Gig-Economy Giants Will Back $90M Ballot Measure to Stop California Labor Bill

Uber and Lyft drivers rally at a park near Los Angeles International Airport on May 8, 2019. (AP photo/Damian Dovarganes)

(CN) – Gig economy giants on Thursday threatened to pour $90 million into a ballot measure to defeat a piece of California legislation that would classify their workers as employees entitled to minimum wage and overtime, rather than as independent contractors.

Uber, Lyft and Doordash pledged $30 million each to support a 2020 ballot measure that would overturn the proposed law. The companies say their business models rely on gig workers to provide rides, food deliveries and other app-based services to consumers.

“Doordash is prepared to join a broad coalition of those in the gig economy to file and qualify a ballot measure to protect the legal rights of Californians who choose to work as independent contractors in the modern, app-based gig economy,” Doordash said in a statement Thursday.

The announcement comes one day after Uber and Lyft offered to guarantee a $21 per hour minimum wage for drivers along with injured workers’ protection and paid sick leave, for those who work at least 20 hours per week, in exchange for a carve-out in the proposed law.

Introduced by Assemblywoman Lorena Gonzalez, D-San Diego, Assembly Bill 5 would codify the labor standard established by the California Supreme Court in its 2018 ruling Dynamex v. Superior Court, which makes it harder for companies to classify workers as independent contractors.

Responding to the companies’ threat to fund a ballot measure, Gonzalez on Thursday said the move follows a long tradition of “Wall Street billionaires” spending fortunes to back ballot questions that would hurt the middle class to benefit the rich.

“The voters of California won’t stand for billionaires allowing their workers less rights than Wal-Mart employees,” Gonzalez said.

A spokesman for the California Labor Federation, which supports AB5, called the proposed ballot measure “a cynical approach” that he believes will backfire on the gig-economy giants.

“They’re failing to comply with the law currently by denying basic protection to their workers,” California Labor Federation spokesman Steve Smith said by phone. “They’re trying to get out of these obligations by spending massive gobs of money on a ballot measure. We don’t’ think that’s going to fly in California.”

Uber and Lyft have both argued that without an exemption, their drivers would lose the ability to make their own schedules and work whenever they want.

Smith called claims regarding a loss of flexibility for workers “a red herring.”

“There is nothing in AB5 that would prevent Uber from offering complete flexibility as they do now in the future,” Smith said, adding that Uber and Lyft are threatening to take away that flexibility if the law passes.

Lyft said in a statement that it is still working to find a solution that will provide drivers with more worker protections without jeopardizing the flexibility they value.

“We remain focused on reaching a deal, and are confident about bringing this issue to the voters if necessary,” Lyft spokesman Adrian Durbin said in a statement.

AB 5 cleared the California Assembly in May and was approved by the state’s Senate Labor Committee in July.

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