Prop 22: Opponents Challenge Campaign Mailers

Those opposing California’s Proposition 22, the ballot measure aiming to maintain the classification of rideshare and delivery drivers as independent contractors, have submitted a formal complaint to the United States Postal Service today. The campaign working to defeat Proposition 22 asserts that the proponents of the measure do not meet the requirements for nonprofit postal rates and is requesting the USPS to revoke their mailing permit.

Utilizing nonprofit organization status for mailings results in significantly reduced costs. For instance, distributing between 1 and 200,000 standard-sized mail pieces to every address typically costs $0.302 per item. However, as a nonprofit, this cost is reduced to $0.226 per item, as stated by the USPS. The Yes on 22 campaign has acknowledged its formation as a nonprofit organization under section 501(c)(4) of the IRS code, which covers social welfare organizations. Nevertheless, the No on 22 campaign contends that the USPS made an error in granting the Yes on 22 campaign nonprofit approval.

A legal representative for the No on 22 campaign communicated with USPS Postmaster General Louis DeJoy, stating, “The nonprofit permit issued to the Yes on 22 campaign was granted improperly.” The letter continued, “[…] This improper use of a nonprofit permit by a corporate-funded $200 million campaign is unprecedented and requires immediate correction by the Postal Service.”

According to USPS regulations, any organization seeking to mail items at nonprofit rates must first receive authorization from the postal service confirming their eligibility. The USPS specifies that eligible organizations include “certain political committees,” but excludes “specific political organizations.” The political committees potentially eligible for nonprofit pricing, irrespective of their formal nonprofit status, are the national or state committees of a political party, and the congressional or senatorial campaign committees of the Democratic or Republican parties.

As of this date, the Yes on 22 campaign has raised $185,096,892 in support of its initiative. The Yes on 22 committee is comprised of companies such as Uber, Lyft, Instacart, and DoorDash, alongside drivers, small businesses, and public safety and community groups. The majority of its funding originates from Uber, Lyft, and DoorDash. Conversely, the No on 22 campaign has raised $12,166,063.

Mike Roth, a spokesperson for the No on Prop 22 campaign, released a statement saying, “It is shocking, but predictable, that the app companies fiercely defending their practice of underpaying workers would brazenly exploit the postal service.” He added, “This further demonstrates the avarice of these corporations, who are investing $186 million in a self-serving effort to enact a new law, yet declined to provide their workers with personal protective equipment during the pandemic.”

TechCrunch has contacted the USPS for comment and will provide updates as more information becomes available.