Proposition 22: A Voter Guide From The Workers’ Perspective

Summary: This is a comprehensive guide to California Proposition 22, including every argument and counterargument, paired with statements from gig workers themselves.

The guide is written in a Q&A format and follows my journalistic process as I try to figure out, for myself, the answer to this question: what’s the best way to vote?

I’ve done 7 years of journalistic reporting on gig policy, 3 years managing economic field pilots with gig workers directly, and a series of original state-wide surveys on recent California law. After all this work, I still personally find Prop 22 a frustratingly complex law because it’s nearly impossible to predict what will happen if it passes or fails, which makes it difficult for workers to give simple answers about how they feel.

Please leave any comments on the guide or reach out to me directly. I intend to make this an updated resource for voters and journalists.

(a spreadsheet with all the arguments and experts is here)

FAQ Table of Contents:

SECTION 1: Basics And Stories

• Q: What Is Proposition 22?
• Q: Uber drivers are currently independent contractors. Why do we need a law to keep them that way?
• Q: Very briefly, what are the arguments for and against Prop 22?
• Q: I usually just rely on endorsements to determine how I vote. Who supports or opposes it?
• Q: KEY QUESTION: These arguments seem too abstract. Are there stories that can humanize the debate and give me the drivers’ perspective?
• Q: What does polling of gig workers reveal about support for Prop 22?

SECTION 2: Evidence And Counterarguments

• Q: Is there any hard data on how gig companies impact overall wealth?
• Q: Wait, how can gig work lead to more stable income for workers? Isn’t self-employment inherently less secure?
• Q: If Proposition 22 fails, will it lead to higher income for workers?
• Q: Why don’t app companies just pay drivers more?
• Q: Maybe these companies are just run on an inherently bad financial model and deserve to go broke?
• Q: What is the counter-argument to threats by companies of reduced hours or eliminating jobs?
• Q: Is there any industry that has tried to build more flexible scheduling technologies for drivers?
• Q: Some drivers say they earn less than minimum wage. Other drivers report earning thousands per week. What’s the reality?
• Q: Why don’t rideshare drivers qualify as self-employed?
• Q: Could Prop 22 create higher (or lower) standards for worker benefits?
• Q: Will Voting Against Prop 22 be enough to ensure workers have the kind of worker rights/income that labor organizations promise?
• Q: Are there alternatives to regulation that could boost wages?
• Q: Do drivers feel exploited?

Section 3: Things I’ve Changed My Mind About

• Q: Will Prop 22 have its intended impact?
• Q: Did app companies sell a false dream?
• Q: Are unions representing “workers”?
• Q: Does self-employment scale?

SECTION 1: Basics And Stories

Q: What Is Proposition 22?

California Proposition 22 (2020) is a ballot to determine whether the kinds of workers who drive for app-based companies like Uber can remain independent contractors, or whether they should be reclassified as employees. It would also set minimum wage standards, safety standards, and create portable contributions for healthcare insurance.

A vote FOR Proposition 22 is to maintain the independent contractor arrangement that gig workers have had since the beginning of ridesharing, and add wage, safety, and benefit standards.

A Vote AGAINST Proposition 22 is to change this arrangement to being employees.

Q: Uber drivers are currently independent contractors. Why do we need a law to keep them that way?

In September 2019, California legislators passed Assembly Bill 5 (AB5), which broadly limited who could be considered an independent contractor. The main author, Assemblywoman Linda Gonzales, specifically targeted Uber, Lyft, and other app-based companies, hoping to reclassify their workforce as employees.

Since AB5 was passed last year, a number of trade groups, such as writers and musicians, have successfully lobbied lawmakers to amend the law and create exceptions to keep their occupation eligible for contractors. The state legislature did not grant app-based driver and delivery workers an exception, so proponents wrote Proposition 22.

Read more about Assembly Bill 5 (AB5) here.

Q: Very briefly, what are the arguments for and against Prop 22

For:

• Polls show that majority of gig workers want to remain independent contractors
• Forcing employee status will eliminate jobs and flexibility
• The proposition adds best-in-the-nation standards wage and benefits for independent contractors of drivers and couriers

Against:

• Gig workers will earn more as employees
• Gig workers will have better benefits as employees
• The proposition language makes it difficult for the state legislature to later amend the law

Q: I usually just rely on endorsements to determine how I vote. Who supports or opposes it?

The California NAACP is probably the most recognized name supporting Prop 22:

“Driving with these platforms provides an accessible, low barrier-to-entry way to earn income for those who often find traditional employment challenging — communities of color, seniors, disabled veterans and those formerly incarcerated.” They continue, “The challenges faced by Black Americans in accessing unemployment assistance, business loans, and other pandemic assistance funding today are the direct result of racist policies that systematically disenfranchise Black Americans because they do not look like the traditional employees and businesses for whom these programs were designed.”

The California Labor Federation is probably the biggest name in opposition.

“Instead of providing drivers with a real living wage and job protections that all workers deserve, massive gig corporations plan to spend more than $100 million to avoid complying with the law.”

You can view the rest of the (growing) list of endorsers here.

I generally vote Democrat and consider myself pretty liberal, but Prop 22 is causing a rift within the Democratic Party, so endorsements don’t really help me answer the question.

Q: KEY QUESTION: These arguments seem too abstract. Are there stories that can humanize the debate and give me the drivers’ perspective?

Over the last 7 years, I’ve spent a lot of time getting to know the personalities of the gig economy.

Behind the political opinions, I hear a lot of personal stories of depression, guilt, loneliness, and hope that, instead of speaking honestly, come off as sarcasm and anger.

For instance, there are a lot of older, retired workers who drive out of a sense of purposelessness. They’re stuck at home, struggling on a fixed income.

“I was going to kill my husband or go back to work,” one driver told me. “I love Uber…best job I’ve ever had”.

“Let’s say I won the lottery, after that, I would still drive Lyft”, said another driver. I heard folks like him tell me that they loved talking to people. They are lonely. On the road, they are meeting new people, exchanging stories and getting back their sense of worth.

Additionally, in San Francisco, there’s a lot of Brazilian drivers. I happened to live in Brazil years ago and, in my broken Portuguese, I would ask why they drove. Many escaped South America’s terrible economy to learn English and earn a better living in the global market. It’s hard for them to pass interviews for employee work. While driving, they practice speaking with passengers with the hopes of one day returning and providing for their family with the kind of money that a bi-lingual speaker can make.

But, on the other hand, I also heard my fair share of financially desperate drivers. Many were lured in by splashy ads promising good income, only to see their wages dwindle as more drivers flooded the market

“I have constantly seen my wages decrease while their profits grow,” said Carlos Ramos, a rideshare driver who is affiliated with the Proposition 22 opposition, Gig Workers Rising. There are numerous reports of drivers sleeping in their cars to work enough hours to pay bills.

I follow a bunch of driver messenger boards, where frustrated drivers gather online to denounce companies.

For instance, after receiving an anonymous complaint that his driving speed made a passenger feel unsafe, one driver took to a Facebook group to complain about unfair termination standards:

“My mobile is mounted 100% (never text of answering phone calls) and I never drive faster than the traffic …F*** this shit , again F*** uber and f*** their cheap ass passenger!” [Expletive censored]

The feelings of powerlessness and accusation are palpable in online forums, which eventually swelled into connections with labor unions happy to take up the cause of giving workers more say in product decisions.

But, there’s also deep resentment of labor among some drivers. One driver expressed feeling trapped in financial difficulties because he did not have the flexibility to earn more money at this other job.

‘You want to earn extra penny, you cannot do it’, one driver told me, who said he worked for the postal service for 10 years. “They have a union”.

There are no easy answers here and, whichever way the vote goes, there will be casualties.

Q: What does polling of gig workers reveal about support for Prop 22?

I had to write an entirely separate post about all the polling, but here’s the upshot:

Every poll I’ve seen shows that a majority of workers prefer to be contractors. However, there is a debate about why they answer this question and how to represent a “majority” of drivers.

If I consider a “one person, one vote” approach, where I equally weight all current and interested drivers, whether they have a strong opinion or not, nearly every poll will conclude that the vast majority drivers prefer contracting.

If, however, I give more voice to full-time, economically distressed drivers who have strong opinions, it’s hard to determine what drivers want.

Here’s how I get to this conclusion: polls by the popular RideShare guy blog, which is arguably the most cited source, consistently finds that greater than 70% of drivers prefer to be contractors.

But, an alternative approach was conducted by UC Santa Cruz, which re-weights respondents by the number of hours worked. The researchers argue that since full-time drivers do the lion’s share of actual driving, polls give them more of a voice. To conduct this survey, pollsters asked drivers on the street and in cars (prior to COVID-19). While it did not reveal any political preferences, full-time drivers were more likely to rely on gig platforms as their primary source of income.

So, do the majority of full-time drivers want to be employees? Uber financed a third-party poll which found that a majority of self-identified full-time drivers still prefer independent contractor status.

In refutation to the argument that a majority of polls show favorability toward contracting, labor advocate Rey Fuentes says that the reason many prefer contracting is because the current labor market doesn’t have the kind of protections that other European nations provide. Voting against Prop 22 will be a stepping stone toward more labor-friendly policies:

“The ravages of the neoliberal market regime that has left so many people unprotected without these baseline protections has led individual workers to seek out the flexibilities that isn’t available because things like health insurance, paid sick leave, paid family leave are not available to them.”

Finally, a big problem is that these polls exaggerate the perception that most drivers have a stable, strong opinion. When I poll drivers and add a prominent option for “Don’t Care/Don’t Know/Other”, most will choose these options:

“Sounds cool”, said one respondent. “i dont know enough to comment”, “I like to work”, “Don’t care,” wrote others.

When I take Uber/Lyfts, I usually have to spend about 20 minutes explaining the very basics of AB5 and Prop 22 to my drivers, since few bother to form an opinion. Even after explaining the issue, most have opinions that could be characterized as lukewarm, at best. Gig work plays an essential, but an often temporary role for the vast majority of workers, who, even if they don’t totally enjoy being contractors, don’t earn enough to spend the time caring about politics.

It’s not the kind of thing that garners retweets. We have a social media landscape that is incentivized to widely exaggerate conflict and cherry-pick the most outraged voices. This makes it extremely difficult to design legislation because policymakers listen to the loudest voices.

Or, as one person posted in an online forum for drivers:

“I think its unfortunate that this [is] being portrayed in the media as a David and Goliath story, with Uber and Lyft (and Doordash, etc. being the Goliaths). The problem, as I see it, is that labor laws have not kept up with changes in the workplace”

Updated: Here is a rolling list of more recent polls

• Poll by Lyft/Morning Consult of drivers
• Private poll backed by Uber
• 10/26 polling showing that a slight plurality favoring Prop 22

SECTION 2: Evidence And Counterarguments

Q: Is there any hard data on how gig companies impact overall wealth?

By far the best data I’ve seen comes from JP Morgan Bank, which can look at people’s bank records — a much more accurate estimate than self-reported surveys. According to JP Morgan, on average, workers who get income from gig platforms have more stable wealth.

Job platforms offset a 14% dip in non-platform income with an additional 15% of income. The report concludes:

“The Online Platform Economy adds an important new element to existing labor markets, however. Simply put, landing a platform job is easier and quicker. Individuals can, and do, generate additional income on labor platforms in a timely fashion when they experience a dip in regular earnings. This is a potentially far better option to mitigate or weather volatility, if the alternatives are to constrain spending or take on additional credit.”

Q: Wait, how can gig work lead to more stable income for workers? Isn’t self-employment inherently less secure?

This may have been true in the past, but automation has led to increased job instability. Advances in scheduling algorithms can rapidly shrink or expand hours in anticipation of consumer demand. Indeed, some states, such as Oregan, have had to pass laws mandating that companies give workers advanced notice of scheduling changes.

In the study on gig workers and income stability, JP Morgan found that 86% of income volatility came from within the same job, which means folks with employee arrangements still experience instability.

One of the most telling anecdotes of this new economic phenomenon I’ve found is from online driver forums.

In one very active online forum where gig workers share tips and experiences, Uberpeople, posters were asking about what it’s like to drive for Eaze, the cannabis delivery company because, under California law, they must be treated like employees and not independent contractors.

That is, in many ways, cannabis delivery is a living laboratory for what life would be like should Uber and Lyft be forced to reclassify drivers as employees under California Assembly Bill 5 (AB5). So, naturally, gig workers are quite curious about the experience of drivers who get treated as employees.

“It varies depending on tips that day, the shift you work (day vs night shifts), number of orders you get per day and if it’s a weekend or weekday. But you can expect to average between $140 to $220 per shift. And on the slower days I keep GH [GrubHub] and Caviar on too [Emphasis added]”

That is, a worker who is supposedly “lucky” enough to get one of the relatively few slots available as an employee delivery driver still supplements their income on other platforms that allow independent contracting.

This speaks to the fact that, for a variety of reasons, traditional employment is becoming less secure and spurring workers to seek supplemental gig work.

Q: If Proposition 22 fails, will it lead to higher income for workers?

There are competing models. Part-time drivers are likely to earn a higher hourly wage, but may make less income overall. It is unclear whether there will be more or less full-time drivers.

“Although median hourly compensation for TNC drivers will probably increase, not all drivers will experience a pay increase. High-performing drivers under the current compensation regime may see lower overall earnings, especially if they value take-home pay more than benefits,” concluded the free-market-oriented The Competitive Enterprise Institute.

On the other hand, a report by the National Employment Law Project (which is associated with Labor opposition) estimates that because companies will have to reimburse mileage, a full-time worker in San Francisco would earn about $209 more per week (or $95 for part-time work) if Prop 22 fails, as drivers will earn more as employees.

Another study estimates that drivers will earn more than $25 if Prop 22 passes.

However, app-based companies could slash full-time hours and eliminate thousands of jobs,

“Based on the latest available data prior to the COVID-19 pandemic, requiring drivers to become full-time employees will reduce the number of needed drivers from more than 1,000,000 to less than 100,000,” concluded a privately commissioned report by Prop 22 supporters from UCLA’s Professor David Lewin (this reaches a similar conclusion as a study by from UCLA economist Leo Feler).

Or as, one driver lamented on an online forum:

“This will kill Uber and Lyft (and doordash and things like that) and we will go from complaining about earning peanuts to complaining about not having the extra earning opportunity at all.”

Q: Why don’t app companies just pay drivers more?

They tried. It failed:

“The overwhelming story is that it doesn’t seem to matter what Uber does with fares” said John Horton, an NYU assistant professor, who analyzed a study of what happened when Uber raised prices. In the end, drivers took less trips and overall income stayed the same (the study was done in partnership with Uber).

As explained by the Wall Street Journal:

When there is a fare cut, drivers’ pay per trip falls but riders flood the service, offering more business. A price hike eventually lures more drivers than Uber needs and scares away riders. The changes are short-lived as an equilibrium is reached after about eight weeks, and drivers’ average pay comes out the same.

Now, companies could try to make less money by redistributing earnings from staff engineers and investors, but every driver app alternative that has attempted to classify drivers as employees has gone broke

App companies spend far more than they make. Uber lost $2.9B in the first quarter of 2020. Lyft’s stock has been cut in a 3rd from its IPO and both companies have laid off large swaths of their staff.

The companies still have to offer engineers competitive salaries while maintaining a revenue rate that allows for future investment.

App companies are operating under difficulty constraints, considering that consumers, employees, and investors all have other options.

Q: If it is not financially viable to pay drivers more, maybe these companies are just run on an inherently bad financial model and deserve to go broke?

This is a frequent topic of debate on driver forums, especially as more liberal blogs start advancing the idea that gig labor platforms shouldn’t exist.

“Good riddance!” posted one driver in an online forum.

“So you advocate putting everyone in this group you created out of a job? That’s seriously messed up,” responded another.

It’s hard to argue what companies definitively “deserve” when there’s pretty strong disagreement within the driver community about their value.

Q: What is the counter-argument to threats by companies of reduced hours or eliminating jobs?

Gig companies frequently argue that they will have to reduce job opportunities should Prop 22 fail. Uber economist Alison Stein wrote about why employee models are inherently less flexible,

“Think about it this way: Starbucks offers one of the most flexible part-time jobs around, but baristas can’t just walk in unannounced, decide they will only make lattes while refusing all orders for cappuccinos, leave during the morning rush to go pick up their kid from school (without permission from their boss), and return to work at a Peet’s Coffee. That would absolutely be allowed under the law, so why doesn’t it happen? The answer is simple: businesses simply won’t survive if they have zero control over what their hourly employees, whether full- or part-time, actually do.”

I posed this argument to critics. Did they think threats to reduce employment and hours were credible?

The counter-argument seems to be a widespread belief that tech companies can use their hefty cash reserves and engineering teams to design flexible scheduling systems, potentially more flexible than anything in existence today.

“It’s Uber. Look, if they’re so clever and innovative, they will figure this out,” argued author Steven Hill, who noted that construction trades have flexible schedules along with benefits.

“The fact that they have these cash reserves and they can make this transition using the access to the technological talent that they have — it still remains eminently possible that workers who want to remain working 10 hours a week can continue to do that, but still also get the protections that are available to them,” Rey Fuentes, from the Partnership for Working Families told me.

Critics contend that threats to reduce jobs are mostly empty. But, even if companies will follow through, regulation will give them an incentive to build out entirely new technologies that allow for greater flexibility for workers who want it.

Q: Is there any industry that has tried to build more flexible scheduling technologies for drivers?

Yes! In California, when marijuana was legalized, the law mandated that drivers had to be treated like employees, and there was crossover between the technological talent that built ridesharing and the new marijuana delivery startups.

The results have been…mixed. Reviews on Glassdoor for cannabis companies are generally lower than Uber or Lyft. One driver for a cannabis company explained:

“Pros

Great Money! I made more than any other delivery service because of big tips.

W2 employed by the dispensary.

Cons

This may be the biggest tease of all. I waited 3 months to get “approved” by the city.

I got the call up and I got 3 days over 4/20 weekend. Then NOTHING for the next 4 weeks. Finally told by dispensary management that no new hires are getting hours.”

Is this kind of worker better off? — hard to tell.

Q: Some drivers say they earn less than minimum wage. Other drivers report earning thousands per week. What’s the reality?

Gig work is a skill and earnings often increase as workers learn how to split their time between different opportunities. This is especially true if workers are new to freelancing.

“Unlike other jobs where everybody makes the same amount from day 1, a more savvy driver will be able to make more than a brand new driver since there are all sorts of tips and tricks that will impact your bottom line. As you drive more, you’ll gain valuable experience and likely increase your income,” wrote Harry Campbell of the widely read blog, TheRideShareGuy.

I analyzed data from a nonprofit organization that partnered with the city of San Francisco to train underemployed workers in freelancing (yes, at the same time California was limiting gig work, the city workforce development agency was actively training workers how to be better at it).

I found that over a 9 month period, earnings from gig work increased to 20% of total earnings. This jives with larger-scale evidence from Uber that driver earnings increases significantly between their 100th and 2000th car ride.

Unsolicited, while I was surveying gig workers on Amazon’s microwork site, one of the respondents found my email and wrote this to me:

“I am 69 years old, retired IT and working part time on the weekends as a Security Guard/Patrol Officer. About a year ago, I was thinking that it would be nice to have something to make a little extra money each month to pay for some extras. So I started mTurk. It started slow, but then I found out I was good at doing surveys. I learned more and more and now I am making about $150 a week just on surveys.”

So, it appears that gig workers can learn to earn more.

Q: Why don’t rideshare drivers qualify as self-employed?

Critics contend that gig workers don’t meet the legal definition of self-employment because they:

• Cannot determine their own rates
• Get terminated if they refuse some trips
• Get routed by an algorithm

App companies have responded by testing out new features, including letting some drivers in California determine their own rates. However, under AB5, freelancers cannot do anything “core” to what a company sells. A freelancer might be able to clean the floors of a tech company, but not be a programmer. Uber and Lyft have argued that, at their “core”, they are logistics technology, not about driving. This has not persuaded any court in California.

“Drivers are still core to what it does,” says Catherine Fisk, a law professor at UC Berkeley.

Q: Could Prop 22 create higher (or lower) standards for worker benefits?

Prop 22 adds language that (in some ways) creates new, best-in-the-nation benefits standards for freelancers.

After just 15 hours of work, Prop 22 will allocate revenue to a healthcare benefits scheme that workers can use towards health insurance. For drivers who work more than 25 hours, app-based companies will contribute 82% of the cost of the average Covered California health insurance premium.

“Prop22 will support providing new health care benefits available after just 15 hours per week, with a stipend equivalent to the cost of a full Covered California plan paid after just 25 hours per week” writes the Asian-American Resource Center.

However, a critic, Steve Hill, author of Raw Deal, argues that Prop 22 still offers much less than the typical cost of employee benefits. “They come to the table many times with 2–3%. That’s nothing…They have to come to the table with 20% minimum.” <double check>

In addition to the healthcare contribution, under Prop 22, drivers get:

• 120% of area minimum wage and 30 cents per ‘engaged’ mile
• Safety limits restricting work to 12 hours per day
• Availability of accident insurance and for the benefit of a spouse of dependent
• Development of anti-discrimination, sexual assault and zero-tolerance for intoxicated driving policies

Q: Will voting against Prop 22 be enough to ensure workers have the kind of worker rights/income that labor organizations promise?

Unlikely. AB5 seems to be a staging ground for a strong push toward union expansion.

Gig regulation advocate and UC Hastings Law professor Veena Dubal has written a very thorough history about how taxi services in San Francisco went from largely unregulated independent service providers to an “aggressive” regulatory regime that controlled prices, hiring, and scheduling through what was eventually a tightly controlled taxi market.

Even if Prop 22 fails, gig companies will have pretty broad latitude to entirely exit a market or severely restrict hours, even if lawmakers can manage to enforce employment classification under AB5.

In order to get guaranteed hours and wages, California may need to regulate driving and delivery in the same way it regulated taxis.

Q: Are there alternatives to regulation that could boost wages?

Yes (well, maybe yes!). I ran a workforce development pilot that was a partnership between the City of San Francisco and a nonprofit called SamaSchool, which taught underemployed workers how to increase their earnings through freelance work. With training, gig workers can learn to better use their time and more efficiently choose jobs that best fits their talents.

An analysis of the alumni showed that by month 9, gig work was roughly 20% of their income and the median boost in earnings was around $2,300 over a 6 month period, which falls within the range of the 10–30% boost in hourly wages that reclassification to an employee may give gig workers.

Here’s one story from the (now defunct) non-profit:

Kristopher managed to take what he was learning through Samaschool and combine that with his love of fitness and computers to find work. He found contracts through two online work platforms: Field Nation and WorkMarket. He attributes the experience he gained through those initial gigs to getting his first major contract as a replay technical analyst with the NBA. The day after he signed his contract, he flew to California to start working. Shortly thereafter, Kristopher was hired by the NBA full-time. Kristopher continues to perform independent work once or twice a week. He attributes his success to the experiences he received from both Per Scholas and Samaschool. When asked what advice he has for other independent workers, he says, “I definitely encourage people to do more independent work, instead of waiting for ‘that job’ to come. For the NBA, I got second and third call backs because I had that early experience [with Field Nation and WorkMarket].”

Q: Do drivers feel exploited?

This is one of the strangest parts of the issue. There is a fierce debate between drivers over how much money they make and whether their opinions of their own experience are valid.

“[T]he majority of drivers don’t have the first clue what is good for them,” one driver wrote in an online group. Drivers who say they like Uber or Lyft are frequently attacked as ignorant or turncoats.

I ended up asking one online driver forum about this debate. How could they call their colleagues ignorant? One wrote,

“There’s a smaller percentage of rideshare drivers like myself who actually did the math. I knew the costs per mile…I’d say 80% of drivers do not accurately compute these costs.”

In response, another commenter wrote, “But bro… ‘the “made x and so bucks per hour after expenses’ only hits that hard from the employee mindset…What really makes the bigger difference is how much of our cash is available to us in a moment’s notice.” That is, he didn’t mind potentially making less money because Uber gives him quick access to cash, which is more important than long-term hourly wage.

I think relatively few drivers feel exploited, but critics would contend it’s because they don’t know how to calculate their value.

Section 3: Things I’ve Changed My Mind About

Q: Will Prop 22 have its intended impact?

The more I learn about Prop 22, the more I think it’s going to be a Pyrrhic victory for either side, with long-lasting and unintended consequences to follow. Ultimately, I think both policymakers and tech companies are far more limited in the powers they think they have over the economy.

I think a vote NO on Prop 22 is going to awaken a sleeping giant of millions of pro-self-employment voters, many who are not fans of traditional labor. Online forums of AB5 critics have sprung up and are very active. As of this writing, “Freelancers Against AB5” on Facebook has over 18,000 members, many posts have over 100 comments each and the community is supporting a new breed of freelance-friendly elected candidates.

Labor unions have long enjoyed dominance in the California legislature and we are witnessing the beginning of a new countermovement that will (eventually) cause labor trouble in ways they cannot predict, starting with what could be an overhaul of AB5.

On the other hand, a vote FOR Prop 22 will not be the end of classification lawsuits and, in order to win these, tech companies are going to have to continue offering very expensive concessions to keep legislators and activists happy. Proponents have already spent over $110 Million on Prop 22; there will likely not be political consequences for any elected officials whether or not the proposition passes. If anything, all the campaign money simply raises the national profile of legislators who fight tech interests, including those outside of California.

Finally, regardless of what happens with Prop 22 or AB5, what we call an “employee” arrangement will continue to look like flexible contracting as tech companies apply new technologies for flexible scheduling. These will be met with enthusiasm from the increasingly large workforce that chooses freelance work. At the same time, to stave off regulations, tech companies will have to pay contractors more and give them benefit-like compensation, further eating into their already diminishing margins.

There are economic forces in motion that severely constrain either what companies or the government can do.

Q: Did app companies sell a false dream?

Author Steven Hill reminded me that app companies had made big promises in the early days through ads that touted six-figure salaries. Many workers were making quite a bit of money.

In those days, the growth was exciting and companies got swept up in the rush of what was a booming new financial opportunity. But, as things took an obvious turn towards less pay, marketing departments still pushed a rosy narrative that masked the reality. They also never fully took responsibility for drivers that were sleeping in their cars to make ends meet or those that began to rely on it like a traditional job.

There were executives who had to have known that drivers didn’t understand that part of the venture capital model was to decrease the price of rides, ultimately eroding the hourly rate. They also knew they had drivers who were working during hours when they wouldn’t make much, clearly indicating that some people did not understand the costs associated with the arrangement.

Companies should have taken an aggressively proactive approach to ensure all drivers were fully informed about the situation.

As one driver explained to me in response to a question I posed to an online forum,” Rideshare is designed in a way to confuse and hide the true cost of the work, While rewarding and triggering you with positive reinforcement. All while the algorithm directs and manipulates you into a more positive for the company”.

Self-employment is hard — much harder than many people realize. I think app companies are culpable for selling this false dream.

Q: Are unions representing “workers”?

Traditional employment isn’t working for a lot of people, especially immigrants, retirees, students, and part-time caregivers.

In too many conversations, labor folks seem to sweep these workers under the rug as a “trade-off” that must be made to maintain a system designed mostly for single-employer, full-time unionized workers paying membership dues.

I’ve talked to labor advocates who believe that there are policies like those in Europe that could eventually cover workers who want more flexible arrangements. But, that won’t happen anytime soon.

It’s one thing to ask workers to voluntarily join a long-term fight. It’s quite another to make workers an unwilling sacrifice toward a cause in the name of “representation” and then blame them for being turncoats when they have very real immediate needs.

Q: Does self-employment scale?

I really wanted to believe this.

Self-employment provides essential flexibility and supplemental income to many workers. The early promise of gig platforms was that it allowed people to get the benefits of self-employment almost immediately and at much greater scale.

I have become much more skeptical of this promise after having managed a pilot program that taught lower-income people to use ridesharing and high skill freelancing to find better occupations. Our participants struggled with self-employment and many couldn’t manage to make it work.

Much of the tech industry relies on a freelance-to-employment pipeline, where people start out getting lower-pay one-off assignments and move up to steady jobs.

Theoretically, large-scale training and a healthy cash safety net could make entrepreneurial arrangements an optimal path toward a rising middle class. But, it’s more of a dream than a reality for now, and, as a result, the promise of the “gig economy” is out of reach for some meaningful percentage of people.

Contact me and disclosure

This guide is meant to be an updated guide to the proposition. If you have any questions, please reach me at research [at] greg ferenstein [dot] com.

I’ve written a lengthy post explaining my biases, along with financial disclosure (yes, I’m biased).