Gig Companies Go It Alone as They Launch ‘Dynamex’ Measure for California’s November Ballot

Ever since the California Supreme Court’s “Dynamex” ruling last year set a new test for when a worker is considered an employee, gig companies have tried to exempt their drivers and keep them classified as independent contractors.

Now, after failing to win that exemption in the Legislature, they’re turning to voters.

Uber, DoorDash and other “gig economy” companies took the first formal step toward what they’ve pledged will be at least a $90 million campaign fight Tuesday by submitting a potential November 2020 ballot measure to the state Attorney General’s Office.

“We’re trying to pair independent contractor status, and the flexibility that’s inherent with it, with what we believe — and the drivers behind us believe — is a fair package of economics,” campaign spokesman Brandon Castillo said at a news conference that included Sacramento area gig economy workers.

A coalition of labor unions opposed to the measure accused the gig companies of trying to “buy democracy away from drivers” and “cling” to an “exploitative business model.”

The initiative promises new benefits, such as a wage floor and health care subsidies, but doesn’t include Social Security benefits or the right to unionize.

That would appear to leave wiggle room for a potential compromise with organized labor in the coming months — something the gig companies say they’re open to. Under state law, initiative proponents have until late June to withdraw their ballot measure if an agreement is reached in the Legislature.

The narrowly tailored — and retroactive — ballot proposal would only apply to app-based ride hail and delivery drivers. In addition to Uber, Lyft and DoorDash, Instacart is on board and Postmates likely will be, too.

But drivers for those companies are split, and each side is putting forth its own examples.

Lynn Reagan says she needs the flexibility as an independent contractor to care for her four grandchildren, because their mother is on bed rest.

“If this was taken away, it would devastate me because there’s no job out here that I can get — especially at my age — that’s gonna allow me to come and go as I need to do,” she said at Tuesday’s news conference in favor of the ballot measure.

But another Sacramento-area driver, Jeff Perry, says he checked the math — and the ballot measure would cut his pay. He argues the only path to fairness is to make workers like him full employees.

“Drivers are saying, ‘This is poverty, we’re struggling,’ right? And then they come and they cut the pay, and then they put a nice name on it, really pretty name, fancy, right? Commit the $90 million, but they don’t tell the real story behind it,” he said. “And the real story behind it is, this is a pay cut.”

The ballot measure responds to the law signed last month codifying the California Supreme Court ruling. The law, Assembly Bill 5 by Assemblywoman Lorena Gonzalez, D-San Diego, exempts some industries, including doctors and hairstylists. But it left out drivers for gig companies and workers in more established industries such as trucking and janitorial work.

That spurred criticism during the legislative debate that the bill ought not to pick winners and losers.

But because the ballot proposal would only apply to app-based ride-hailing and delivery drivers, the gig companies are doing the same thing, leaving other industries on their own once again.

“The narrow scope of this initiative does not address the 70,000-plus independent owner-operator truckers, nor the hundreds of thousands of other independent contractors, who were not exempted from the ABC test in AB 5,” California Trucking Association CEO Shawn Yadon said in a statement, which referred to the three-pronged legal standard that determines whether a worker is an employee or not.

Indeed, a major question after the gig companies vowed to take their effort to voters was whether they would form a broader coalition or go it alone.

The disadvantage for the gig companies of going their own way is they will need to foot the entire campaign bill themselves. But the advantages are many: They could write the ballot measure however they want, they can control the message during the campaign and they’ll only have to defend their own baggage.

Besides, they have no shortage of money. In addition to Uber, Lyft and Doordash, which each pledged $30 million to the campaign last month, Instacart is now on board — and Postmates is expected to join soon as well.

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio, with support from the Corporation for Public Broadcasting, the James Irvine Foundation and the College Futures Foundation.