Uber, Lyft, Instacart, Doordash and Postmates have poured $181 million — so far — into bankrolling Proposition 22, which they created.
They’re not doing it to help you. They’re not doing it to help their workers.
They’re doing it to preserve a status quo that’s exceedingly lucrative for company higher-ups and shareholders — at the expense of you and those workers.
The gaudy valuations and healthy stock prices for these companies are derived from business models that, intentionally, break the law — and the companies’ longstanding and explicit decision to misclassify employees as “independent contractors,” denying them benefits such as healthcare and a guaranteed hourly wage.
When rogue companies decide the law doesn’t apply to them — and are coddled by an indulgent government — then the burden falls on every company, small and large, that follows the rules, pays its workers a living wage, pays employment taxes, abides by employer mandates, and offers its workers healthcare.
In San Francisco, of all places, this should be self-evident. Put-upon restaurants feel compelled to contract with delivery services that scoop up 30 percent commissions while stiffing their actual workers; Airbnb and its ilk skirted paying hotel taxes for years while cannibalizing affordable housing; and Uber and Lyft made a mockery of this city’s environmentally motivated transit plans — and eviscerated public transit — by flooding the streets with scores of thousands of cars.
They moved fast, they broke things. They asked forgiveness instead of permission. And they kept their money: If Uber and Lyft alone had categorized their workers as employees — which, legally, they should do and should always have been doing — they would have contributed an estimated $413 million to California’s Unemployment Insurance Fund between 2014 and 2019.
Enter Proposition 22, which they designed to allow them to keep their money in perpetuity.
And we do mean in perpetuity: If voters pass Prop. 22 in November, it will require a seven-eighths majority of both the State Senate and Assembly to amend it — or, in fact, pass any law pertaining to “app-based drivers.”
So that’s in perpetuity. You couldn’t get seven-eighths of our legislators to agree that seven-eighths of eight is seven (even before lobbying from Uber, Lyft et al.).
If you bother to read the text of Prop. 22, you’ll find plenty of disturbing things within. But, even if you don’t, the notion of massive companies writing their own regulations and using their vast wealth to sell them to voters is objectionable on its face.
It may come as a shock that, this week, the Chronicle endorsed Prop. 22.
But it’s not a surprise.
At this point, it’s incumbent to stress that the Chronicle reporters and editors and photographers covering fires, plagues, homelessness, and other issues, good and bad, embroiling our city and state have nothing to do with the stances and endorsements adopted by their newspaper’s editorial board.
There’s a lot of invective directed their way by media illiterates who don’t understand this. So, it’s important to point that out. It’d be great if it didn’t have to be pointed out so often.
The Chronicle, for whatever reason, seems to direct its editorial writers to channel the voice of Mr. Hand, the crusty teacher in Fast Times at Ridgemont High. This can grow tedious. And it would be tedious to unpack, point by point, the paper’s arguments in favor of allowing Uber, Lyft, et al. to exempt themselves from state law and write their own regulations — an argument the paper begins with the ludicrous statement that Prop. 22 “makes an attempt at striking [a] balance.”
So we will hasten.
The editorial mentions that Prop. 22 “does guarantee some benefits” for drivers, such as “120% of minimum wage and health-care subsidies.” It does not mention that workers are only paid for “engaged time,” that is, time spent driving passengers — not idling or sanitizing a car between rides. When you factor that in, Prop. 22 only guarantees drivers an estimated $5.64 an hour.
There are many goodies like this scattered throughout Prop. 22. The 25 hours drivers need to work in order to qualify for a healthcare subsidy equivalent to 100 percent of premium expenses? You guessed it: 25 engaged hours. And the “100 percent” reimbursement is, deeper in the text, redefined to mean 82 percent of an average Covered California premium.
Well, that’s a neat trick. And this stands to be enshrined into law and protected by a nigh-invulnerable seven-eighths threshold.
But, apparently, Prop. 22’s creators had no other choice. The Chronicle describes these app-based tech giants as “outcasts in Sacramento” that “never quite had a fair chance in the Legislature.”
That’s spectacular. Never mind the vast — and highly conventional — lobbying apparatus deployed by these companies. Never mind the incredible leeway granted to them despite years of overt rule-breaking. Never mind that these “outcasts” have, for the better part of a decade, essentially crafted their own regulation and enforcement mechanisms. Never mind that if Gov. Gavin Newsom — something of a Sacramento insider — carried any more water for them he’d begin to resemble a highly photogenic aqueduct.
These are bad arguments deriving from bad facts. So what’s going on here?
It seems like ages ago, but only last year vape giant Juul attempted to circumvent this city’s ban on its product by pouring tens of millions of dollars into writing its own regulations.
And the Chronicle called them out on it. It decried the efforts of a “dominant brand” to “dictate the terms of how it should be regulated.”
“That alone should be a nonstarter for voters,” the editorial states. Hmm.
But wait! There’s more!
The Chronicle also chided Juul for crafting a ballot measure that, even with a future supermajority in tow, would be impossible “to amend … in ways that could advance its stated intent.” And here’s the money paragraph:
A vote for Prop. C requires not only trust in Juul’s motivation and ethics but also faith in its ability to anticipate future attempts to circumvent the law by competitors or customers.
You could sub in the terms “Prop. 22” and “Uber” and essentially say the same thing. What changed?
Well, the Chronicle does not deploy a vast fleet of vape pens. But it does employ many a delivery driver. And perhaps it’s as simple as that.
Once again, the endorsements and stances adopted by the Chronicle’s editorial board do not necessarily trickle downstream into the paper’s coverage of City Hall or the school district or the Giants. That’s simplistic (though, yes, management’s decision to allow Willie Brown to have a column is indefensible and always has been).
But if you think the official voice of the Chronicle, a large and well-established city business, is at times indistinguishable from the Chamber of Commerce — an agglomeration of large and well-established city businesses — you’d be right.
Going back to 2018, the Chronicle and the Chamber have agreed on 77 percent of state and local ballot measures. The paper’s endorsements regularly align with the pro-development, low-tax, limited-regulation principles that define San Francisco’s Democratic establishment (or would, in a place where Republicans existed in numbers, define what used to be known as a moderate Republican).
And that’s okay. But, as noted above, the argumentation has been disingenuous. And the same goes with candidate endorsements.
It’s harder to align the Chron and the Chamber on those — the Chamber does not overtly endorse candidates but does put money their way via a virtual matryoshka of independent committees. But it’s hard to imagine a serious divergence.
Since 2015, in contested races, the Chron has endorsed Scott Wiener for state senate; London Breed for mayor; Suzy Loftus for DA; and for supervisor: Julie Christensen, Marjan Philhour, Joel Engardio, Josh Arce, Ahsha Safai, Rafael Mandelman, Nick Josefowitz, Jessica Ho, Christine Johnson, Shamann Walton, and Vallie Brown.
- On Sept. 22, 2018 the paper tapped Ho for District 4 supe. It touted her “City Hall experience” despite the fact she’d only worked there since April and only registered to vote in San Francisco in March.
- Well, that was odd. It was also odd because, only one week earlier, the paper endorsed Josefowitz over District 2 Supervisor Catherine Stefani, a veteran government hand, stating that what “City Hall really needs is a constructive disrupter.”
Well, what’ll it be? In this case, none of the above: The voters did not grant the Chronicle its wishes with either of those endorsements. In contested contests since 2015 it’s only batting .357 — Ted Williams-like on the ballfield, but not as great in newsprint.
The purpose of making endorsements isn’t to win — or the Chron would surely endorse differently. The newspaper is entitled to espouse the worldview of its choosing, and those who don’t agree are equally entitled to listen, not listen, or start up their own damn paper.
But the arguments the Chronicle makes to buttress its worldview are, indeed, highly questionable.
As is that worldview, come to think of it.
It’s a shame when a newspaper chooses to obscure the fine work of its staff and squander the fading sway it holds over a profoundly corrupt city.
It’s even more of a shame when, considering the editorial stands that paper takes, we’re left to wonder if that diminished influence is entirely a bad thing.
If you read us often, please support our reporting. We depend on you.
With the stroke of a pen, the very poorly designed AB5 legislation destroyed a two-front livelihood (freelance musician and editor/proofreader) that I had carefully built up over 25 years. I know many other musicians and writers whose incomes have been similarly decimated.
Not everyone wants to be an employee, or to belong to a union. I respect any worker’s right to join a union, if that’s his/her/their choice. But I believe it is immoral to try to force others into the same mold if that’s not what they want. No one should have the right to strip others of the ability to choose to work in the way that best suits their own life, personality, health condition, or family structure just because that choice is different from yours, or your union leadership’s.
I wanted to be an independent contractor, and I still want that. I made an informed and adult choice to trade certain benefits of full-time employment for the freedom and independence being an IC gave me. I chose my hours. I chose my contracts. I worked where and when I wanted. I took financial responsibility for my own health care, my own work space, my own equipment, my own continuing education/skill-building, my own insurance, and my own retirement planning. I didn’t take contracts that didn’t pay me appropriately for my time or skills. For me, and many others like me, AB5 didn’t “help” us in any way. It didn’t magically turn our contracts into full-time jobs. It just moved our jobs out of state and gave us the opportunity to claw and bite one another in the futile search for nonexistent full-time jobs that would pay even a fraction of what we had been steadily earning for decades.
If you don’t want to work for Uber or Lyft, don’t. If you don’t want to support their business model, don’t use these apps. There’s no reason to hurt hundreds of thousands of people and businesses who don’t even work in your industry.
AB5 threatens to put me out of a job and wreck my life. Please vote yes on Prop 22. I am able to pay my bills and put food on the table because of a contract driving job. I use and maintain my own vehicle and choose my own schedule. I am NOT an employee. If I felt I was being exploited, I would try to find another sort of livelihood. Our economy is on the brink of collapse from COVID 19 lockdowns. Joe, why do you want to take away my paycheck? Everyone, please ignore this one-sided article, vote to pass 22 and let me continue earning a living. Thanks!
AS you point out this prop (and so many others) are written to aid its authors. While the general idea may be acceptable, due to the bias of the authors, there are bits in the small print that should never be there. And due to the nature of most props; impossible to remove once installed.
My default position on all props is a NO, unless convinced otherwise that it is fair, just, and needed.
This article is a lot of the writers opinion using facts and comments to advantage the writers point of view. I don’t see any comments from people that support prop 22. Its just a one sided article. I’m a delivery driver and I support Prop 22 and so do more than 75% of app based drivers. Get the true facts.
The mission has much better transit options than other parts of the city, and is much flatter. Before Uber and Lyft, it was impossible to get a cab in much of SF, and Muni is very slow and intermittent. I really hope Uber and Lyft survive, these hills are hard for a lot of folks, and not all neighborhoods are fully walkable for many services.
The real problem is the binding together of job and healthcare.
I have a question for you about “engaged time”. You define engaged time as “time spent driving passengers — not heading to pick one up or idling or sanitizing a car between rides.” In the actual document of Prop 22 that you linked, engaged time is defined as “… the time from the moment the driver accepts a passenger or delivery on the app, to include time driving to pick up the passenger or the food or item, through the time the driver delivers the passenger or the delivery to its destination point.” Pg. 15, Comment 40
The Prop 22 document addresses “engaged miles” in a similar fashion on pg. 15 as well.
As a former full-time gig worker I was shocked at your initial definition of “engaged time” and similarly outraged. That narrow definition absolutely would be in favor of the app companies. However, I feel that it makes a significant difference to count the time and mileage on the way to a passenger/delivery as opposed to just the time post pickup.
For example, I wouldn’t believe I could qualify for the healthcare subsidy in a reasonable amount of time (let’s call it 40 hours a week for the sake of argument) if “engaged time” worked in the way you’ve defined it. But in the definition of prop 22, it seems feasible in my experience to accumulate 25 hours of “engaged time” in a 40ish hour work week. 62.5% of my time either with a pax/delivery, or on the way to get one, doesn’t seem outlandish. If I average 15 “engaged hours” a week on two different apps for the quarter, each company pays me a 50% subsidy at the end of the quarter. Again, seems do-able to me.
Just wondering if that changes your assessment of the situation at all?
I’m apparently in error about “the time spent driving to pick one up,” so I will correct that. Thanks for alerting me. But I don’t think this changes the equation much at all — you did see the part about Prop. 22 only guaranteeing $5.64 an hour.
Only counting “engaged time” for compensation or toward a health premium means a driver will, realistically, have to be in the car another 15 or so hours for every 25 hours. You’re not getting paid for that time — hence the “guaranteed” $5.64 an hour — or earning toward the health subsidy (which is, as noted in the story, not really 100 percent).
And, what’s more, Prop. 22 will compensate your mileage at a rate significantly less than the Federal rate.
So, when you parse the details, they’re not good. But you really don’t need to parse the details when wealthy companies attempt to exempt themselves from the law by spending untold sums of money. Period.
Well I haven’t admittedly done a ton of research on this situation, so this is just my gut reaction. But, what I as a gig worker would do in regards to the healthcare subsidy, and what I imagine savvy workers will do with “engaged time” in general, would be to shoot for an average of 15 hours engaged time a week on two apps for the quarter, then each company I believe would pay me a 50% subsidy as prop 22 specifically says the number of these subsidies per worker cannot be limited (comment 15, pg 6), ergo I could switch apps often and stay “engaged” much more than utilizing a single app. You may be entirely correct that this healthcare subsidy will provide inadequate compensation, that I do not know.
This strategy in general ensures that I am experiencing more “engaged time”, making the 120% earnings guarantee pay me out more often per hour, if necessary, and making more of my mileage “engaged mileage”. If a worker doesn’t utilize the ability to accept assignments from multiple apps, I agree with your assessment of the situation that those 15 hours in my original scenario are unpaid time, but that is not the typical gig worker in my experience.
And finally, I’m not accountant, but I can’t find any language showing that drivers cannot both receive the per mile vehicle costs subsidy from a company and also account for depreciation via their federal tax return. Assuming I can still claim depreciation on my personal tax return, this wouldn’t bother me so much as a gig worker, but that’s just my personal opinion on the issue, for some people this may be beyond the pale.
Thanks for taking the time to answer me, I appreciate you letting me share my perspective.
What did we ever do to deserve Joe ????
Part-time Uber driver here. The app and its owners are definitely corrupt. It’s mind boggling how much Uber/Lyft have gotten away with over the years, And the ineffectual Governor who feigned to be neutral while AB5 was being considered made matters worse and left me with little confidence for the future of this state. Like for real, wouldn’t prop 22 set a precedent for other companies to follow suit with copycat regulations, as well? Why the hell would we want that in a just society? All I can do now is hope that Californian voters are astute enough to read between the lines, but that might just be wishful thinking.
Thanks joe for being the
Dogged reporter you are.
That slimy willie has a column
In the chron – that tells you all
You need to know concerning
The whorishness of the editors.
You are too kind to the writers.
Heather knight & co. Could pen a
Column such as you wrote here…
But they won’t…what do you call
That, other than cowardice ??
JE, great article but it seems one-sided on the Prop 22 issue. There is no mention of the millions of dollars that staffing agencies stand to gain from it’s failure. Specifically through the massive demand these app based companies will have to hire up full time workers. It also fails to mention that tens of thousands of these gig workers will be cut out of the income they’ve enjoyed by being forced to work a regulated, tracked 8-hour shift or no work at all. It also fails to mention how so many other contracting gigs were left out of AB5 (musicians, traveler doctors, nurses, etc.). What’s the rationale there? It appears to me that AB5 was a poorly contrived act of political pandering to voter’s emotional, anti-corporate sides. The real problem here is that these gig workers live in a country without universal healthcare and are instead forced to attach health insurance to a job. If that was not the case, I doubt AB5 would ever exist. That’s where I wish our politicians would spend their time and energy. Thoughts?
AB5 was launched disastrously, on par with Obamacare’s website.
With that said, AB5 is a codification of the state Supreme Court’s ruling of what constitutes an employee, which itself was only the latest codification, going back decades, that ruled in this way.
Among the many industries that successfully petitioned for amendments or temporary exemptions was the newspaper industry. AB5 is flawed, but you can work with it. That won’t happen with Prop. 22, which, again, is narrowly tailored to benefit the entities that wrote and bankrolled it. Presenting AB5 and Prop. 22 as counterbalancing is misleading.
I’m still concerned with the long-term implications that AB5 imposes. Specifically, how it forces Uber and Lyft to become the equivalent of app-based taxi companies and will drastically reduce the number of drivers aka access to extra income for drivers like me who like to drive a few hours on weekends and evenings for extra cash. I’ll lose the flexibility I’ve enjoyed if we stick to AB5.
Like all things in life, there are pro’s and con’s to this calculus and I don’t see the other side being fairly considered in your article.
Thanks again for your engagement and granting a platform to share our thoughts!
fantastic piece.. any suggestions on trying to hold the editorial staff accountable for their corporate kowtowing?
Joe is just a terrible writer. He’s a slut for purple prose.
Joe, another excellent article. This is a great critique of 22 as well as the Chron editorial board’s disappointments.
I will quibble with your characterization of these companies as benefiting from a lucrative status quo. These companies are mainly in the business of selling hopes & dreams (and nine digit quarterly losses) to their investors. They’re total duds even with their abusive labor practices. Even while they pay starvation wages, offload all risk, and skip their payroll & health obligations, they still can’t manage to make money. It’s incredible.
The stock prices of the public ones say it all – Uber’s stock is trading 10% below its IPO price and Lyft’s 59%. Normally these things are supposed to “pop” 10-20% on IPO day, then follow the market. If you skipped the IPOs and bought a mix of tech stocks instead (eg VGT), you’d be 49% richer, not 10-60% poorer. Hell, Uber and Lyft can’t even beat the renowned investment known as “cash under my mattress”.
These are all excellent points. As noted the status-quo is lucrative for “company higher-ups.” As in: the folks authorizing these heavy expenditures on Prop. 22. Your point stands on shareholders — though, certainly, things could get worse for them.
The Chron not only holds sway over a “profoundly corrupt” city, but is itself interwoven into the profoundly corrupt fabric. Although I generally agree with what you write about the independence of the reporters from the worldview of the editorial board, I think that only goes so far. Have you read their coverage of the criminal organization PG&E over the past 10 (or is it 110) years? Their articles read like PG&E brochures. Every. Single. Time. And though that worldview does not in itself dictate coverage of a specific story, it certainly does weigh in on who gets hired, who gets promoted and who’s let go.
With both BART & Caltrain on the brink of bankruptcy, AC transit reducing service by 30+% and Muni apparently incapable of providing their “service”, the last thing the Bay Area needs is less transit options. But liberals seem hell bent on killing even more jobs and making it even harder to move arround. Imagine 2021: BART & Caltrains are now closed down, Muni still ain’t working right, and both Lyft and Uber said “Screw this, we’re DONE”. Think SF is gonna have a “recovery” then?? Dont bet on it. Play the long game, use your brain and vote “YES”.
Prop 22 will be a real test for SF. I hope we pass the test by defeating it. I think it won’t pass if turnout is high, which I think it might be. I think Prop 15 Is incredibly important to pass.
Unless expressly written to allow for legislative amendments, only another ballot measure can amend or repeal a law passed at the ballot box. That Prop 22 allows legislative amendments at all is notable, but the 7/8 threshold is challenging as you explain. Similarly, Prop 24 allows for legislative changes, though any future amendments must be “in furtherance of the law.” Both demonstrate the flaws of our form of direct democracy: ballot measures limit the ability of legislative bodies to adjust policies as times and needs change. Just look at Prop 13 and the decades of unintended consequences for education funding since its passage.
My take is that the Chronicle’s Ed Board endorsement is more of a rebuke of AB 5 and Assemblywoman Gonzalez than an effort to align with the Chamber of Commerce or do a favor for hometown companies. Sure, Prop 22 is about rideshare companies. But the “need” for the proposition arose from failed negotiations in Sacramento about how to correctly categorize workers. AB 5 effectively banned freelance journalism and photography in California and threatened to severely limit the distribution networks of big and small newspapers within the state. AB 5 was rife with ill-conceived carve-outs that arbitrarily picked which workers were winners or losers. The law was so flawed, in fact, it required extensive clean-up legislation this session.
This endorsement may weaken the paper’s influence or standing within the city as you suggest, but the choice seems to be more about the petty politics of Sacramento than maintaining status-quo in San Francisco.
Sir or madam —
To your well-argued point, Prop. 22 will not affect one freelance writer or photographer. It is narrowly tailored to benefit the folks who paid to create it. So, for the Chron to portray an either-or with AB-5 and Prop. 22 is, itself, misleading.
Excellent article, thank you. We have feet and we have Muni. We do not need these exploitative companies.
Tremendously selfish and short sighted. It can easily take 1.5 hours to get across the city in a filthy muni bus that has been abandoned to the homeless and mentally ill.
This whole thing is the epitome of selfishness. Uber and Lyft have wreaked havoc on our city streets in so many ways, over far too long now. Obviously the people who have grown to rely on Uber and Lyft got around just fine before they came about – even if things took longer. But we owe it to EVERYONE to develop smarter options that aren’t so bad in so many ways. This may take time, but it certainly doesn’t mean we must settle for these poor options that have plagued us.
“Well, the Chronicle does not deploy a vast fleet of vape pens. But it does employ many a delivery driver. And perhaps it’s as simple as that. ”
Last year, the Chronicle gave space (https://www.sfchronicle.com/opinion/openforum/article/Legislation-delivers-serious-threat-to-California-14407670.php) to the California News Publishers Association to argue that AB5 was a threat to newspapers. The then-Editor-in-Chief tweeted much the same argument. While recognizing the precarity of newsroom jobs in this era, I, politely as one can in 280 characters, asked whether the paper would be interviewing its own delivery drivers to ask them what they thought; seeing as the paper gave free space to management to present their arguments unfiltered, it seemed only fair to ask someone on the news side of the newsroom if labor would also get a word in edgewise too (especially given the inherent absurdity of declaring someone hired to deliver the same newspapers to the same addresses on a daily schedule to be “independent”). And that was how I joined the ranks of virtually every San Franciscan not employed by the Chronicle to be blocked on Twitter by Audrey Cooper.
Anyway, Cooper is gone (and last night left behind a wink and a nudge about playing Karl the Fog all these years—https://twitter.com/audreyhasnews/status/1306063538759368704), while the Chronicle’s editorial board and remaining old-guard columnists continue to tarnish the good work of its reporters who pull long days driving into wildfire zones and sitting through long city meetings.
Brilliant article, Joe. I can’t help but think of this Citations Needed podcast every time I read an SF Chronicle editorial board piece. It’s worth a listen.
In ‘Ep.16 — Editorial Boards: Protectors of Establishment Ideology’ we discuss the political and ideological utility of the 19th cen. artifact known as ‘the editorial board’
Just vote against whoever is spending money on a campaign. Chances are the money is dirty or laundered.