Proposition 22 in California has come and gone. The voters have spoken and all app based gig economy drivers have remained independent contractors. Surely Doordash, Uber, Postmates, Instacart and the rest of the app based gig companies didn't like being bothered by the state of California. Let's look at the facts. California did go after them, and they fought back. They didn't give in. They created a proposition and let the people vote. Fortunately for them, everything turned out just the way they wanted it to.
A quick summary of the battle between the state of California and the app based gig companies
When Doordash and the rest of the gig companies wrote their initiative for Prop 22, they had to convince voters to vote "Yes" on Prop 22. The state of California was really coming at them. The state was accusing them of misclassifying their drivers as independent contractors when they should have in fact been classified as employees. The state accused them of violating labor and wage laws and practicing unfair business.. When California passed AB 5 earlier in 2020, they really had their hands around the app based companies necks.
Once AB 5 was passed, Doordash, Uber and the rest of the gig companies had to do something, and they had to do something quick. If the state of California were to get things their way, all the drivers of these app based companies would be hourly employees that were entitled to vacation pay, sick leave, health benefits and other rights that every employee is entitled to.
A defense that Doordash, Uber and the rest of the app based companies used was that they were technology companies and therefore were only a platform. In other words, a company like Doordash was the middle man that would unite customer with restaurant. They were not a food delivery company. Uber tried the same kind of defense. Unfortunately, for them, the courts were not having any of this.
After numerous lawsuits and attacks from the state, there was talk of Uber and some of the other app based gig companies leaving the state. If their whole business operation was forced to change, these companies would not be able to be profitable. Not that they are presently profitable as it is, but surely they plan to be profitable one day, and AB 5 basically guaranteed them that it was not going to happen.
The state was not having any of what the app based companies were saying. They used an example of a cashier. They stated that a cashier does not only get paid when she is checking somebody out. In other words, when there is no customer to check out, her pay does not stop. She continues to get paid by the hour. They were of course using this example because of the way Doordash drivers and other gig drivers are paid.
When a Doordash driver accepts a call, they agree to getting paid a certain amount for the delivery. From the time they accept the call until the time they deliver, they are being paid. Once the food is delivered, they are no longer getting paid. If they sit in a parking lot for the next hour, they will not earn anything. The state had a big problem with this.
Proposition 22 was the last hope for the gig companies. If they did not win this, they would pretty much be done in California, and other states would probably follow. Doordash, Uber, Postmates and Instacart all put up big bucks to persuade voters to vote "Yes" on the initiative that they wrote. They invested more than 200 million dollars, and some people criticized them for having so much money to market their proposition when they were not even paying their drivers what they deserved. The opposition, the "No" on 22 supporters that were backed by many large labor unions spent around 20 million on their campaign.
Proposition 22 ended up helping Doordash drivers
When the votes were tallied up, "Yes" on 22 easily won. It was not as close as many people thought it would be. Doordash, Uber, Postmates, Instacart and the rest of the app based gig workers would continue to operate as independent contractors. There was going to be changes though. The gig companies had to write an attractive proposition if they wanted votes. If they didn't write an attractive proposition, nobody would have voted "Yes" on 22.
As a Doordash driver, I am glad that "Yes" on 22 won, and I'm sure most Dashers would agree. Most of us enjoy being independent contractors that are able to work when and where we want. That is the most important thing to us. We didn't want the state of California to come in and make these companies turn us into employees that have set schedules and that have to follow all the rules that employees have to abide by if they want to keep their job. If we wanted a job like that, we would go get one! This is our gig job!
With all of that said, I can personally say that I am glad the state of California went after the gig companies. Why? Because in the end things turned out better for gig drivers. Again, the app based gig companies had to write up something that would persuade voters to vote "Yes" on 22. This included benefits that we never had before. When voting, we had to choose between having our Doordash gig turned into a regular job by voting "No" on 22, or we could vote "Yes" on 22 and enjoy the freedom that we have always had. Of course, this came with the new added benefits.
When weighing things out, it really was not that difficult. Most of us Dashers did not want to become employees. Most of us already have a full time job, and we didn't have time for another. Dashing is a part time gig that we do when we want. There is no commitment and we didn't need another commitment. There's plenty of full time regular employee jobs out there, and if we wanted something like that, we would have gotten a job like that. Instead, we wanted to work as a Dasher.
Prop 22 was a blessing in disguise for Doordash drivers
If the state of California had never went after the gig companies, there would not have ever been any changes. Instead, Doordash drivers are now guaranteed 120 percent of minimum wage for engaged active time while they work. For a Doordash driver that is out there working and making deliveries, he never has to worry about only making $7 or $8 for the whole hour while doing cheap paying calls. It's nice knowing that if a Dasher has a bad hour like that, they are guaranteed to earn $16.80 (120 percent of minimum wage of $14 beginning on January 1, 2021) for their hour of engaged active time.
Other payment perks include 30 cents per mile that Dashers will receive for the miles they put on their vehicle while completing their deliveries. Dashers will also receive 100 percent of their tips, and a great thing about customer tips is that they are on top of the minimum guaranteed earnings. Other benefits include healthcare subsidies, occupational accident insurance and accident death insurance.
I'm sure most app based gig drivers were not on the side of the apps, but when the state is trying to take away your flexibility, and you have to choose, you're going to side with the app based companies. This is especially true when you will be receiving a minimum pay guarantee. All in all, everything worked out just fine for Doordash drivers and all gig drivers. Hopefully, this will set an example for any other states that think about forcing gig drivers in to becoming employees. Nobody wants that!
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