Four Years After Passing, Prop 22 Shows a Way Forward for App-Based Workers

This month marks the four-year anniversary of California voters passing Proposition 22, the landmark ballot initiative that led the way in providing app-based workers with flexibility AND benefits.

The ballot initiative, which passed overwhelmingly with nearly 60 percent of the vote, set two significant policies into law. First, it confirmed that app-based workers are independent contractors, guaranteeing them the scheduling flexibility to work - or not - on their own terms. 

This classification reflects the preference of the vast majority of app-based workers who want the freedom to choose when, where, and how often they work. It is especially crucial for drivers and delivery workers who choose this work for its flexibility and scalability, whether to accommodate caretaking responsibilities, supplement other income, or simply out of preference for independence over a set work schedule.  

Second, Prop 22 granted qualifying app-based workers a suite of new protections, including an earning guarantee of at least 120 percent of the local minimum wage, health insurance stipends, and mileage reimbursements. 

In the four years since the law went into effect, app-based companies have been remarkably effective at providing these Prop 22 benefits to workers. 

For example, 85 percent of California Lyft drivers who have driven since Prop 22’s implementation have received at least one wage “top up,” ensuring that a worker’s wages meet the earnings guarantee; Instacart has paid out about $40 million in health care subsidies to its delivery workers; and Uber has invested more than $1 billion in Prop 22 benefits.

These critical data points reflect the larger truth – the vast majority of app-based workers are seeing the benefits of this new approach. In fact, out of nearly a million app-based workers in California, there have only been 54 claims made by workers related to Prop 22 over nearly four years. That represents a 99.995 percent success rate for app-based platforms.

At the same time, the app-based industry continues to be an economic engine for the state, generating $38 billion in economic impact through 660 million transactions each year in California alone, and $212 billion across the entire country. For local restaurants, grocers and other businesses, the app-based industry delivers $32 billion in boosted revenue. 

It’s important to remember that independent work is not new - it has just traditionally been called “freelance work” – something that 64 million Americans participated in last year. App-based platforms have democratized and scaled independent work, making it more accessible to more people, and offering a level of autonomy and flexibility that simply is not possible in an employer-employee relationship. 

Indeed, 90 percent of app-based workers cite flexibility as a reason why they choose to drive or deliver — and the majority do so on a supplemental, rather than full-time, basis: eight in ten drivers and delivery workers nationally spend 20 hours or fewer a week on app-based platforms. Instead of forcing an antiquated system on today’s work landscape and making workers choose between having access to benefits or autonomy over their own work schedules, initiatives like Prop 22 offer a path forward for achieving both. 

With the California Supreme Court upholding Prop 22 this summer, the Golden State is joined by Washington, Minnesota, Pennsylvania and other states in exploring innovative new frameworks to provide app-based workers with benefits that have traditionally been inaccessible.

As lawmakers in Congress and state governments consider benefits systems that support 21st century work, Prop 22 can serve as an example of how the advantages of independent work can be combined with access to benefits that workers want and deserve.