There was a big win this week for Uber and Lyft, as a state appeals court has upheld the Prop. 22 law exempting rideshare companies from minimum wage and overtime rules, but this thing’s expected to go to the state Supreme Court.
One California state law controversy during the 2020 Trump vs. Biden election season was the state’s Prop. 22 app-based driver law, which voters approved, and thereby exempted rideshare companies like Uber and Lyft from having to treat drivers as employees or provide minimum wage or overtime. Prop 22 essentially poked one single but very large hole in a then-recently passed state law called AB5 that required such protections, and the one exemption applied only to rideshare apps and the drivers who drove for them.
Nine months after Prop. 22 passed, it was overturned by an SF Superior Court judge in August 2021. So cue the inevitable: Uber and Lyft appealed it, and the Los Angeles Times reports they won that appeal, when the state Appeals court upheld Prop. 22. But cue the inevitable again, as the Service Employees International Union (SEIU) insists they will appeal to the California Supreme Court.
There was one bright side for the unions and drivers, as the appeals court ruled that drivers could join unions and collectively bargain. But according to the New York Times, the appeals court ruling declared that Prop. 22’s unionization limitations should be removed, but otherwise to “allow the rest of Proposition 22 to remain in effect, as voters indicated they wished.”
As CNBC explains, the appeals court upheld the Prop. 22 decision that “exempted Uber and similar companies from following certain minimum wage, overtime, or workers compensation laws for hundreds of thousands of Californian rideshare drivers.” While that vote did allow drivers healthcare “subsidies” based on “engaged” driving time (only those hours where they have an active gig), it still kept minimum wage and overtime protections off the list of driver benefits.
Opponents were furious. "Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state’s labor laws and undermine our state constitution," California Labor Federation executive secretary (and author of AB5 when she was in the Assembly) Lorena Gonzalez Fletcher told the Associated Press. "Our system is broken. It would be an understatement to say we are disappointed by this decision."
Again, this is almost certainly headed to the state Supreme Court, as one of the three judges on the appeals panel wrote that “I believe we must invalidate Proposition 22 in its entirety.” And AB5 itself is also getting legal challenges too, so it is nowhere near resolved how app-based drivers will be treated in California, the birthplace of most of the apps they use.
Image: LOS ANGELES, CALIFORNIA - APRIL 16: A driver wears a face mask and gloves as Uber and Lyft drivers with Rideshare Drivers United and the Transport Workers Union of America conduct a ‘caravan protest’ outside the California Labor Commissioner’s office amidst the coronavirus pandemic on April 16, 2020 in Los Angeles, California. The drivers called for California to enforce the AB 5 law so that they may qualify for unemployment insurance as the spread of COVID-19 continues. Drivers also called for receiving back wages they say they are owed. (Photo by Mario Tama/Getty Images)