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To gig or not to gig: that is the question

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If you’ve been following Assembly Bill 5 (AB5) in California, you know that this bill requires most independent contractors (such as Uber, Lyft and DoorDash drivers and most newspaper delivery persons) to be reclassified as actual employees, who would receive the same benefits (healthcare, retirement, overtime) as employees of businesses like banks and high tech. AB5 was passed by a Democratic legislature that felt it was patently unfair for billion-dollar companies like Uber and Lyft to pay their drivers a minimal amount of money; AB5 specifically mandated that the companies upgrade the status of their “gig workers” as a matter of simple economic fairness. Governor Gavin Newsom signed the bill into law, and it went into formal effect on Jan. 1, 2020.

Uber and Lyft immediately stalled and protested. If they had to provide decent pay and benefits to their thousands of drivers, they argued, they would go bankrupt. After four months of failure to comply with AB5, Uber and Lyft found themselves sued by the State of California and the cities of San Francisco, Los Angeles and San Diego, whose attorneys insisted the car-for-hire companies immediately institute AB5’s mandates. Four months later, in early August, 2020, a Superior Court judge found that Uber and Lyft were in fact out of compliance with AB5, and ordered them “to reclassify their workers from independent contractors to employees with benefits.”

A defiant Uber and Lyft quickly played their trump card: they wrote a proposition that will appear on November’s statewide ballot. California Proposition 22, the “App-Based Drivers as Contractors and Labor Policies Initiative,” asks the voters of California “to define app-based transportation (rideshare) and delivery drivers as independent contractors,” thereby short-circuiting AB5’s mandates. The most recent statewide poll I could find (from Aug. 14) shows that, when presented with the full text of Prop 22, 41% of voters said they’d vote “yes” to approve it, while only 26% said they’d vote “no.” But a significant minority—34%–were still undecided.

I, myself, am among the undecided. My views on the topic are complicated, because the topic itself is complicated. My attitudes also are heavily shaped by my experience: I was an independent contractor for the great majority of my career. When I was a well-known wine writer and critic, first for Wine Spectator and then for Wine Enthusiast, I was never a regular employee, although most people assumed I was. I never was paid a salary; I never had any benefits, such as healthcare insurance, sick leave, vacation time or a pension. I was paid piecemeal: so much per article or wine review. My retirement plan was entirely up to me.

I used to struggle within myself over whether I liked my status or not. I would have liked the benefits, but I would have had to become a regular employee, with the resultant loss of personal freedoms that implies. Of course, there was no guarantee that my bosses even wanted me to become a fulltime employee; the topic never came up (by mutual consent), and I doubt very much that they would have wanted the additional expense of paying me benefits. After all, why buy the cow, when you can get the milk for free?

If I have an inclination, it’s in favor of Prop 22. It seems to me that if Lyft and Uber drivers wish to remain independent contractors—and many say they do—then they should not be compelled to become employees. On the other hand, it also seems to me that the ride-hailing companies should be able to work something out with those drivers who do want to become employees. (If fact, Prop 22 does allow additional benefits to accrue to the drivers, although they’re not nearly as comprehensive as AB5 would make them.)

The issue is even more complicated for an old newspaper guy like me. I still subscribe to the San Francisco Chronicle’s paper edition. I like getting up early and finding the Chron waiting for me in its plastic wrapping. AB5 had the consequence of forcing California newspapers to treat their delivery people—who are independent contractors—as employees. The newspapers argued that they couldn’t afford to do so. They’re already struggling after a decade of declining sales, a struggle heightened by an ongoing fall-off in advertising accentuated by the pandemic. And while the newspapers aren’t saying it publicly, I know that the delivery people are usually immigrants, often Asian, for whom this entry-level work, regardless how low paid it is, is a welcome entry into the American economy.

The California newspapers have responded with their own proposed law. AB323, the Save Local Journalism Act, is not a ballot proposition; instead, the proposed law would give newspapers several additional years “to come up with a successful freelancer to employee transition for distributors and paper carriers,” thus bypassing AB5’s requirements for the time being. The newspapers, in other words, aren’t seeking to entirely get around AB5—yet. They’re buying time, hoping to come up with a better, more permanent solution. The bill is said to have widespread support, with predictions that Gov. Newsom will sign it by the end of this month.

These are weird, tough times for everyone. Every day seems to bring new problems and make old problems thornier. Still, if I had to vote right now, I’d vote for Prop 22, and I’d urge my state legislators to support AB323 and the Governor to sign it into law. There are many problems with the gig economy, but it is a wave-of-the-future kind of thing, and to oppose it reflexively, it seems to me, is folly.

  1. Bob Rossi says:

    This is a tough issue. But I have a problem with this statement: “If they had to provide decent pay and benefits to their thousands of drivers, they argued, they would go bankrupt.” Should companies have that kind of business model?
    I’ve been an independent contractor for 30 years. But I truly have been an independent contractor as that term has been legally defined. I get a project, with a due date, and some guidelines (minimum length, format, etc.), then I”m on my own. I set my own hours and work days, and can work at my own pace. I’m not sure that Uber and Lyft drivers are in the same boat.

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