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California’s Controversial Prop 22 Could Have Nationwide Impact

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2 years ago

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  • If passed, California’s Prop. 22 would classify gig workers, like Uber and Lyft drivers, as independent contractors instead of employees, meaning they might have more flexibility in their schedules but are not given standard full benefits like healthcare and sick leave.
  • Uber, Lyft, and other apps have shelled out a whopping $200 million into a ‘Yes on 22’ campaign. Meanwhile, its opponents have spent about $20 million, with prominent figures like presidential candidate Joe Biden and Sen. Kamala Harris speaking out against it.
  • Currently, California voters are split. A UC Berkeley poll found that 46% of voters said they were voting yes, 42% were voting no, and 12% were undecided
  • Experts think that no matter which way the vote goes, this could be the start of a national debate about gig workers in America, how companies treat them, and how that work is regulated.

What is Prop. 22?

While California’s divisive Proposition 22 might only be on the ballot in one state, the impacts of it could be felt nationwide. 

Prop. 22 exempts app-based rideshare and delivery companies from providing certain workers with benefits by classifying drivers as independent contractors instead of employees. It comes one year after a law known as AB5 was passed in the state requiring gig workers to be treated as employees, and aims to carve an exception for major rideshare and similar companies. 

Supporters of Prop. 22 include those companies, like Uber, Lyft, and DoorDash. They say that the measure gives drivers flexibility in their schedules, as well as minimum earnings benefits, even though it does not provide the full standard benefits employees would receive. They also say it protects jobs and that prices could increase if Prop. 22 fails. 

However, opponents argue that these companies should not be allowed to skirt around rules to avoid giving their workers full benefits. Those who have come out against the proposition include the California Labor Federation and Sen. Kamala Harris. The prop has even made national headlines, with presidential candidate Joe Biden and New York Rep. Alexandria Ocasio-Cortez also coming out against it. 

National Implications for Prop. 22

It’s a split issue among California voters. According to a late October poll from UC Berkeley, 46% said they were voting yes, 42% were voting no, and 12% were undecided. But the decision is large, as experts think its implications will reach beyond the borders of the state. 

For example, if Prop. 22 passes, other companies could be prompted to follow Uber and Lyft’s independent contracting model. 

“I think you’ll see platform-based companies in other service industries either try to fit themselves into the exception [to AB5], or, if Proposition 22 is successful, try to do the same thing,” attorney Jason Morris told CBS News. 

He is not alone in thinking this. New York Times reporter Kate Conger, who has covered Prop. 22, thinks this is the first page of a national dialogue around gig workers. 

“No matter the outcome of Proposition 22, it’s just the beginning of what I think will become a national debate over regulating gig work. Companies like Uber and Lyft are already beginning to lobby for similar changes at the federal level,” she said. 

“It also raises questions about how traditional employers will manage their workforces in the future,” Conger continued. “Will we see employers shift their employees to a gig work model in order to take advantage of the reduction in costs that Uber and Lyft have long enjoyed?”

High-Budget Campaign from ‘Yes on 22’

The ‘Yes on 22’ campaign has spared no expense when it comes to rallying support for the proposition. Politico reported that the campaign has spent over $200 million on the effort, with virtually all of that money coming from five companies: Uber, Lyft, Postmates, Instacart and DoorDash. Their opponents have raised just around $20 million in comparison. 

‘Yes on 22’ ads are plastered all over the state and aired constantly on television. One of their biggest claims is that drivers support the proposition by a 4-1 margin, but that statistic has been called into question. According to a fact check from the Sacramento Bee, that claim is true but only in part. 

The campaign cites a poll from a blog called The Rideshare Guy, as well as other polls commissioned by Uber. While those do show that 70-80% of drivers support Prop. 22, the Bee writes that these polls are not “scientific.” The survey was not done by a random sampling of drivers, just by those who were signed up for the site’s digital newsletter. Uber’s poll also had slanted questions that may have pushed the results. 

“They have highly biased and problematic surveys from which they are getting this data from,” UC Hastings law professor Veena Dubal told the Bee. 

Uber and other companies have also faced criticism for pressuring their employees into supporting the measure. Drivers ended up suing Uber for bombarding them with messages about Prop. 22 in the app while they were driving, asking them to pledge their support. A judge ended up siding with Uber over the matter. 

On October 30, Uber engineer Eddy Hernandez wrote a piece explaining his decision to leave the company over the pressure they were putting on employees when it came to Prop. 22, which he disagrees with. 

“Inside the company, pushing back against Prop 22 was like trying to stop a bullet. Leadership made it a company-wide initiative, which meant that Prop 22 was part of employees’ performance and promotion reviews,” Hernandez wrote.  

“On top of that, internal messaging communicated an expectation of loyalty toward Uber above all else,” he continued. “Unlike drivers, I did not have to deal with constant in-app pop-ups asking me to commit myself to voting Yes on Prop 22. But if I as an engineer with considerable power, influence, and access to Uber leadership felt coerced into silence about Prop 22, how did drivers feel?”

See what others are saying: (Los Angeles Times) (Business Insider) (San Francisco Gate)

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Disney Renders DeSantis-Appointed Oversight Board Powerless

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2 days ago

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March 30, 2023

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The board is looking into avenues for potential legal retaliation, but Disney maintains its actions were “appropriate and were discussed and approved in open, noticed public forums.”

The Fight For Disney’s Special District 

Disney has stripped powers from the board Florida Gov. Ron DeSantis (R) installed to oversee its theme parks, board members claimed. 

According to the Orlando Sentinel, board member Brian Aungst Jr. said Disney’s action “completely circumvents the authority of this board to govern.”

DeSantis has been waging a war against the House of Mouse ever since the company condemned his controversial “Don’t Say Gay” law, which heavily restricts the discussion of sexuality in classrooms. To retaliate against the company, he took control of Disney’s special status that allowed it to operate as a self-governing district with autonomy over the land encompassing and surrounding Walt Disney World. 

Disney operated under that special status for decades under the Reedy Creek Improvement District, but after DeSantis took over, it was changed to the Central Florida Tourism Oversight District. DeSantis appointed all members of the board, prompting concerns that it could be used to silence and sway Disney on social and cultural issues, including its content. 

The oversight board gets control over infrastructure, property taxes, issue bonds, road and fire services, and other regulations. When DeSantis seized it, it was considered a big loss for the entertainment giant, but now, board members say the company may have lost little to no power at all. 

As first reported by the Sentinel, Disney and the previous board signed an agreement allowing Disney to retain control over much of its land on Feb. 8, the day before Florida’s House signed the bill that gave DeSantis power to stack the board. Disney now holds veto powers over changes to the park, and any changes must be subject to the company’s “prior review and comment” to ensure thematic consistency. 

The agreement also bars the board from using Disney’s name or trademarked characters like Mickey Mouse.

The Board’s Plan to Fight Back

Board members reportedly did not become aware of this until recently and discussed the issue at a Wednesday meeting. 

“This essentially makes Disney the government,” board member Ron Peri said, via Click Orlando. “This board loses, for practical purposes, the majority of its ability to do anything beyond maintain the roads and maintain basic infrastructure.”

The subject of the agreement that has perhaps caught the most public attention is its staying power. The declaration says it will remain “in effect until 21 years after the death of the last survivor of the descendants of King Charles III, King of England living as of the date of this Declaration.” That means that so long as direct members of the royal family are alive, so is this deal. 

According to BBC News, this is known as a “royal lives” clause and its use dates back to the 17th century, though it is rarely used in the U.S.

The board, however, already has plans to push back against Disney and has voted to hire outside legal counsel to evaluate their options.

“We’re going to have to deal with it and correct it,” Aungst said. “It’s a subversion of the will of the voters and the Legislature and the governor. It completely circumvents the authority of this board to govern.”

A spokesperson for DeSantis released a statement claiming that “these agreements may have significant legal infirmities that would render the contracts void as a matter of law.”

Disney maintains everything was above board. 

“All agreements signed between Disney and the district were appropriate and were discussed and approved in open, noticed public forums in compliance with Florida’s Government in the Sunshine law,” the company said. 

See what others are saying: (Orlando Sentinel) (Click Orlando) (The Washington Post)

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White Supremacist Propaganda Reached Record High in 2022, ADL Finds

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3 weeks ago

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March 9, 2023

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 “We cannot sit idly by as these extremists pollute our communities with their hateful trash,” ADL CEO Jonathan Greenblatt said.

White supremacist propaganda in the U.S. reached record levels in 2022, according to a report published Wednesday by the Anti-Defamation League’s Center of Extremism.

The ADL found over 6,700 cases of white supremacist propaganda in 2022, which marks a 38% jump from the nearly 4,900 cases the group found in 2021. It also represents the highest number of incidents ever recorded by the ADL. 

The propaganda tallied by the anti-hate organization includes the distribution of racist, antisemitic, and homophobic flyers, banners, graffiti, and more. This propaganda has spread substantially since 2018, when the ADL found just over 1,200 incidents. 

“There’s no question that white supremacists and antisemites are trying to terrorize and harass Americans with their propaganda,” ADL CEO Jonathan Greenblatt said in a statement. “We cannot sit idly by as these extremists pollute our communities with their hateful trash.” 

The report found that there were at least 50 white supremacist groups behind the spread of propaganda in 2022, but 93% of it came from just three groups. One of those groups was also responsible for 43% of the white supremacist events that took place last year. 

White supremacist events saw a startling uptick of their own, with the ADL documenting at least 167, a 55% jump from 2021. 

Propaganda was found in every U.S. state except for Hawaii, and events were documented in 33 states, most heavily in Massachusetts, California, Ohio, and Florida.

“The sheer volume of white supremacist propaganda distributions we are documenting around the country is alarming and dangerous,” Oren Segal, Vice President of the ADL’s Center on Extremism said in a statement. “Hardly a day goes by without communities being targeted by these coordinated, hateful actions, which are designed to sow anxiety and create fear.”

“We need a whole-of-society approach to combat this activity, including elected officials, community leaders, and people of good faith coming together and condemning this activity forcefully,” Segal continued. 

See what others are saying: (Axios) (The Hill) (The New York Times)

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Adidas Financial Woes Continue, Company on Track for First Annual Loss in Decades

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3 weeks ago

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March 8, 2023

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Adidas has labeled 2023 a “transition year” for the company. 

Yeezy Surplus 

Adidas’ split with musician Kanye West has left the company with financial problems due to surplus Yeezy products, putting the sportswear giant in the position to potentially suffer its first annual loss in over 30 years. 

Adidas dropped West last year after he made a series of antisemitic remarks on social media and other broadcasts. His Yeezy line was a staple for Adidas, and the surplus product is due, in part, to the brand’s own decision to continue production during the split.

According to CEO Bjorn Gulden, Adidas continued production of only the items already in the pipeline to prevent thousands of people from losing their jobs. However, that has led to the unfortunate overabundance of Yeezy sneakers and clothes. 

On Wednesday, Gulden said that selling the shoes and donating the proceeds makes more sense than giving them away due to the Yeezy resale market — which has reportedly shot up 30% since October.

“If we sell it, I promise that the people who have been hurt by this will also get something good out of this,” Gulden said in a statement to the press. 

However, Gulden also said that West is entitled to a portion of the proceeds of the sale of Yeezys per his royalty agreement.

The Numbers 

Adidas announced in February that, following its divergence from West, it is facing potential sales losses totaling around $1.2 billion and profit losses of around $500 million. 

If it decides to not sell any more Yeezy products, Adidas is facing a projected annual loss of over $700 million.

Outside of West, Adidas has taken several heavy profit blows recently. Its operating profit reportedly fell by 66% last year, a total of more than $700 million. It also pulled out of Russia after the country’s invasion of Ukraine last year, which cost Adidas nearly $60 million dollars. Additionally, China’s “Zero Covid” lockdowns last year caused in part a 36% drop in revenue for Adidas compared to years prior.

As a step towards a solution, Gulden announced that the company is slashing its dividends from 3.30 euros to 0.70 euro cents per share pending shareholder approval. 

Adidas has labeled 2023 a “transition year” for the company. 

“Adidas has all the ingredients to be successful. But we need to put our focus back on our core: product, consumers, retail partners, and athletes,” Gulden said. “I am convinced that over time we will make Adidas shine again. But we need some time.”

See what others are saying: (The Washington Post) (The New York Times) (CNN)

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