Uber, Lyft Funding Possible 2020 Ballot Initiative to Regulate Gig Workers

Ride-hailing companies Uber and Lyft on Thursday announced they are putting $30 million each into a campaign account for a possible 2020 California ballot initiative to regulate so-called gig economy workers.

Uber Chief Legal Officer Tony West said the companies will pursue a ballot measure if the Legislature doesn't take action on its own — but he said the ballot measure isn't the company's first preference.

"That is a reluctant second choice," he said. "We don’t think that is the best use of funds. We don’t think that is the best alternative. We think negotiating a historic deal with the right stakeholders around the table in this legislative session is the best path forward."

DoorDash also announced a $30 million "initial commitment" later on Thursday afternoon.

Gig economy companies are facing pressure to update their employment model after the 2018 California Supreme Court Dynamex decision that changes who can be classified as an employee versus a contractor.

That decision stated that if a worker performs a core function for a business — like driving for Uber — that worker must be classified as an employee.

Assembly Bill 5, currently in the Legislature, would codify that ruling. The Senate Appropriations Committee is expected to decide on Friday whether the bill will advance further through the Legislature and face a vote on the Senate floor.

AB 5 author Lorena Gonzalez (D, San Diego) said tech companies shouldn't get to create their own rules for workers.

"No company, no corporation, no type of employment is so special that they get to absolve themselves of basic labor laws," she said.

However, ride-hailing advocates point out AB 5 does contain numerous exemptions for industries that use a contractor model. Uber and Lyft have been negotiating with Gov. Gavin Newsom's administration for legislation outside of AB 5 that would clarify their industry regulations.

West said the state can provide a new model for gig workers.

"We have the opportunity in California to modernize the legal framework on how independent workers in the gig economy are treated," he said.

Any new bill that would give ride-hailing companies what they want in this legislative session would need to be fast-tracked. The session ends for the year in two weeks.