Prop 22: CA Supreme Court hears case on law classifying app-based drivers as contractors

BySuzanne Phan and Gloria Rodríguez KGO logo
Wednesday, May 22, 2024
CA Supreme Court hears case impacting gig economy, app-based drivers
California justices heard arguments on whether Proposition 22 is constitutional, which could change how companies like Uber and Lyft operate.

SAN FRANCISCO (KGO) -- The California Supreme Court is considering a case that could have massive ramifications for Bay Area-based ride-hailing companies and their workers.

In question is the constitutionality of Prop 22, which was approved by voters back in 2020. It classifies app-based drivers as contractors instead of employees. This means they are not legally entitled to minimum wages, overtime, sick leave, and other benefits.

Appeals were filed, but the issue has been tied up in the courts for years.

The California Supreme Court justices heard arguments Tuesday afternoon on whether Proposition 22 is constitutional. The outcome could impact more than a million people in California and could change how companies like Uber and Lyft operate.

Among other things, the ballot measure stripped worker's compensation coverage for on-the-job injuries and illnesses.

Labor groups think this is unconstitutional since workman's comp was once codified by the legislature.

MORE: Only 1 San Francisco neighborhood voted to support Prop 22

Prop 22 supporters say another century-old law gives the last word to the people.

Jason Munderloh of San Francisco has been driving for Lyft for a decade. He says prop 22 needs to change.

"I think Prop 22 is unconstitutional. We need a real rights as gig workers," said Munderloh.

That law says Munderloh and other app-based drivers are contractors, not employees. Munderloh says he's denied important worker compensation benefits.

"Prop 22 doesn't offer us overtime, doesn't offer health care, it doesn't offer us many of the things we need as workers," said Munderloh. "Living in SF, you need a reasonable livable wage and we are denied that under Prop 22."

About 200 gig workers rallied outside the State Supreme Court in San Francisco on Tuesday.

"Prop 22 created a law so that the gig companies could create money at the expense and exploitation of gig drivers," said John Mejia of San Francisco.

Uber and Lyft have both previously threatened to leave cities and states that classify drivers as employees.

Tuesday afternoon, the California Supreme Court heard oral arguments in a lawsuit by the service employee's international union (SEIU) and four drivers.

The State Supreme Court justices listened to an hour of testimony, asking difficult questions, but did not say how they would rule on Prop 22.

John Logan is a SFSU professor of labor and employment.

"Prop 22 is really to decide whether or not many gig workers are employees or independent contractors and it will have national significance," said Logan. "Everyone is watching what California Supreme Court will decide and whether or not these companies have a right to classify their workers as independent contractors."

MORE: Here are both sides of Proposition 22, ballot measure that affects California's app-based drivers, gig economy

In a statement Tuesday afternoon, Uber said it hopes the State Supreme court will uphold Prop 22.

It stated "forced employment would be devastating for thousands of drivers and couriers who turn to Uber for flexible work..."

Uber also said, "Millions of Californians would see major service reductions and cost increases."

The State Supreme Court will issue a ruling on the case within three months.

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