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Uber, Lyft and DoorDash Launch $90 Million Campaign to Exempt Themselves from CA AB5

On October 29, Uber, Lyft and DoorDash launched a $90 million campaign in an effort to exempt themselves from California’s tougher measures on the gig economy.  The campaign, Protect App-Based Drivers & Services campaign, seeks to put a referendum on 2020 ballots in California. It will ask voters to exempt ride-hailing companies from AB 5, a landmark California law passed in September and effective in January 2020 that codifies and clarifies the Dynamex standard (Dynamex Operations West, Inc. v. Superior Court of Los Angeles County et al. B249546) of the definition of employee.  This law will require companies to hire workers as employees, not independent contractors, with a few exceptions. This will give California gig workers, including Uber, Lyft and DoorDash drivers basic labor rights and benefits for the first time.

In an attempt to avoid the classification of their drivers as employees, Uber, Lyft and DoorDash created the campaign to have voters decide to exempt these companies from this new reform to labor law.

At a press conference in Sacramento, the companies revealed the details of their $90 million campaign to fight AB 5. The ballot measure could make it onto the November 2020 ballot if enough signatures are obtained.

The ballot measure would create new benefits for drivers. The companies promised drivers would make at least 20 percent more than minimum wage with no caps on what drivers can earn, as well as 30 cents per mile to cover gas and vehicle wear and tear. Drivers would also receive a healthcare stipend, occupational accident insurance, as well as automobile accident and liability insurance. These benefits are more than drivers get now, but less than they would get as employees.

Drivers opposed to AB5 and in support of the new measure want to keep their flexibility as independent contractors and prefer the new benefits.

“Driving allows me to put my education first,” Jermaine Brown, a driver and college student, said at the Sacramento press conference. “Not only do drivers get to keep our flexible schedules, but we also get new benefits like healthcare and more earnings potential. I’m a stay at home dad. I do things with my kids during the day and drive in the evening. Being able to have that flexibility and being able to drive how I want to drive really helps me and my family.”

The We Drive Progress Coalition, a group of grassroots organizations that represent app-based drivers, including 20,000 ride-hail drivers in California, oppose the new referendum.  Ride-hail drivers have unsuccessfully fought in the past for the right to unionize and for better pay.

“After working 80 hour weeks, sleeping in our cars and surviving on poverty wages, drivers organized and won support for AB5 from both the public and lawmakers,” Edan Alva, Lyft driver and member of the Coalition, wrote in a statement. “Now, instead of obeying the law, Uber, Lyft, and Doordash want to spend $90 million to avoid accountability— all while claiming it will ‘protect’ drivers.”

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