The ballot measure, known as Proposition 22, would establish drivers as an independent class of workers with access to limited job benefits, along with wage and worker protections they’ve so far lacked under the gig economy model. Labor groups and many of driver advocates say the companies’ efforts, however, do not go far enough to protect workers and are merely an attempt, cloaked in friendly marketing materials, to quash a new law that would guarantee drivers access to the minimum wage, employer-provided health care and bargaining rights.

Drawing on a more than $186 million campaign war chest that Uber, Lyft, food delivery app DoorDash and other tech companies have raised, they are seeking to convince California voters that the ballot initiative reflects the will of drivers. They’ve cited limited survey data saying the vast majority of drivers want to remain contractors.

But critics see the measure as a last-ditch effort to strong-arm a tough law.

The gig companies are following a long history in California of powerful groups “manipulating the way the public understands propositions,” said Veena Dubal, an associate professor at the University of California Hastings College of the Law, who focuses on the gig economy and is an advocate for classifying drivers as employees in California. “They are working to trick the public … into voting in favor of this. And they’re getting traction.”

The heated battle could well result in major implications for gig workers not just in California, but across the country.

Here’s what you need to know.

What is the current status of drivers?

In most of the country, drivers are independent contractors who are able to work for Uber, Lyft, DoorDash, Instacart and others on demand. That comes with pros such as flexibility. But it also means there are no guaranteed hours or health

By Tina Bellon

Oct 5 (Reuters)Uber Technologies Inc UBER.N and Lyft Inc LYFT.O together are spending nearly $100 million on a November California ballot initiative to overturn a state law that would compel them to classify drivers as employees.

That sum looks less huge, however, than the potential costs of complying with the existing law, according to a Reuters analysis.

The two ride-hailing companies would each face more than $392 million in annual payroll taxes and workers’ compensation costs even if they drastically cut the number of drivers on their platforms, a Reuters calculation showed.

Using a recently published Cornell University driver pay study in Seattle as a basis, Reuters calculated that each full-time driver would cost the company, on average, an additional $7,700. That includes roughly $4,560 in annual employer-based California and federal payroll taxes and some $3,140 in annual workers’ compensation insurance, which is mandated in California.

The companies say they would need to significantly hike prices to offset at least some of those additional costs, which in turn would likely cause a decrease in consumer demand, but cushion the blow of the added costs to the bottom line.

Uber and Lyft have also said they could abandon the California market – an economy that would rank fifth in the world if the state were a sovereign nation. Other U.S. states have said they plan to follow California’s lead and pass similar laws.

A “yes” vote on California’s Proposition 22 gives Uber and Lyft what they seek, which is to overturn the state’s gig worker law, known as AB5, which took effect in January. Uber and Lyft have insisted the law does not apply to them, sparking a legal battle.

The tussle over classification of workers highlights the political and business risks facing Uber,

In a filing, Lyft (LYFT +0.7%) reveals expanding its insurance carrier partnerships to include Allstate, Liberty Mutual, and CSAA subsidiary Mobilitas.

Lyft plans to continue working with Progressive, AXA-XI, and Constitution State Services, which is Travelers’ third-party administrator.

The ride-hail company expects the changes to reduce potential volatility in its insurance costs for the policy year ending on September 30, 2021.

Lyft requires drivers to have personal auto insurance that meets the minimum state requirements, but notes that not all personal policies will cover accidents that happen while driving for the company.

For cases where personal coverage doesn’t apply, Lyft offers third-party liability coverage through its partner network.

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BOSTON, Oct. 1, 2020 /PRNewswire/ — Liberty Mutual Insurance today announced it has been selected by Lyft to provide coverage for drivers using its rideshare platforms throughout Arizona, Michigan, New Mexico, Texas and Utah, effective today. Under the program, Liberty Mutual provides specific coverages in five states from the time a driver has their Lyft app on to app off.

Liberty Mutual Insurance (PRNewsfoto/Liberty Mutual Insurance)

“We’re excited to have been selected to take part in Lyft’s auto insurance program,” said Liberty Mutual Insurance Sharing Economy & New Mobility Senior Vice President and Chief Underwriting Officer David Blessing. “Drawing on Liberty Mutual’s deep expertise in both commercial and personal lines, we are able to deliver complex risk management solutions to meet the insurance needs of one of the preeminent companies in the sharing economy.”

“We’re pleased that Lyft recognizes our dedication to innovation as we continue to develop compelling products and services that meet customers’ changing needs,” said Liberty Mutual Vice President, Product Technology Solutions, Nicholas Grant.  “Our Mobility Practice brings together specialized underwriting, actuarial, claims, and service teams for rideshare giants like Lyft, as well as car subscription, vehicle sharing, delivery services, and autonomous vehicle companies.”

About Liberty Mutual Insurance

At Liberty Mutual, we believe progress happens when people feel secure. By providing protection for the unexpected and delivering it with care, we help people embrace today and confidently pursue tomorrow.

In business since 1912, and headquartered in Boston, today we are the sixth largest global property and casualty insurer based on 2019 gross written premium. We also rank 77th on the Fortune 100 list of largest corporations in the U.S. based on 2019 revenue. As of December 31, 2019, we had $43.2 billion in annual consolidated revenue.

We employ over 45,000 people in 29

Uber’s treatment of its drivers has been under intense scrutiny this year, with many localities enforcing new rules on the ride-sharing company, including hourly wages. On Tuesday, Seattle became the latest city to enforce a minimum hourly wage on both Uber and Lyft.

As of January, both ride-sharing operations will be required to pay drivers at least $16 an hour, the minimum wage in Seattle for businesses with 500 or more employees. The decision to enforce this rule on Uber and Lyft was passed by the Seattle City Council in a unanimous 9-0 vote, the New York Times reports.

“The pandemic has exposed the fault lines in our systems of worker protections, leaving many frontline workers like gig workers without a safety net,” Seattle Mayor Jenny Durkan said about the decision.

Seattle is the second major city to pass a measure like this, following on from New York City’s measure in 2018. The minimum wage for these drivers in the Big Apple is currently set at $17.22 after expenses.

California as a whole also recently passed a bill that requires ride-sharing companies to classify drivers as employees and not independent contractors, which had allowed them to avoid paying hourly minimum wage, offering overtime pay, offering workers’ compensation, and providing unemployment insurance.

Uber and Lyft, for their parts, have strongly opposed these measures, attempting to spin their treatment of drivers as necessary for keeping costs low. Both have supported a measure on the California ballot in November that would exempt their drivers from the law reclassifying them as employees.

Uber said it intends to become "zero emissions" by 2040 as it moves to transition mainly to electric vehicles, as part of an effort to fight climate change Uber said it intends to become “zero emissions” by 2040 as it moves to transition mainly to electric vehicles, as part of an effort to fight climate change Photo: AFP / Josh Edelson

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