Uber, Lyft to Ask Voters to Block Calif. Employee Law

The proposal would exempt ride-sharing companies from state minimum wage and health insurance requirements.

College student Akamine Kiarie during a news conference in Sacramento, Oct. 29, 2019.
College student Akamine Kiarie during a news conference in Sacramento, Oct. 29, 2019.
AP Photo/Rich Pedroncelli

SACRAMENTO, Calif. (AP) — Some of the country's largest ride-sharing companies proposed a California law on Tuesday that would let them continue to treat drivers as independent contractors while also guaranteeing them a minimum wage and money for health insurance.

The state Legislature enacted legislation this year requiring ride-sharing companies to treat drivers as employees, which would let them form a union and entitle them to benefits like a minimum wage and workers compensation.

But the law proposed Tuesday would exempt ride-sharing companies. The proposal must be approved by voters, not the state Legislature. If passed, it would supersede the Legislature's action and any similar ordinances passed by local governments. It also prevents lawmakers from passing another law to block it.

The proposal will only get on the ballot in November 2020 if supporters can gather roughly 660,000 signatures from registered voters. Uber, Lyft and DoorDash have already pledged $90 million to support the effort, making it one of the most expensive ballot measures ever.

"We believe the nature of this work is truly unique," said Brandon Castillo, spokesman for the Protect App-Based Drivers & Services Coalition. He said lawmakers are "forcing an employment model that just doesn't work for the nature of this work."

Castillo noted the coalition is willing to negotiate with lawmakers. If the Legislature passes a similar law by June 25, they would withdraw the ballot measure, he said.

That appears unlikely. Democratic Assemblywoman Lorena Gonzalez, who authored the bill requiring companies to treat drivers as employees, called the proposed ballot measure "disingenuous." She argues it still would not give workers retirement benefits and overtime pay, and it would not let them organize a union.

"These billion-dollar corporations still refuse to offer their workers what every other employee in California is entitled to," she said.

The new proposal would require drivers receive at least 120% of the state or local minimum wage, whichever is higher. It would let drivers keep all tips. It requires companies to pay drivers 30 cents a mile for expenses.

And drivers who work at least 15 hours a week would get money for health insurance. They could work for multiple companies and get multiple stipends. But companies could ask drivers to prove they have health insurance as a requirement for getting that money.

The proposal is already dividing drivers. Edan Alva, a Lyft driver, criticized the companies for assuming most drivers are only seeking to supplement their income.

"For most of us this isn't a side job," he said. "I work nearly 80 hours a week to put food on the table with no benefits or protections. This is not right."

Akamine Kiarie, who also drives for Lyft, supports the ballot measure. He uses Lyft to pay for his college classes, and he likes being able to set his own hours around his academic schedule. He said if he were an employee, he might have to work set hours that would conflict with his classes.

"I approach it as a stepping stone in my life. I am not doing this for the rest of my life," said Kiarie. "We don't want to be employees."

Michael Roth, spokesman for We Drive Progress, an organization of 20,000 rideshare drivers, said the law approved by the Legislature and signed by Democratic Gov. Gavin Newsom does not require ride-sharing companies to put drivers on set schedules.

"Flexibilty is also a myth. With pay manipulation and arbitrary cuts, many drivers are forced to work extreme hours just to pay the rent and to keep their families fed," he said.

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