workers. As a ‘side-hustle’ (what a ‘with-it’ term for such a servitude!), they are tempted to ignore all those “fixed” and other costs they are bearing, and focus on the pocket change they collect for the work. ‘But here’s the deal,’ marginal cost pricing Never works out – according to a recent Economic Policy Institute study, the average actual pay (net of expenses) of app-drivers is $10.87/hour. That’s less than 90% of earners nationwide; the state-wide minimum wage in our fair California is currently $13/hour – headed for $15 in 2022 and higher now in many cities.

It should also be mentioned that only employees, and not contractors, are protected by important “safety net” items like traditional unemployment compensation, workers comp if they are injured on the job**, anti-discrimination laws, and overtime pay. Those drivers can’t even legally organize themselves to seek better wages – only “employees” may unionize.

So, why Prop 22? It seeks to overwhelm both the CA Supreme Court, the state legislature and tax base by legitimizing the Tech Titans’ practice of scoff-lawing the CA Labor Code. Because of the unanimous, 2018 ruling of the CA Supremes in the Dynamex appeal, it is blindingly obvious that these driver/workers are properly treated as employees under the so-called ABC test announced in that case.

But Court rulings are not self-enforcing, so the legislature ‘codified’ the ABC test in 2019, passing Assembly Bill 5 (AB5) despite a tech/gig lobbying onslaught in opposition. Uber and Lyft, though, are still stuck in ‘Park’ – refusing to re-classify, and running-up gargantuan Labor Code liabilities under lawsuits brought by the State to force compliance. Those fines alone could easily swamp the Prop 22 war chest.

Giving these devils their due, Prop 22’s Emperors do seek to convey a weakened menu of employment-type ‘benefits’ to their indentured serfs. But those part-way measures are pregnant with an admission – if you’ll go part way, it’s an acknowledgement that those bennies are legitimate. And if so, why not go all the way to treating these workers as what they certainly are: employees.

The move-fast/break-things crowd makes much of two arguments: 1 – that ‘flexible’ shift work is not possible under CA law, and 2 – the drivers prefer the current regime.

As to 1, that conclusion is clearly false under the Labor Code. Flexible shifts are nowhere forbidden, and are not uncommon. What may become more difficult is so-called “double-heading” – driving for both companies simultaneously, which some drivers do. Those difficulties are manageable, though – after all, each trip will only be for one company except in vanishingly unique circumstances.

As to 2, the companies are relying on internal surveys, using biased questions, after seeding the workers with argument 1. The media commercials are rife with cherry-picked workers – it’s a good bet that those folks were paid much better for their testimonials than for their driving.

Moreover, in the Big Picture, Uber and Lyft are just buying time until they need no drivers – at all. Self-driving cars are their future – if they can just keep bending their drivers’ backs for a few more years, they will be able to discard them by the road, all together – just so much litter.

And in the Very Big Picture, this Proposition is one more brick in the wall that has separated American workers from raises in inflation-adjusted ‘real’ wages and living standards for the past forty years. The hollowing-out of the American middle class is a well-documented phenomenon – this Prop only deepens the pot hole we’re in.

If the Prop fails, will Uber rides cost more? Yes indeedy, although many factors will determine the increase, and such Lyfts will still cost comfortably less than taxis. Innovation is a Good Thing, but every business must pay its way – complying with law in every application. Neither are these behemoths tiny start-ups in need of a temporary, uh, lift – they are $multi-billion global Caesars convinced that their lucre can forestall any day-of-reckoning.

Vote NO on 22 – let the Tech Bros know that you won’t be bought, and that nobody rides for free.

* Any regular readers of this irregular blog will know that I could never complete an entire tome without heaping scorn on the incumbent – whose several bankrupted casinos seem to have rewarded their gamblers (if not their creditors) only too well.

** Of course, Your employer pays handsomely into those central ‘kitties’, out of which out-of-work/injured workers draw compensation. Uber and Lyft – not a farthing for their drivers.
What is it worth to you?


Posted by SHale, a resident of San Ramon,
on Oct 5, 2020 at 12:29 pm

SHale is a registered user.

You left out what happens if Prop 22 fails and AB5 is fully enforced. Both Uber and Lyft have stated they won't be hiring all active drivers. They might hire approx 20-30%. What about the rest? That is the cost of AB5. Ooops.

Posted by Tom Cushing, a resident of another community,
on Oct 5, 2020 at 12:37 pm

Tom Cushing is a registered user.

Hi SHale:

IF I believed them, I'd be concerned. And IF I was Uber and wanted to intimidate my drivers and customers into voting yes, I might make a similar argument.

I believe they are bluffing.

Posted by Michael Austin, a resident of Pleasanton Meadows,
on Oct 5, 2020 at 1:01 pm

Michael Austin is a registered user.

Hi Tom,

Any idea how many of those drivers purchased a business license from their city, declared themselves a home business and write off $0.54 for every mile driven, which mightily exceeds their actual costs?

By declaring themselves a home business also puts them in the 30% tax bracket, however, because they are a home business they write off square footage of their home for office space, their rent, or mortgage, utilities, everything.

Posted by SHale, a resident of San Ramon,
on Oct 5, 2020 at 1:04 pm

SHale is a registered user.

Simple logistics would show you they are not bluffing. Not all active drivers will be hired, that much is 100% true. How many, in your mind, is it ok to not be hired?

Prop 22 is heading towards 50% voting yes. Drivers do prefer Prop 22 as the lessor of 2 evils on a 4 to 1 ratio.

I see you parroted the standard AB5 doesn't include verbiage for set schedules. You are right. The employer determines that. How many employers you know that offer 100% flex schedules to all employees? None, to brand new employees for sure. Flex schedule is a benefit granted to long term employees.

A few full time RS drivers in S. Cal wanted to be employees as they think they will be protected (they won't); calif is a 'at will' employer law: you can be fired for ANY legal reason. AB5 offers no protections that some feel it will.

You want to tap into drivers opinions view

Posted by SHale, a resident of San Ramon,
on Oct 5, 2020 at 1:13 pm

SHale is a registered user.

>Any idea how many of those drivers purchased a business license from their >city, declared themselves a home business and write off $0.54 for every mile >driven, which mightily exceeds their actual costs?

As a PT rideshare driver I can tell you NONE have a business license as it is not required by any state sans NYC, which has a different setup all together.

The mileage deduct is .575 and all drivers know that. And yes, this often wipes out any income, so they show a net tax loss.

Any RS driver trying to write off home, office or anything else would invite an instant IRS audit. We can write of mileage for the vehicle (or actual costs, nobody does that) and expenses related to RS (rideshare) cell phone, car washes etc etc.

Posted by Jayze, a resident of Danville,
on Oct 5, 2020 at 2:11 pm

Jayze is a registered user.

You are ignoring the fact that there is a whole generation of people, ages from college student thru approximately 30, who have greatly reduced the amount of drinking and driving that takes place, due to their familiarity and custom and practice with using Uber and Lyft when going out. These young people, unlike so many generations before them, are responsible when it comes to drinking and driving, as Uber and Lyft have made it so easy for them to utilize these ride sharing aps while socializing with friends. If you force Uber and Lyft to leave our community, or force them to greatly reduce the number of drivers out there late at night to pick up our youth who have been partying, the results will be huge spikes in drinking and driving accidents and deaths.

If the drivers themselves favor being independent contractors 4 to 1, and having a full fleet of them out there picking up those who have been drinking saves lives, why mess with that?

Posted by Tom Cushing, a resident of another community,
on Oct 6, 2020 at 8:32 am

Tom Cushing is a registered user.

SHale: you lost me at "simple" logistics, which you never explained. Uber and Lyft won't leave by far their biggest market - they would cut off their noses to spite their face. Empty threats and fear tactics are so unCalifornian.

The impacts of actually complying with the same laws that apply to everyone else will be lost in a blizzard of other factors that affect businesses, including the course of the pandemic, the general economy's activity, the return of air travel, etc. What's 'acceptable' is playing by the the same rules as everyone else.

The internal driver polls are utterly unreliable, and irrelevant, anyway. If we threatened retail workers with economic disaster unless they took pay and benefits cuts to under $11, many would favor enduring the cuts, especially if we controlled how the questions were asked.

Moreover, what's next? Why not carve out other industries - farm workers, say, or retail clerks? They are every bit as special as app-drivers - let's call them contractors, too. There's a term that describes sites where workers toil for less than the minimum wage: they are called "Sweatshops." You might consider thinking of Uber cars as sweatshops-on-wheels.

Your unsupported "headed for 50% stat" is also fictional - according to UC's neutral Institute of Governmental Studies poll Web Link , the public is Unconvinced - 39% in favor, 36% opposed and 25% Undecided (and that was before they read my blog ;-)). History suggests that most Undecideds end-up voting No. Prop 22 - despite outspending its opposition almost 20-1(!), is in trouble.

As to whether Uber drivers should in-effect subsidize the responsible social habits of the young-and-drunken, nothing will change except the subsidy. Lyfts will remain available, as will cabs. So, Cheers!

Posted by Jake Waters, a resident of Birdland,
on Oct 6, 2020 at 8:54 am

Jake Waters is a registered user.

The fact that your liberal mind is suggesting all of us to vote ‘No,' means definitely I will vote ‘Yes.'

If you place restrictions on this gig economy it will kill it, just as the thousands of regulations by liberals have hurt other businesses. These demands benefit the state through the number of taxes they will receive and the control and future restrictions they will apply.

- a large number of these drivers use this system to add to their income as a second job. You place these restrictions and they must decide between their full time employment or their moonlighting.

- flexibility goes out the window. Mandatory hours take their place. This has been the beauty of the employment.

- less drivers on the street, accompanied by the increase in fares. The consumer losses. The driver loses. Those who use the service will know. Many short fares won't be picked up as readily. Many areas will be reduced in service.

- I use Uber a lot, and I haven't found one driver that wants it. They like working when they want. They like the freedom. Many are doing so well they have given up their day job.

Government always finds a way to destroy innovation. Just like Tesla. California is on the verge of losing their greenie darling to better accommodations.

- nobody rides for free. You're correct, I have paid every time I use the service.

Wait and see. I'm voting YES.

Posted by Tom Cushing, a resident of another community,
on Oct 6, 2020 at 9:27 am

Tom Cushing is a registered user.

Jake: That Liberal label is a proud 'feature,' not a bug.

As to everything else, asked-and-answered. You might consider at least 'reading' the blog before you comment.

Posted by Jayze, a resident of Danville,
on Oct 6, 2020 at 9:27 am

Jayze is a registered user.

I am assuming from your comment that "cabs will still be available" for those college age to 30 who rely on Uber and Lyft when out drinking that you have not spent anytime near bars and restaurants after midnight in the last 10 years. Sure, Tom, and based on your out dated way of thinking, I am sure our 21 year olds will ask the barkeep for the handy giant Yellow Pages behind the counter, as they use their flip phones to call Yellow Cab, and are told the cab driver will be there in an hour.

Sure, we always see a fleet of cabs outside Elliotts, Meenar, Players, near closing time: Not! What we see is 21 to 30 year olds, who have been drinking, automatically and instinctively contact Uber and Lyft, knowing that in approximately 5 minutes a driver, who is happy to work as an independent contractor, by 4 to 1 margin, pick up our youth and safely transport them home. If this does not pass, it is undisputed that Uber and Lyft will either go out of business or so greatly reduce the number of drivers that those drinking will not be able to have a fleet of ready and available drivers immediately available to pick them up and safely take them home.

The simple reality is that having so many Uber and Lyft drivers out there, we are greatly reducing the number of drinking and driving accidents and deaths, and that alone is reason enough to vote Yes on this.

Posted by MichaelB, a resident of Pleasanton Meadows,
on Oct 6, 2020 at 11:11 am

MichaelB is a registered user.

"Moreover, what's next? Why not carve out other industries - farm workers, say, or retail clerks? They are every bit as special as app-drivers - let's call them contractors, too. There's a term that describes sites where workers toil for less than the minimum wage: they are called "Sweatshops." You might consider thinking of Uber cars as sweatshops-on-wheels. "

What's next? Why not ignore the silly "sweatshop" comparison and vote the "progressives" out so the state can be more competitive and business friendly compared to other locations? What do we get instead? Another proposed state income hike and "wealth tax".

Web Link

Posted by Malcolm Hex, a resident of San Ramon,
on Oct 6, 2020 at 11:45 am

Malcolm Hex is a registered user.

Before Uber and Lyft came along, catching a cab in San Francisco could take as long as 20 - 25 minutes, or more. In fact, an article by KQED addressed this this issue back in November of 2012 (Web Link

I have used Uber many times during my visits to the City. I have also made it a point to ask drivers how they feel about their job. Every single one of them said they love it. The only thing that concerned them was the possibility of unionization. Their fear was that despite the so-called benefits of belonging to a union, the monthly dues required would chip away at their income. But I digress: Cushing's comment about "sweatshops on wheels" is a noteworthy chuckle due in part because Lyft and Uber drivers have the luxury of working flex hours; whereas sweatshop workers do not.

In FACT, The US Department of Labor defines sweatshops as a FACTORY that violates 2 or more labor laws. Sweatshops often have poor working conditions, unfair wages, unreasonable hours, child labor, and a lack of benefits for workers. If Cushing equates working in a factory the same as driving a car... Well... In that case, his point is most notably moot.

Posted by SHale, a resident of San Ramon,
on Oct 6, 2020 at 1:24 pm

SHale is a registered user.

oh please. Do you have any idea what it would take to onboard thousands of employees, change HR and backend systems? I'm guess the answer would be NO, you have no idea. Both Uber and Lyft would shutdown for an uncertain amount of time while they 'hire' drivers. That is a clear fact, not bluffing as you feel.

I said 'nearing' 50%. That poll, is nearly a month old and that poll was conducted BEFORE most Calif voters even had the voting pamphlet; it's the details that matter.

Driver > 70% do not prefer AB5; something you seem to disregard. Can you post links, articles, that prove your point?

You clearly have done very very little AB5 research. How many carve outs exists now? How many amendments were passed recently to include even MORE carve outs? You should look into that and explain each carve out and why it was needed.

Also clearly you are 100% out of touch with what current RS drivers want or feel. Nearly all dislike AB5 and Prop 22, but 4 to 1 they feel Prop 22 is the less 'smelly' alternative.

Tell me how AB5 is 'better' when upwards of 40% of current drivers won't even be hired. Uber and Lyft say maybe 20-30% will be hired. Bluffing? No matter, the cost of AB5 is greater than any good. That is the bottom line.

Next polling will tell the story, aye?

Posted by SHale, a resident of San Ramon,
on Oct 6, 2020 at 1:27 pm

SHale is a registered user.

>Lyfts will remain available, as will cabs. So, Cheers!

Explain that? Lyft will be as effected as Uber; there is no difference.

And cabs: did we research the cost difference? I'm guessing that is a no answer.

And cabs in the 'burbs'? You are too funny.

Posted by SHale, a resident of San Ramon,
on Oct 6, 2020 at 6:49 pm

SHale is a registered user.

btw, a more recent poll via San Diego Union Tribune has yes on Prop 22 up to 46%. Four more percent and it passes. Certain to vote no down to 27% with undecided to 27%.

Yes on Prop 22.

Posted by Jennifer, a resident of another community,
on Oct 6, 2020 at 7:45 pm

Jennifer is a registered user.

I'll be honest. I couldn't care less about this prop. I'm not foolish enough to take Uber, Lyft, etc. and I don't care if they're employees or independent contractors. Why is this being left to the voters?

Posted by Michael Austin, a resident of Pleasanton Meadows,
on Oct 6, 2020 at 8:10 pm

Michael Austin is a registered user.

Like Jennifer comment.

People got to where they wanted to go before UBER and LYFT.

The current market for getting some where is what it is.

Why vote for what it is?

Posted by sjd, a resident of Livermore,
on Oct 6, 2020 at 10:53 pm

sjd is a registered user.

2 points.
1) The driver surveys carry survivorship bias. There are many ex-drivers not surveyed. I don't know what they would say but I can guess they would be more negative towards the system.
2) I personally have seen companies make this shift away from contractors to flexible hour employees. It takes time, but it is not impossible. These huge multinationals could do it if they wanted to. We already see alternative companies in SF ready to take the reins if they actually make good with their threat to leave.

Posted by farid sharry, a resident of Blackhawk,
on Oct 7, 2020 at 3:42 am

farid sharry is a registered user.

very nice article thanks a lot.

Posted by Tom Cushing, a resident of another community,
on Oct 7, 2020 at 7:13 am

Tom Cushing is a registered user.

So many assumptions, so little time - it's nice to see the band back together.

jayze - aspersions about my particular nocturnal wanderings aside, you also crucially assume (a second time) that the ride-share boyz will go away, even though, as shale points out without evidence, there may be a large disparity between their cost and a taxi. They can surely raise prices amply within that gap to treat their drivers legally. They'll be there. BTW, I have Uber, Lyft AND Yellow Cab apps on My iPhone - get with it, and try not to pick on geezers you don't know.

And shale - you assume you know AB5 better than I (who only teaches it). In fact, the carve-outs there relate mostly to occupations that are already well-paid - much like the FLSA exempts certain professionals and execs from overtime rules. A better target for you would have been the jobs recently excluded in this year's bill, but AB5, per its sponsor Lorena Gonzalez, was always aimed at the much (much) larger abuses of the gig titans. As sjd points out, other gig companies have converted and complied, including even newer ride sharing outfits. As Uber and Lyft told the taxis: adapt or die.

Re onboarding cost - it's a nonsense argument to say that they've been scofflawing for so long, and have grown so big, that they must be allowed to continue scofflawing. "Too big to comply" is a losing argument, and a self-inflicted wound.

BTW, If a sweatshop is to be defined as two-or-more Labor Code violations, they exist here in the miss-classification and failure to pay minwage, alone.

The rest is just anecdotal tales - nice stories, but actual evidence is the basis of policy, not "I know a guy-type" mythologies and assertions.

Posted by Michael Austin, a resident of Pleasanton Meadows,
on Oct 7, 2020 at 9:42 pm

Michael Austin is a registered user.

@ SHale:

There are a large number of Uber and Lyft drivers that purchase a business license.

Search any city administration for business license applications, how many are home businesses, the nature of those home business applications.

When filing with the IRS, the requirement is to be honest. In doing so, there will never be an audit.

There is no "instant IRS audit".

Posted by Jake Waters, a resident of Birdland,
on Oct 9, 2020 at 9:08 am

Jake Waters is a registered user.

That's it Tom? That's all you have? I read your article. Your voting No, and I'm voting yes. I told you why. If you have written something more that I haven't read, then perhaps offer it. BTW, did you mean to say ‘hug' or actually ‘bug?'

Posted by Tom Cushing , a resident of another community,
on Oct 10, 2020 at 9:52 am

Tom Cushing is a registered user.

Interesting development: a mailer masquerading as a "Progressives' Voter Guide" has been distributed in SoCal and elsewhere - I got one - in support of Prop 22. Web Link

It contains other endorsements you'd expect - like Biden/Harris. But even the names of the sponsoring organizations are faked, e.g., "feel the bern". Amazing, but that $184 million isn't gonna spend itself.

Posted by Jayze, a resident of Danville,
on Oct 10, 2020 at 1:59 pm

Jayze is a registered user.

Mothers Against Drunk Driving(M.A.D.D.)fully support Prop 22, and just started running ads supporting this life saving proposition. They are not a "fake organization", or a "bunch of billionaires", but rather a non-partisan group advocating for safer streets and less drinking and driving. Prop 22 keeps a large fleet of Uber and Lyft drivers on the road to pick up those who have been drinking, in a convenient and safe manner. Vote Yes on Prop 22, and join Mothers Against Drunk Driving in keeping our streets safe from drunk drivers.

Posted by Michael Austin, a resident of Pleasanton Meadows,
on Oct 17, 2020 at 8:02 pm

Michael Austin is a registered user.

The new younger democratic party progressives tend to be what they are "JUVENILES".

Democratic Senator Dianne Feinstein and Republican Senator Linsey Graham are old school politicians.

A brief embrace following the completion of the hearing this week was a simple gesture of mutual respect.

For the democratic "JUVENILE" progressives to turn it into demands for resignation is plain out stupid and absolutely counter productive.

This continued type of behavior by the "JUVENILE" progressive will help elect Trump.

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