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After spending $48 million for the passing of Prop 22 back in Nov. 2020, ridesharing giant Lyft could be fined $3,371 for not disclosing it paid for some ads apart of its Prop 22 campaign in California.
The state’s Fair Political Practices Commission is reportedly proposing that the gig economy company be fined $1,499 for email ads that didn’t include a note indicating they were paid for by Lyft, $936 for robocalls and text ads that were also missing such a message, and $936 for robocalls and text ads that bore the wrong name. The case is on the FPPC’s schedule for approval this month.
Of course, if the commission decides to fine Lyft for the proposed amount it would be nothing compared to the $48 million that the company poured into the Prop 22 campaign. Together with Uber, DoorDash, Instacart, and Postmates, the gig economy apps collectively spent over $200 million to push the legislation that would allow them to continue paying and classifying its drivers as independent contractors and not full-time employees as AB5 had required them since the start of 2020. This exorbitant amount made Prop 22 the most expensive ballot measure in California’s history. California voters approved Prop 22 in the Nov. election, with 58.63% of votes in favor.
After the state passed AB5, the aforementioned companies crafted Prop 22 in an effort to skirt the responsibilities attached to classifying their drivers and couriers as full fledged employees. The companies held up complying by defying AB5 and the state of California in court until Prop 22 passed in Nov. and even threatened to shut down operations in California at one point if they were forced to do so.
Instead of all workers having full-time employee status, Prop 22 requires gig companies to provide an alternative set of benefits to cover expenses, including healthcare subsidies — which they are now charging to the consumer. Lyft’s fees have increased by 30 cents to $1.50 based on location. In Los Angeles, Uber raised its prices by 99 cents for food delivery and 75 cents for rides. Labor advocates have called this move a “corporate bait and switch.” Gig companies argued as they campaigned for Prop 22’s passage that making drivers employees would raise prices, but fees are still going up anyway.
One Lyft driver and labor organizer told Bloomberg that voters were duped into supporting Prop 22, which ended up costing them more without securing adequate working conditions for drivers: “[Gig companies have] written their own labor law, and through deceptive advertising, they were able to get the electorate to approve it. Now, both drivers and consumers are paying the price.”
Incentivized by the measure’s success, executives at Lyft and Uber have said the initiative in California could serve as a blueprint for labor battles across the country. Last year, the companies started a national advocacy group, App-Based Work Alliance, which is expected to take a lead role this year as Illinois, Massachusetts, New York, and Washington examine employment rights.