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Prop 22 just passed in California — now what?

Prop 22 just passed in California — now what?
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If you work in the sharing economy in California, it’s been a confusing 18 months. First, the state legislature in Sacramento passed a law that said that anyone who works in the sharing economy — Uber and Lyft drivers, DoorDash and Postmates delivery people and so on — would now be treated as a full-time employee and not an independent contractor.

You liked that in some ways and didn’t like it in others. Full-time employee status meant you’d get benefits, you could organize and bargain collectively and you’d be able to enjoy all of the workplace protections as every full-time worker in California. On the other hand, you’d now lose the flexibility that comes with being an independent contractor, like setting your own schedule, deciding what jobs you do and don’t want to take and being limited to working for just one platform. You also might have seen a decrease in how much cash you take in, because your employer would have to charge higher prices (the money to pay your benefits has to come from somewhere), which could reduce customer demand and make things less busy.

But before you could even get used to your new status, the platforms you work for refused to comply with the new law and launched a ballot referendum to overturn it. Courts went back and forth between ordering the companies to treat you like employees and deciding the new law may not apply. You didn’t know what would happen. And then, the ballot campaign began.

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The proponents of Proposition 22, which overturns the state’s worker classification law, started spending on the campaign. And they kept spending. And spending. And spending — over $200 million in all. Opponents spent a lot too, but their $20 million was a fraction of the total. You were being asked to weigh in publicly both for and against the ballot referendum. Millions and millions of Californians, every single day, were told on TV, on the radio, in podcasts, online (by people who don’t actually work on sharing economy platforms) what’s in your best interests. You weren’t always sure you agreed, but whatever. The polls were unclear on whether Prop 22 would pass. Some showed a close race, others didn’t. And then the voters spoke, overwhelmingly voting yes, overturning the state law in the process. 

Now you’re an independent contractor again. What does it all mean?

In some ways, nothing; in some ways, everything. It means that, at least in California, you’re always going to be able to work for as many platforms as you want. It means you decide how you work, when you work, where you work. It also means that if you want what comes with a full-time job — the benefits and obligations — Uber, Lyft, DoorDash and the other platforms are not the right place for you. And also, despite the market’s celebration of Prop 22’s passage with big jumps in share price of the companies who won, even if you want to keep driving for Uber, you need to be aware that the company loses money on every ride and that the future of the industry is far from secure. You also need to remember that autonomous cars are coming (pre-COVID-19, Tel Aviv was planning to introduce autonomous taxis in 2021), which could ultimately eliminate the need for drivers and delivery people altogether.

In other words, if you’re a driver or delivery person and you like the system the way it is, you can breathe easy that things aren’t going to change. For now. Even if the politics of worker classification in California are now frozen in place, the technology is far from it. And if you have a cousin or a friend who works in the sharing economy in another state, the issue is far from settled. Lots of states are going to take up worker classification legislation in 2021. 

Proposition 22’s success slowed the momentum behind labor’s campaigns, but it hasn’t stopped it completely. So all of the same pros and cons, all of the same questions and decisions you dealt with over the past 18 months are now front and center for millions of sharing economy workers in lots of states. You’ve seen this movie before. But for them, it’s just getting started.

Bradley Tusk is Mayor Bloomberg's former campaign manager and the founder of Tusk Strategies and Tusk Ventures, a New York City-based political consulting firm and venture capital fund. Follow him on Twitter @bradleytusk.