TransForm’s work around shared mobility and tech-enabled transportation services is driven by our belief that these innovations must prioritize the needs of people who have been left behind in the past.
We work towards a future that is multi-modal, and racially and economically just. We’ve seen shared modes of travel popularized by the gig economy play a unique role in getting us to that future — they make people more comfortable sharing and, in the best cases, bring those who mostly drive onto transit and micro-mobility. More transportation options encourage people to right-size their trips — choose the most appropriate travel option for the type of trip, instead of defaulting to a personal car. This is a huge reason why we’ve been partnering with Lyft to expand mobility options (with a focus on bikes and scooters) in East Oakland over the last two years. New technology should disrupt inequity and close the gap on the shortcomings of our old transportation systems.
This guiding vision for our work is a big part of what leads us to oppose Proposition 22 on the November 3rd ballot in California. However, this wasn’t a simple decision for us.
What would Prop 22 do?
To understand Prop 22, you have to go back to Assembly Bill 5, a law that California passed in 2019 classifying many gig economy workers as employees rather than independent contractors. AB 5 also guaranteed these employees new rights and protections, including minimum wage, overtime, unemployment, sick leave, and the right to form a union and engage in collective bargaining. Many gig economy companies opposed AB 5 because it would reduce profit margins by increasing labor costs, and pressure them to raise prices for their services. It would also likely reduce flexibility for gig workers, who came down on both sides of the issue.
Uber and Lyft are in an ongoing legal battle and have not started treating their workers as employees as required by AB 5. That complicates things, because we haven’t yet seen exactly how doing so will impact their service and prices, or what restrictions they may place on workers’ hours as a result of it.
Uber, DoorDash, and Lyft put Prop 22 on the ballot to exempt themselves from AB 5 and offer leaner benefits to their drivers, who would continue as independent contractors and keep their flexibility if the measure passes. Postmates and Instacart have also contributed millions to their efforts, making Prop 22 the most expensive ballot proposition in California history.
If Prop 22 passes, it would be very difficult for app-based drivers to gain the right to collectively bargain — what history has proven as the most powerful path to greater income and opportunity for workers who need it most. Prop 22 requires a 7/8ths vote of the Legislature for amendments to the initiative.
Why we’re recommending No on Prop 22
We believe that new mobility technology can be a force for good in the transportation sector. We've seen proof of that, even within the current paradigm. We’ve always said that strong policy interventions will be necessary to steer this innovation towards equity as it evolves. That’s what AB 5 does, if imperfectly.
We want gig workers to be able to build economic and political power. For years, but especially since Uber and Lyft went public, app-based drivers have faced declining earnings and increasing costs. Performance bonuses are harder to get. Drivers don't like being managed by an algorithm, and while Uber added a feature to allow drivers to choose rides headed towards a chosen destination, it then cut drivers’ pay 30% whenever they use that feature.
AB 5 would finally force app-based employers to internalize the costs of better wages and benefits, like other transportation providers do. It’s worth calling out that the gig companies behind Prop 22 have reached their current prominence not by being profitable, but by massive infusions of venture capital and externalizing costs that traditional transportation providers cannot. Fair’s fair, and it might help re-balance some of the inequities that have emerged inside the transportation sector with the rise of these companies. We are more familiar with the examples around Uber and Lyft disrupting their industry, but this exposé about food delivery app companies’ predation on the restaurant industry (or Cory Doctorow’s Twitter thread about it) is worth a look.
It’s important to acknowledge that if Prop 22 fails and these companies are finally forced to treat their drivers as employees, the adjustment will likely be painful on all sides. There will be significant impacts for app-based drivers, and likely for some vulnerable riders. Companies could impose a floor on how little drivers can work, and a ceiling capping drivers’ hours below full time, so they only have to pay partial benefits for part-time workers (like Walmart does). Less income and flexibility for many drivers would likely make these jobs less attractive for many and no longer viable for some. For riders, prices may rise and wait times might increase in some places. We know that riders with lower incomes may be negatively impacted, including those who are disabled, elderly, young, and lack safe and reliable transportation options.
Especially during the pandemic, we weighed these hardships heavily as we decided on our position. Many TransFormers belong to, live, and work in communities that would suffer the immediate shock of guaranteeing app-based drivers the wages, benefits, and protections that all workers deserve. Ultimately, we believe such short-term pain would be worth the long-term gains for worker rights, economic justice, and the health and safety of drivers and riders.
Drivers are the heart of these gig economy businesses and actually keep these tech giants up and running — they deserve full rights as employees, just like those who work at headquarters and build the software. Despite app-based employers’ claims to the contrary, better wages and terms for drivers will not end mobility innovation. In fact it would likely spur the best kind innovation — that which supports a just and green economic recovery.
New mobility solutions that can’t sustain new mobility workers are not the solutions we need.
At TransForm, we want to play the long game of undoing the root causes of systemic racism, and push our sector to advance equity and climate justice. Even if we can’t see exactly where the No on Prop 22 road ends up, we believe it’s pointed in the right direction and we’re committed to continuing to chart that course.
To learn more, please visit the No on 22 website and see this factsheet by the Partnership for Working Families and the National Employment Law Project. Also check out Silicon Valley Rising, which has been organizing on this for years in a broader campaign on employment rights within the tech sector.
This blog post is part of TransForm's November 2020 Voter Guide, which has all our recommendations on transportation and housing issues on the ballot in California and throughout the Bay Area.
The post was corrected on October 8 to add the link about the 7/8 threshold to amend the initiative, and delete our incorrect understanding that this was an "unheard-of hurdle."