Last week, a much-anticipated initiative was filed regarding independent contractor status for transportation network drivers and delivery network drivers/couriers in the gig economy. The initiative is titled the “Protect App-Based Drivers and Services Act” and would allow individuals who are drivers or couriers to continue working as independent contractors while also providing some significant benefits. These benefits include an earnings guarantee of 120% of the state or local minimum wage for all time spent actually completing the trip or delivery, mileage reimbursement, healthcare subsidy, occupational accident insurance to cover medical and lost income suffered for injuries incurred while the driver or courier is completing the trip or delivery, sexual harassment prevention policies, anti-discrimination policies, mandatory criminal background checks of drivers/couriers, zero tolerance for any driver/courier suspected to be under the influence of alcohol, and safety training.
The proposed benefits seek to address many of the concerns proponents of AB 5 raised regarding the gig economy during the legislative debate last. As a refresher, AB 5 is the bill passed this year that will go into effect January 1, 2020 and codifies the “ABC” test for determining employee versus independent contractor status. The ABC test makes it more difficult to classify anyone as an independent contractor, including drivers and couriers in the gig economy.
The sponsors and proponents of AB 5 were labor unions, who prefer to have as many individuals classified as workers. Shortly after the initiative was filed, labor unions and the author of AB 5, Assemblymember Gonzalez, voiced their strong opposition to the initiative, arguing it will take away benefits the drivers/couriers could otherwise receive as employees. This argument assumes however, that the number of drivers and couriers that currently participate in the gig economy as independent contractors would automatically be offered jobs and become employees of the gig economy companies. Probably not. Moreover, their argument fails to recognize that one of the main reasons individuals who work as independent contractors choose this classification is they are in control of when to work, how long to work, and for whom to work. No such comparable flexibility exists for employees.
The Protect App-Based Drivers and Services Act is awaiting title and summary from the Attorney General and then will need to collect the requisite number of signatures in order to secure a place on the November 2020 ballot. Given the significant financial support behind this initiative, approximately $90 million, it is likely to satisfy the signature hurdle and become qualified for voters to ultimately decide this issue.