The US state of California has voted to keep rideshare and delivery industry workers as independent contractors in the recent election cycle. The Financial Times, in its editorial titled ‘A California setback for gig economy workers’, was quick to denounce the referendum, calling on other US lawmakers to not follow suit. This is a strange reading of the passage of Proposition 22 (Prop-22), which is a resounding endorsement of the role of the platform economy in unlocking livelihood opportunities and catalysing economic growth. Prop-22 repealed the unpopular Assembly Bill 5 (AB-5) legislation, which mandated platforms treat their workers as employees. AB-5 found analogous applications in France and Spain too, and inadvertently led to job losses in the broader gig economy. Over 100 exemptions have been amended to AB-5 over the past year, illustrating the struggles of applying a ‘100-year-old solution to a modern problem’.
Prop-22 will make the Protect App-Based Drivers and Services Act the law of the land. Rideshare and delivery workers will continue to be flexible, gig-based workers while also gaining economic security. Worker protection will take the form of assured earnings, healthcare subsidies, vehicle expense compensation, occupational accident insurance, and protection against discrimination or harassment, owed by the platform company. This is but the first step that California and the rest of the US can take in the direction of universalised social security.
Source: Financial Express
