If there is doubt that California Atty. General Xavier Becerra and his supervisors were fed up with the constant harassment by Uber and Lyft from the state’s new performance workers law, he was eliminated by recent legal movement to force companies to comply.

In their June 24 filing, Becerra and Los Angeles, San Diego and San Francisco lawyers asked state judges in San Francisco to issue an initial court order ordering companies to immediately classify their drivers as employees rather than independent contractors.

That is required by the state performance workers’ law, known as AB 5. “It’s time for Uber and Lyft to acknowledge their responsibilities and the people who make them successful: their workers,” Becerra said on the day when the motion was filed .

It should not surprise anyone that Uber, Lyft and other gig economic companies see it differently and are preparing to fight – including a multi-million-dollar voting initiative campaign – where their survival might be at stake.

Appointed as an independent contractor, the driver is not protected by minimum wages and overtime rules, does not receive workers’ compensation or unemployment insurance benefits, and must pay for himself gas, insurance, vehicle maintenance, and Social Security taxes. They do not have the right to join or organize into trade unions.

Avoiding appointing employees as independent contractors is not new. He was born in the famous anti-labor Taft-Hartley amendment in 1947, which was the first to make an exception.

But it is common in an entrepreneurial economy where high initial costs encourage business owners to look for savings in a market where “work tax and other workplace obligations seem low hanging fruit, “As observed by Elizabeth J. Kennedy of Loyola University in Maryland.

Uber, Lyft, and other show economy companies have exploited weak American regulations to build a business that is addicted to forcing business costs onto the shoulders of important workers.

However, it is not clear that their exploitation of workers has resulted in a sustainable business model. Uber and Lyft admit in financial disclosures that they might never be profitable under the present circumstances and that things would be worse if they had to classify their drivers as employees. (Uber has lost $ 15.7 billion and Lyft $ 4.2 billion in the past three calendar years.)

Action Becerra – the latest chess movement in her lawsuit originally submitted May 22nd – is just one of several California branch of officials addressed to show entrepreneurs due to alleged misclassification of employees in recent weeks. San Francisco Dist. Atty Chesa Boudin suing DoorDash shipping service on June 16 to classify its sending workers as independent contractors.

One week earlier, the California Public Utilities Commission, which had carved out special regulations for “transportation network companies,” notified companies that as of January 1 their drivers “were considered an employee“And informs that the law requires that they provide drivers Workers’ compensation benefits starting July 1.

Becerra’s actions have been praised as past initiatives to protect workers’ rights.

“After eight years of searching for other ways, California officials finally enforced the rule of law against this so-called performance company,” Veena Dubal, a labor law expert at UC University’s Law School, told me. “Because regulators choose not to enforce existing labor laws against companies, they are allowed to grow precarious work – not only in this state, but throughout the world.”

This is not a one-sided battle. These companies are fighting Becerra’s lawsuits and, perhaps, more importantly, doing so put the size on the November ballot to flip AB 5.

Their size, which will emerge as Proposition 22, will effectively appoint application-based drivers such as those who work for Uber and Lyft permanently as independent contractors and forbid countries or regions to enforce regulations to treat them as employees.

The companies have provided campaign initiatives with coffins of $ 110 million so far – $ 30 million each from Uber, Lyft and DoorDash and $ 10 million each from Postmates and Instacart, two other shipping services. So it’s important for us to look more closely at its size.

Proposition 22 seeks to create a new workplace model – a hybrid of independent contractors and an employment model.

The companies said they would maintain “flexibility” to set the days and hours of work someone thinks they value by drivers who want to work around schools, care and other jobs, while guaranteeing minimum wages and access to health coverage.

The move will guarantee drivers income of at least 120% of the applicable minimum hourly wage, subsidies for health coverage and protection against arbitrary dismissal.

The companies claim that most of their drivers support the remaining independent contractors. But it was misleading because the driver fell into two separate camps. One consists of true part-time workers who record minimal hours, often leaving work completely after several months, and appreciate the flexibility they are proud of. The other is a full time driver who may spend 40 to 50 hours a week on the road.

About 70% to 80% of drivers can drive 20 hours a week or less, said Harry Campbell, a former driver for Uber and Lyft who now runs therideshareguy blogs, information services for drivers. Full time management, even though it is less, accounts for more than 50% of work hours through a corporate application.

“For most drivers, this is not full-time income, so it’s not surprising that they want to remain an independent contractor,” Campbell said. “But drivers who work 40 to 50 hours a week basically work like employees without any benefit or protection. They are at the forefront of efforts to make companies accountable for treating drivers like employees. “

And they are drivers who bear the burden of change posed by Proposition 22. However, Campbell says that when even part time becomes educated about what AB 5 will do for them and that the law will not prevent companies from giving them some of the flexibility they desire, “some of them changed their opinions about the law.”

There is no doubt that the main beneficiary of Proposition 22 is the company itself. If they are forced to classify their drivers as employees, according to the state’s nonpartisan Legislative Analyst’s Office, the higher costs generated will “reduce the long-term profitability of these companies, which can reduce the market value of the company’s shares and stock prices.”

The move will impose some new costs on the company, but those costs may be “small,” the Office of the Legislative Analyst considers.

Indeed, the compensation and benefits that companies will pay under Proposition 22 will be far from the costs that must be borne by their drivers. The UC Berkeley Labor Center estimates in October that 120% of California’s hourly minimum wage of $ 13 in 2021, or $ 15.60, will effectively shrank to $ 5.64 per hour because of the provisions in the initiative.

For example, drivers will be paid only for “engagement” time, from when they are traveling to pick up passengers or delivery to when they deliver the driver or package, not for waiting time between assignments. That is one third of their work time, Berkeley estimates, reducing $ 15.60 to only $ 10.45.

Some drivers will get an allowance of up to about $ 367 per month for health insurance, which can be applied to the California Affordable Care Act plan or other plans. But it will be given only to drivers on average 25 hours of work a week or more. Those who have 15 to 25 hours will receive half, and those who have less than 15 hours will not receive anything.

“Most drivers will not be eligible” for their benefits, Berkeley said.

Uber and Lyft have chosen to emphasize the intended consequences of upholding AB 5, rather than the real facts of their working relationship. They paint pictures of drivers who lose their rights set aside and are unable to trade.

They even hinted that AB 5 could make them completely out of business. Stacey Wells, spokesman for the Proposition 22 campaign, said that if the initiative failed, the company might have to downgrade their drivers, numbering as many as 400,000 in California, by 90% to accommodate the additional costs of caring for drivers. as an employee.

But by definition that makes sense, the company’s drivers are employees. According to the rules established by the California Supreme Court in decision 2018 and codified in AB 5, businesses must consider the employees of the workers unless they can meet three part test shows that workers are free from the control and direction of the hiring business, that they are doing work outside the normal activities of the hirer business, and they usually work independently in the trade or the same work as the work they do.

Becerra argues that Uber and Lyft cannot fulfill these elements. Drivers are involved in the company’s main transportation business; their compensation is determined by the company, which can change it unilaterally; its performance is monitored by the company; with the exception of the choice of hours they wish to drive, all terms and conditions of their work are determined by the company.

Uber and Lyft maintained from the start that they were excluded from AB 5 because they were not really transport companies, only software suppliers that drivers and passengers used to arrange trips.

Some courts reject the argument – “Uber would not be a viable business entity without a driver,” U.S. District Judge Edward M. Chen from San Francisco declared in 2015.

Over the next few months, as developing country lawsuits go through the courts and election day draws nearer, the viability of the show company’s business model will be tested. It should not be ignored how many models depend on the exploitation of workers.

“This initiative will set very low labor standards into law,” Dubal said, “canceling more than a century of norms around living wages and protecting the safety net for workers.”

It is true. The power of workers to ensure decent working conditions has declined in America for more than half a century. Proposition 22 will speed up slides.