Prop 22 Gets A Yes, So What’s the Plan?
California voters want their Ubers. The YES to Prop 22 won by 58% which means the people sided with Uber and Lyft declaring the company drivers are indeed independent contractors.
Now the question is, what does that look like for the TNCs and what does this all mean to chauffeured transportation?
There’s a lot to unpack here. If the TNC drivers are forced to play by the California rules for Independent Contractors, drivers will be met with a new reality.
First, they are now officially business owners who must have a tax registration certificate with a tax ID number. As independent contractors, drivers will also be responsible for self-employment taxes. Depending on the county, they may need a business license and an operating permit. Also, they will be on their own to pay for all the costs of doing business including airport fees, which can be as high as $5 per ride, their vehicles, fuel, maintenance, their phone (or other operating systems), garage fees if any, tolls and parking. Traditionally, independent contractors in California have the rights to decide when and where they work, set their own fees and have multiple clients. We know drivers are using a multitude of platforms that deliver trips but a very good question here is, will Uber and Lyft drivers exercise their right to set their own fees now that they are truly independent contractors? It could get very interesting.
However, despite having greater autonomy, independent contractors don’t enjoy the same rights under California law as employees. They can be fired far more easily and aren’t entitled to overtime pay or even the minimum wage. They may be required to work long, unbroken hours without extra compensation. They are ineligible for unemployment insurance and they are not protected from federal and state antidiscrimination laws. Other benefits like retirement and health benefits, FICA tax payments and Workers’ Compensation insurance are the sole responsibility of the contractor.
How is the GCLA dealing with this ruling? Cautiously. Prop 22 was backed by the DNC, and many close allies to the GCLA in our state Capital and government. We must take care to meet with them to better understand how to communicate with you. Action steps are in the works.
In close, this week we determined that a live meeting with all of our constituents is a must. We have committed to offering a 1-day State-of-the-Industry program on Tuesday, December 15. Due to Covid19 restrictions we will host this meeting in Orange County to be able to hold the event inside. Mark your calendars and reserve that date. Details will be released early next week.
Sara Eastwood Richardson
