What Does Prop-22 Mean for You?

Man holding a pen and paper

Do you rely on Lyft, Uber, or other rideshare services to take you to and from locations regularly? Or do you rely on a paycheck from a ride-sharing business as an independent contractor? If you fall into either of these two groups, here’s what Prop-22 means for you.

New legislation (AB-5) was passed by California lawmakers at the start of 2020. These legislations threaten to reclassify all Uber and Lyft drivers as W-2 wage-earning employees. The resulting rise in costs for Uber and Lyft would make the margins unworkable for those organizations. The enforcement of AB-5 would mean longer wait times, significantly higher prices, and even a potential permanent shutdown of services in many areas—restricting access to app-based rideshare and delivery services that millions rely on. This law would eliminate the flexibility it currently offers to work when you want, where you want. Rather, drivers would have to be classified as full-time employees with scheduled shifts.

Prop-22 is the ballot measure funded by Uber, Lyft, and Postmates, it sets out to:

  • Protect the right of app-based rideshare and delivery drivers to choose flexible work as independent contractors.
  • Preserve access to earning opportunities for struggling Californians with the need to supplement lost income or jobs. 
  • Provide drivers new benefits and protections in these tough economic times including a minimum earnings guarantee, access to health care benefits, and insurance against illnesses and injuries acquired on the job.
  • Implement new safety protections for consumers and the public, including providing for recurring background checks of drivers, mandatory safety training, and zero tolerance for drug, alcohol, and other offenses. 
  • Protect the availability of app-based home delivery services that are providing food, medicine, and groceries to those in need, and the rideshare services getting essential workers to their jobs and keeping drunk and impaired drivers off our roadways.

Ultimately, without rideshare services, the convenience of having a meal delivered to your doorstep or getting safely shuttled home from the bar after a night out will no longer be an option. In turn, restricting access to these rideshare services will likely lead to more DUIs. 

Drivers support Prop-22 to maintain the flexibility to choose when they want to drive. 

If your business hires 1099 contractors, or, if you re-classified your workers to W-2s at the turn of the year, reach out to the team at the Milikowsky Tax Law to review your classifications, ensure you are correctly classifying your workers, and protect yourself in the event of EDD audit.