Ali Damabi is a single dad of two teenage girls living in San Jose. He drives for Uber 10 hours a day, five days a week and makes roughly $120 a day, but it’s not enough, he says.
“I don’t have a choice… there are no jobs,” Damabi says. Often he comes up short for his rent and other expenses at the end of the month.
Damabi’s story is common among Bay Area rideshare drivers, who say Proposition 22—a voter initiative sponsored by Lyft, Uber, DoorDash and other gig work startups—in November did not make things better, despite promises of change.
Now the legislation is having ripple effects across California as the companies behind the law eye other states and countries for similar measures and investors see its potential to grow to other industries.
Prop. 22 was born in response to AB 5, a bill authored by California Assemblywoman Lorena Gonzalez (D-San Diego) that says workers must be classified as employees if their work falls within a company’s usual course of business.
The legislation cut at the heart of the business models that had catapulted Uber and Lyft from scrappy Silicon Valley startups to household names worth billions of dollars. Both firms have floated self-driving cars as their future, but for now minimally-paid contractors remain the drivers of their business—literally and figuratively.
But Rufus Jeffris, senior vice president of communications at regional economic think-tank Bay Area Council, says rideshare companies had little choice but to craft an initiative to negate the effects of AB 5, which was opposed by people in many industries.
“It was a direct shot at California’s innovation economy,” Jeffris says. “It was clearly directed at companies that have worked to try and provide platforms for independent contractors to make a living and to run their own businesses.”
AB 5 was broad, affecting workers in just about every industry, including art, media and logistics—anyone paid on the basis of each completed job, and not considered an official employee. Prop. 22, however, focused on rideshare drivers.
“[AB 5] cast this blanket net over a wide range of independent contractors and didn’t respect and didn’t recognize that many of them have different motivations, different needs, different reasons for operating as independent contractors,” Jeffris says.
Promises Made
The companies behind Prop. 22 put out a wide-ranging and aggressive campaign, together contributing more than $200 million—the most expensive in California’s history. Consumers were sent messages on the apps urging them to vote yes on Prop. 22. Drivers were told to vote for the initiative and polls show roughly 70 percent were in favor of Prop. 22.
Damabi himself voted yes.
“I vote because Uber said everything is going to be okay,” he said. “But nothing changed.”
The initiative promised 1.2 times the state’s minimum wage, and health insurance to workers who drive at least 15 hours a week.
But the proposition’s fine print showed that these benefits are divvied out based on the amount of time that drivers are “engaged,” or actively picking up or dropping off passengers and making deliveries.
That means workers like Damabi, who works 10 hours a day, or 50 hours a week, may only have half that time counted toward qualifying for those benefits.
Ken Jacobs, UC Berkeley Labor Center chair, says confusion is by design. “Many of them thought they were voting to increase gig workers’ pay,” he says. “The $200 million allowed the companies to confuse the issue.”
Damabi says his pay diminished during the coronavirus pandemic, partly because of the reduction in the number of rides and passengers. Uber also takes a 30 percent slice of every fare, he says.
“I have to pay child support, … car payments, insurance, rent,” he explains. “I’m really scared for the future.”
Gig Workers Rising, a California rideshare advocacy group that spent months organizing against Prop. 22 says the lack of employee status harmed drivers during the deadly coronavirus surge this winter.
“In the midst of a devastating pandemic, (the companies’) majority Black, brown and immigrant workers had to choose between working and risking their lives or being unable to afford rent,” the group said in a statement. “Workers are denied quality PPE, sanitation equipment and payment for the additional labor they take on to make sure that they, their families and customers are safe.”
Damabi echoes those concerns. “We don’t have any vacation, we don’t have any health insurance, 401k, nothing,” he says.
Driver Drop-off
Meanwhile, driver jobs at other companies have disappeared following Prop. 22’s passage. At Kroger’s and Albertson’s grocery stores in Southern California, management laid off delivery drivers and outsourced deliveries to DoorDash and other gig companies.
“We are seeing some of the fallout that was anticipated,” Jacobs says. “We are seeing the companies trying to push this same model in other states.”
After Prop. 22’s passage, Uber CEO Dara Khosrowshahi said success in California offered a roadmap for enacting similar legislation elsewhere. Uber and Lyft executives this week were reportedly studying enacting a similar model in Europe.
California Assemblyman Ash Kalra (D-San Jose), who vocally opposed Prop. 22, says Uber and Lyft’s wealth allowed them to carve out special rules for their companies. He’s troubled by the proposition’s stipulation that an amendment to the rules can come only from a seven-eighths vote from the legislature.
“Basically, what they’re saying is we don’t want to be regulated, we don’t want any government oversight,” Kalra says. “They’ve made California one of their colonies… they can extract resources from us without having to follow the same rules as other responsible businesses.”
But not everyone is disappointed by Prop. 22’s passage.
Shawn Carolan, a partner at early Uber investor Menlo Ventures, penned an opinion piece in The Information arguing the initiative benefits both workers and startups.
“We are now telling people they can have flexible jobs without sacrificing benefits,” Carolan wrote, referencing the minimum wage and health insurance promises. “At a time when some of us have lost jobs and need short-term employment… the appeal of a flexible job with the security provided by benefits is easy to understand.”
Carolan says Prop. 22 opens the door to new business models.
“The existence of flexible work arrangements in fields like nursing, executive assistance, tutoring, programming, restaurant work and design suggests that a Prop. 22-inspired approach could make sense there as well,” he wrote in the article.
Despite his disappointment with how little changed with Prop. 22 passed, Damabi said if he had a chance to vote for it again, he would.
“Thank God we’ve got Uber for the drivers and can still pay rent, insurance, car payments,” he says. But he still feels he’d be better off as an employee.
“A lot of drivers aren’t happy,” Damabi says. “For now, it’s so hard for us.”
you progs are so clueless
stop using uber, uber eats, all the gig crap, you are destroying your future
get yo acce to the store, take a cab, make your own dinner
you are self-selecting into consumption serfdom
make some effort to take care of yourself or these people will insert themselves into every minute of your life and every transaction
Mr. Damabi needs to do something else.
Something that people are willing to pay for.
Driving around in your car all day is too easy. Anybody can do it. If legislation transforms driving around all day into a lucrative career then what incentive will lazy ass people have to pursue worthwhile careers?
“I don’t drive an evil automobile and contribute to traffic. I take Uber and have things delivered.”
Now with “analytics” and “monetization” … YOU ARE THE PRODUCT. (Your life, included)
More clever and forthright “progressives” might want a state or someday, federal benefits system, a.k.a. Social (and Health) Security on Steroids (or growth hormone). That’s portable benefits, as well as a portable pension or Social Security “insurance” payment boost from more taxes paid.
And it supports that Consumption (which is like a drug to people, including those promoting it).
One thing the story left out is that AB5 simply codified a state supreme court decision. It was already state law, but the legislature essentially ratified it. All that consensus was overturned by manipulated masses to benefit billionaires. Prop 22 is a stepping stone toward the end of representative democracy.
Typical Liberal Dem government – huge promises, large sweeping changes…Propositions created and passed, but without any positive or meaningful changes.
This is the Liberal Dem playbook – promise the world, compassion, equality, free this and free that…then can’t possibly deliver. Then ask for “four more years!”
I am wrong, or are these two statements at odds:
“The initiative promised 1.2 times the state’s minimum wage, and health insurance to workers who drive at least 15 hours a week. . . That means workers like Damabi, who works 10 hours a day, or 50 hours a week, may only have half that time counted toward qualifying for those benefits.”
Ummm, half of 50hrs/wk is 25hrs/wk and more than the 15hrs/wk threshold for the benefits, so why is not Damabi getting the benefits. Something is stated wrong or someone is lying. Maybe someone is just trying to sell media “news” or get attention for a pet advocacy position.
It is too bad that good news does not sell and humans seem to love stirring up conflict, pain and suffering.
The good news is that March has 23 (Mon-Fri). $120 a day multiplied by 23 days is $2,760 for March. I know places like Home Depot, Lowe’s and Target are hiring.
Not every job can be a career. Not every job can be a person’s sole source of income. There are real jobs out there for those with skills. Make a plan for your life to make sure you have marketable skills. Keep on top of your industry to make sure your skills are up to date. I am a high school graduate. I have no four year college degree (and therefore no school loan debt), and I am able to support myself in the Bay Area and own a home. I’m not a genius. My family isn’t rich. I’ve not been afforded any special opportunities. I found a sector I wanted to work in and started at the bottom and worked hard. I have never been out of work in 30 years. People have to be more responsible for their own choices in life.
It was fine at the base level of expectations. Low pay, beginner level skills and a license. I remember when they were nothing more than an illegal taxi company. Made too much money and became yellow cab without a meter.
> California Assemblyman Ash Kalra (D-San Jose), who
> vocally opposed Prop. 22, says Uber and Lyft’s wealth
> allowed them to carve out special rules
Let’s remember that Uber produces billions of dollars of negative profits every year (ie, big losses). The only reason they have such ‘wealth’ is because they are backed by Saudi Arabian investors. A big investor is SoftBank’s Vision Fund, which is partly owned by Saudis. Here they are talking about moving their HQ to Abu Dhabi.
https://www.cnbc.com/2020/11/10/softbank-vision-fund-move-from-london-to-abu-dhabi.html
So, you want the government to leverage your low-skill job (on the backs of taxpayers)? These jobs are not intended to be careers. If you want a higher-paying career, then continue with the gig, but go to school on the side. Study hard, work hard and have some perseverance. If you believe “we the people” should support all of your potentially poor decisions then you’re living in a dream world.
You guys seems to NOT Understand. People like gig jobs because they don’t have to worry about bosses and they can work anytime without the fear of being fired. Telling them to go walmart and target won’t HELP them. I left walmart to do doordash because of the flex flexibility and NO BOSSES. Iam having a good time and making good money. So ya if prop 22 comes to my area I would love it. I vote yes.
Otaku King you said it all.
I hereby christen thee “The Horse’s Mouth”
Ms. Herrera, the Bay Area Council is not just a “regional economic think-tank.” It is akin to a chamber of commerce for regionally located for-profit mega-corporations primarily. As such, it has an inherent interest in minimizing labor compensation (wages, salaries, benefits), minimizing taxation and minimizing regulations. The Council therefore advocates, lobbies and propagandizes in support of policies that, at base, are inimical, harmful and, at times, injurious or lethal to working people, to the social safety net and to the physical environment (https://www.bayareacouncil.org/about-us/; https://www.bayareacouncil.org/member-companies/).
Technological innovation in the context of profit-maximizing businesses has always been about displacing, de-skilling and/or cheapening labor (https://en.wikipedia.org/wiki/Technological_ unemployment; https://en.wikipedia.org/wiki/Deskilling). So when financier Mr. Carolan suggests that Proposition 22 will generate “new business models” in fields like nursing, executive assistance, tutoring, programming, restaurant work and design, you can be sure that such “models” will result in greater employment precariousness and instability, declining worker incomes and workers increasingly competing against each other in a race to the bottom. All of it is designed to, and focused primarily on, expand profits for those who don’t do the direct work (https://www.sanjoseinside.com/news/santa-clara-co-to-probe-covid-related-workplace-safety/#comment-1692359).
The obvious remedy is to build greater solidarity among gig workers and workers in general, to re-double union organizing efforts and to challenge the neo-liberal business narratives propagated by the likes of the Bay Area Council and their political shills in government (https://gigworkersrising.org/; https://www.siliconvalleydebug.org/about; https://calaborfed.org/union-organizing/how_to_form_a_union_where_you_work/).