Assembly Bill 1340 has, as reported by Politico, “cleared its first hurdle … deepening a yearslong clash between organized labor and major California-based tech firms.” The “clash” was set off by Assembly Bill 5 in 2019, a predatory law that was a gift to organized labor that lusted for the membership dues of a half million California rideshare drivers. Any pretense that this isn’t true was shattered when AB 5’s lead sponsor, Lorena Gonzalez, became chief officer of the California Labor Federation, AFL-CIO in 2022.
Gonzalez’s bill in effect outlawed gig jobs in the state by reclassifying workers. Under AB 5, independent contractors had to be hired – they could no longer work on a freelance basis. The harm began before the law was even if effect.
Social media were filled with workers who knew that they were going to lose their livelihoods because of the bill. One freelancer told Gonzalez through a tweet that her “response to the fallout from this legislation is among the cruelest I’ve ever seen from an elected official.” Another wondered “if I’m going to lose 30% of my income (or more) with the snap of California’s fingers on January 1st” because the “state of California is dismantling much of what I’ve worked for with #AB5.”
The toll added up so quickly that less than nine months into the AB 5 nightmare, “more than 75” exemptions were granted for workers in various fields – many of them in politically preferred professions and occupations – said Pacific Legal Foundation attorney Jim Manley.
“If a law requires dozens of exceptions to avoid destroying the careers of successful independent professionals, it’s a strong indication that the law’s basic premise is flawed,” Manley added.
Eventually more than 100 exemptions were approved by Sacramento.
Rideshare companies Uber and Lyft ultimately challenged the law in court, arguing that drivers don’t work for them but are instead customers who buy from the companies the apps that connect them to passengers.
DoorDash, Lyft, and Uber also backed a ballot measure, Proposition 22, for the November 2020 election. If it passed, app-based drivers would be classified as independent contractors. Voters approved it by a 59-41 margin.
But that wasn’t the end. The state’s Justice Department, the cities of San Francisco, Los Angeles and San Diego, and others sued Uber and Lyft, seeking back pay and damages for drivers who used those companies’ apps from 2016 to 2020, before Prop. 22 was passed.
Only about 5,000 drivers “filed claims with the state labor commissioner’s office in 2020,” says KQED, “alleging that they were denied overtime, mileage reimbursement and other benefits employees are entitled to.” Yet a quarter of million are eligible to reap the rewards of a settlement of that lawsuit that is being negotiated.
There are now roughly 1.4 million app-based drivers in California who ferry passengers and make deliveries through tech companies such as DoorDash and Instacart. The target for union bosses has become even richer over the last five years.
It’s a bit confusing how rideshare drivers, who are considered by state law to be independent contractors – some of whom are “are teaming up and creating their own apps to make more money” – can unionize. Who are they going to bargain with? What would be their leverage since there is no employment to walk away from?
And who is going to join anyway? A 2023 Bureau of Labor Statistics survey determined that independent contractors “overwhelmingly preferred their work arrangement (80.3 percent), whereas 8.3 percent would prefer a traditional work arrangement.”
Are these workers who are happy with the way they’ve structured their lives willing to give up the flexibility and freedom they have as independent contractors in exchange for membership in a union that will put demands on them beyond just dues?
A significant portion will understand that neither AB 5 nor AB 1340 were concocted on their behalf but rather as payoffs to covetous unions. Voters will also wonder how their support for Prop. 22 is being overridden in the Legislature.
Kerry Jackson is the William Clement Fellow in California Reform at the Pacific Research Institute.
