SACRAMENTO, Calif. — California’s progressive Democratic majority just can’t get over its ill-fated, yearslong failure to crush the burgeoning ridesharing industry — even after the state Supreme Court last year upheld a 2020 ballot initiative, Proposition 22, that allowed app-based ridesharing and delivery companies to classify their workers as independent contractors.
That should have been the end of this foolhardy campaign that — had it been successful — would have reduced job opportunities, limited consumers’ ability to easily get rides, and increased road fatalities. None of those benefits perhaps mattered to elected officials who are committed to doing the bidding of the state’s politically powerful unions, but at some point it’s best to just accept defeat and move on to other nonsense.
If you wonder why California businesses continue their exodus to other states, one need only look at this approach toward companies such as Uber, Lyft, and DoorDash. They aren’t leaving, of course, but the punitive way that state lawmakers have handled the issue should remind any business of the state’s dogged determination to impede their efforts to grow and prosper. The attacks on ridesharing have gone on since 2019 — and will apparently continue apace.
The latest legislative effort is Assembly Bill 1340, which passed the full Assembly in June and was approved by the Senate Transportation Committee in early July. It would allow drivers to unionize and “promote collective bargaining rights for transportation network drivers and state intent that the state action antitrust exemption apply to … drivers and their representatives.” Democrats couldn’t kill the industry quickly, so they’ll try to destroy it slowly via collective bargaining.
This is no minor piece of legislation. As SEIU California boasted in its official support statement included in the legislative analysis, “AB 1340 is historic in that it would empower more than 800,000 workers to have a voice on the job, giving more workers the right to unionize than any other legislation in recent California history. Not since the California Agricultural Labor Relations Act of 1975 extended the right to organize and collectively bargain to farmworkers has our state extended the right to unionize to workers at this scale.”
Basically, the National Labor Relations Act exempts independent contractors from its dictates — and this would provide a new right to organize for them. The results could spread across the country, which often is the goal of far-reaching California legislation. Most rideshare drivers are part time. Myriad studies show that they drive for these companies to earn extra income between other jobs and schooling. They prefer the flexible hours.
The unions and their Democratic allies keep trying to turn these flexible, app-based jobs into facsimiles of highly regulated shop floor worksites. Unionization would obliterate the advantages of such work, which appears to be the point of these types of legislation. AB 1340 also appears to contradict Proposition 22. As Uber explained in a statement, the measure “proposes several changes that are in direct conflict” with the initiative, which passed with nearly 60 percent of the vote.
Furthermore, the bill “would fundamentally alter the way platforms such as Uber operate. By targeting a single segment of the broader gig economy, AB 1340 risks destabilizing a service Californians rely on every day. It will drive up costs in a state already struggling with affordability, disproportionately hurt low-income communities, and ultimately reduce driver earnings as demand falls.” Clearly, both sides see this as a historically broad measure.
The debate over ridesharing goes back to the California Supreme Court’s 2018 Dynamex decision, which banned companies from using independent contractors as their prime workforce except in some limited situations. The California Legislature then passed Assembly Bill 5, which codified the decision — and began cracking down on ridesharing companies and others that relied on freelancers. The law created an easily foreseen mess that banned all types of independent work, so the Legislature passed more than 100 exemptions. Then voters approved Proposition 22.
By the way, the Biden administration tried to impose similar rules nationwide through regulatory fiat. The whole idea was crazy, especially during COVID when people were struggling to find work — and freelancing was their only opportunity. The California Supreme Court revisited the issue in 2023’s Castellanos v. State of California decision, in which the court upheld the constitutionality of Proposition 22. That overturned the Alameda County Superior Court’s finding that the initiative impeded the Legislature’s authority on workers compensation matters.
However, the ruling determined that “the ballot measure couldn’t prevent future legislation to allow rideshare drivers to unionize,” as the San Diego Voice and Viewpoint explained. After the ruling, an SEIU attorney told CalMatters that it “expressly leaves open the possibility of legislation that provides worker’s compensation benefits for app drivers.” So that spawned AB 1340 and this continuing union effort to hobble this industry.
I guess it’s too much to ask the Legislature and Gov. Gavin Newsom to just let workers and employers largely hammer out their own employment terms. No one is forcing anyone to take these jobs. They don’t work for everyone, but surveys show that drivers are generally happy with the arrangement. It’s also obvious that these services greatly benefit consumers, who have wide access to rides. The emergence of ridesharing also has pushed taxi companies to up their game.
As an aside, TNCs improve public safety. A 2023 study found that “ridesharing has decreased U.S. traffic fatalities by 5.4% in areas where it operates,” largely because it provides an easy alternative for people who had been drinking. I’m so tired of special interests trying to crush every advancement, but given AB 1340’s movement, there’s little indication that the state’s Democratic majority is ready to let go of their anti-ridesharing obsession.
Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].