We are listening to our audience to cover the issues that matter most to you this election season. This story is one example, and please share your own questions here.
We recently got a question from a listener about California’s Proposition 22. That’s the proposition that would allow app-based transportation companies to treat their workers as independent contractors, not employees. This applies to Uber and Lyft, as well as delivery companies like DoorDash.
They asked: “What percent of Lyft and Uber drivers qualify to be employees under current law?”
The short answer is: all of them. Here's why.
Prop 22 is on the ballot to override the current law, Assembly Bill 5. AB 5 says that a worker is an employee by law, unless the hiring business can prove they are a contractor. And a worker is only defined as a contractor once they meet all three criteria of AB 5’s Test:
One: they have to be able to perform their work without the company controlling them.
Two: they have to be an independent practitioner of the trade they’re being hired to do.
And here’s the most important one: an independent contractor must be performing their work outside of the hiring entity’s usual business.
The phrase “usual business” is key here. Uber has been arguing that their workers do perform work outside of their usual business. The company claims that its usual business is not transportation. Tony West, Uber’s Chief Legal Officer, claimed that it’s a technology platform for different types of digital marketplaces.
The verdict is still out on if that argument will hold. In September, Governor Newsom signed a bill exempting dozens more workers from AB 5’s independent contractor laws. And Uber and Lyft drivers were not exempted.
So to answer the question: under the current law, all Lyft and Uber drivers do qualify as employees. But this could change if Prop 22 passes.
