Following the passage of Proposition 22 with a 58.6% vote, California residents signaled their agreement with Uber, Lyft, DoorDash, Instacart, and Postmates regarding the classification of gig workers. The proposition established that these workers should be considered independent contractors, receiving the limited benefits outlined by those companies, rather than employees entitled to comprehensive labor rights.

“My initial reaction was one of shock, disappointment, and pain,” stated Vanessa Bain, a worker-organizer with Gig Workers Collective, in an interview with TechCrunch. “It was disheartening to realize that fellow Californians had voted to remove labor protections from individuals like myself and my colleagues.”

However, Prop 22 does not represent a conclusive end to the debate surrounding the status of gig workers. Workers, legal professionals, and advocates associated with Gig Workers Rising, Gig Workers Collective, the National Employment Law Project, and the Partnership for Working Families are preparing to intensify their efforts in the coming year. Simultaneously, gig companies are also poised to pursue similar legislative initiatives in other regions, both nationally and internationally.

“We couldn’t dwell on the setback for long, as companies immediately indicated their intention to expand this model nationwide, necessitating an adjustment to our organizing strategies,” Bain explained.

Therefore, the core struggle continues. In the year ahead, it is anticipated that both gig companies and worker organizations will engage in extensive lobbying, alongside an increase in legal challenges.

In 2019, the California state legislature enacted Assembly Bill 5, which took effect in January 2020.

AB 5 required companies to apply the ABC test to determine worker classification. According to this test, a hiring entity must demonstrate that a worker:

• A — operates free from the control and direction of the hiring entity.
• B — performs work that falls outside the normal course of the entity’s business, and
• C — is independently engaged in an established trade, occupation, or business of a similar nature to the work being performed.

Many argue that gig economy companies do not meet the criteria of the ABC test, while the companies themselves maintain that they do. As AB 5 progressed through the legislature, gig companies united to address a common concern: the potential for expanded labor rights for their workforce.

In August 2019, Uber and Lyft initiated this effort with an initial investment of $60 million towards the ballot measure that would become Prop 22. This figure grew to approximately $205 million by November 2020, with contributions from companies such as Postmates (now owned by Uber), Instacart, and DoorDash. This substantial funding makes Proposition 22 the most costly ballot measure in California since 1999.

The ballot measure, now in effect, provides several key benefits:

• A guaranteed minimum earnings rate of at least 120% of the minimum wage during passenger or item pickups and drop-offs.
• A reimbursement of 30 cents per mile driven while engaged in work.
• A healthcare stipend.
• Occupational accident insurance for injuries sustained while on the job.
• Automobile accident and liability insurance.

Prior to the Prop 22 vote, Cherri Murphy, a ride-share driver for Uber and Lyft and lead organizer at Gig Workers Rising, was deeply involved in the organization’s efforts to counter the significant financial resources deployed by tech companies to secure the classification of gig workers as independent contractors.

“We faced a formidable challenge,” Murphy told TechCrunch. “We were up against a $205 million campaign, but I remained hopeful that we could succeed.”

“This impacts my life directly, and I will continue to organize and unite thousands of drivers across the state and nationwide,” Murphy affirmed.

It is also important to note that Prop 22 does not permit retroactive application, according to Ray Fuentes, a legal fellow at The Partnership for Working Families, as reported to TechCrunch.

“It is reasonable to expect ongoing enforcement efforts, as well as potential private legal action, as workers are entitled to back wages that the law previously mandated companies to cover,” Fuentes stated. “It’s crucial to understand that this does not mean companies have escaped all liability.”

Following the passage of Prop 22, Uber and Lyft have already been unsuccessful in persuading a California court to reconsider a decision regarding a preliminary injunction. In November, a judge rejected their petitions for rehearing concerning the injunction, which was initially affirmed in October. This injunction stems from a lawsuit filed by California Attorney General Xavier Becerra and several city attorneys, alleging that Uber and Lyft were misclassifying employees in light of AB 5’s implementation.

Gig Workers Rising also intends to closely monitor whether these companies fulfill their commitments regarding healthcare subsidies and minimum wage guarantees.

“We must ensure they are held accountable throughout the state,” Murphy said. “We recognize that racial justice is inextricably linked to economic justice. The system that perpetuates violence against Black people is the same system that enables the exploitation of Black and brown workers, and Uber, Lyft, and DoorDash are adept at this practice.”

The Partnership for Working Families also plans to oversee the compliance of gig economy companies with the new law they helped establish.

“They made numerous statements during the Prop 22 campaign about prioritizing worker well-being, and they should uphold those commitments,” Fuentes said. “Workers are interested in holding companies accountable for their promises made under Prop 22, as well as their public statements.”

While The Partnership for Working Families is not currently pursuing this directly, Fuentes mentioned that some are considering legal challenges to limit the scope of Prop 22.

“This is a matter being actively considered by advocates on the ground,” he said. “Any significant changes to the law are subject to scrutiny regarding their legality and constitutionality under California law.”

At Rideshare Drivers United, a coalition representing approximately 20,000 drivers in California, a primary focus is on the enforcement of Prop 22.

“Determining how the state will enforce Prop 22 will be a critical aspect,” RDU driver-organizer Nicole Moore told TechCrunch. “However, we also want to prevent this type of exemption from spreading across the country like a disease.”

Considering California’s current COVID-19 pandemic-related shutdown, RDU is concentrating on assisting drivers who are about to lose access to pandemic unemployment assistance on December 26, 2020. Had drivers been classified as employees, they would have been eligible for standard unemployment benefits.

“That’s why this situation is so frustrating. Drivers are on the verge of losing PUA, which is essentially unemployment,” Moore said. “I’m deeply concerned about the drivers who rely on PUA. I advise them to contact EDD and explain that they were misclassified and should have been eligible for unemployment. These are the issues we are currently addressing because no one else is.”

“This widespread misclassification is facilitated by ambiguous legal standards that grant excessive discretion to employers, insufficient protection to workers, and inadequate guidance to government agencies and courts,” the website states.

Biden intends to collaborate with Congress to establish a federal standard modeled after the ABC test.

Whether Biden will follow through on this commitment remains to be seen. It is worth noting that while Vice President-elect Kamala Harris’ brother-in-law, Tony West, is the head of legal at Uber, Harris opposed Prop 22.

“We must continue to hold them accountable for their promises and ensure they deliver on them,” Murphy said. “I maintain a degree of optimism with a Biden administration compared to a Trump one, but it’s not a guarantee. I anticipate a continuous struggle as workers, battling issues at the national, state, and company levels simultaneously. We will need to manage numerous challenges at once.”

The Partnership for Working Families is also planning to lobby federal policymakers and oppose the proposed rule regarding independent contractors. In May 2019, National Labor Relations Board General Counsel Peter Robb, a Trump appointee, issued a memo stating that Uber drivers are contractors, not employees. Fuentes hopes that once Biden appoints a new general counsel, the NLRB will reverse this position.

“We intend to communicate to federal policymakers that this ‘third way’ of classification is not as advantageous as it appears,” Fuentes said. “Our working assumption is that it may not function as companies envision.”

Uber and Lyft are looking to advance Prop 22-like legislation in other jurisdictions. Given Uber and Lyft’s opposition to classifying gig workers as employees, it was unsurprising when both companies announced their intention to pursue similar legislation in other parts of the country and the world. During an Uber earnings call, Uber CEO Dara Khosrowshahi stated that the company would “more vigorously advocate for laws like Prop 22.” He added that a priority for the company would be to collaborate with national and international governments “to make this a reality.”

Lyft’s leadership made comparable statements. During the company’s earnings call, CEO Logan Green indicated that they would pursue Prop 22-like legislation in other states. However, the next major election is not until 2022, and it is unlikely Lyft and Uber will wait that long. When asked for specifics regarding their plans, Uber stated they had no new details to share, but referred to their previously published priorities. Lyft did not respond to TechCrunch’s request for comment.

At the National Employment Law Project, its team of attorneys are preparing for a legislative push from companies like Uber and Lyft in the coming year.

“I believe they will adopt the Proposition 22 model—this unprecedented package of corporate-backed anti-worker laws—and present it as legislation, rather than a ballot initiative, rebranding it as ‘independent contractor plus’ and bringing it to state legislatures,” NELP Staff Attorney Brian Chen told TechCrunch. “They are clearly labeling it ‘independent contractor plus’—attempting to present it favorably. But beyond the corporate messaging, they are trying to exclude more and more workers from basic workplace protections.”

Chen added, “We already know these companies and their lobbyists—they’ve been meeting with lawmakers and creating sham advocacy groups to claim that economic stability depends on independent work.”

Lyft, for instance, has established external organizations that promote the independent contractor classification. Two such organizations are Illinoisans for Independent Work and New Yorkers for Independent Work. Illinoisans for Independent Work was founded in June and funded by Lyft with $1.2 million, according to committee filings. The stated purpose of the committee is “to support candidates who share the ideology of our organization and the value of independent work.”

New Yorkers for Independent Work is similarly funded by Lyft. To date, Lyft has loaned the committee $1.25 million, according to the committee’s financial disclosures. Lyft made its initial loan contribution in June, followed by another in September.

Looking ahead, it is difficult to predict the next steps of companies like Uber and Lyft, Chen said, but they will likely target large markets.

“They will likely focus on areas where they know there has been on-the-ground worker organizing and activism that they would like to suppress, and where enforcement has been strong against the company,” he said.

Chen identified New York, Illinois, Massachusetts, New Jersey, Colorado, Pennsylvania, Washington, Oregon, and Michigan. Wherever these companies pursue this battle, Chen stated that NELP will be actively involved in resisting their efforts.

And NELP will not be alone. Bain stated that she and her colleagues at GWC have already contacted several state attorney general offices and state-level labor departments regarding their laws.

“We already know companies are doing this proactively, so we need to be proactive as well,” Bain said. “I believe there is much we will face. It depends on the individuals appointed to labor positions and their actual principles and values, but I am somewhat more optimistic. Things that were impossible under Trump will be very difficult, but not impossible, under Biden.”