While Proposition 22’s resounding passage sent a message of voter preference for independence over regulation and could further efforts to amend AB5, it’s unclear how that may take shape in Sacramento.
Still, with the measure now enacted, it should help with aspects of the state’s economic recovery, Adam Summers, a research fellow at the Independent Institute, told the Northern California Record.
“The immediate impact is that it basically exempts the rideshare drivers and delivery people from AB5 –and so for them it has a huge impact – they were facing substantial job losses and now they don’t have to worry about that anymore,” Summers said.
Had Proposition 22 not become law, Uber, Lyft and other gig economy companies had intimated they were prepared to move out of California.
As it now stands, the companies would like to see similar measures approved in more states or perhaps at the federal level, the Washington Post reported.
And it could lead other businesses to pursue their own ballot initiatives.
“It depends on how much pull those other industries have and how much they are willing to spend,” Summers said.
Proposition 22 passed in part because Californians were protesting higher prices and fewer services, but the roughly 3 million votes by which it passed also should serve as a wake-up call to the legislature, Summers said.
“Ideally to repeal AB5 altogether, or at least make the law much more narrowly tailored,” he said.
Dozens of professions have sought and received exemptions from AB5 mandates, Summers said.
“Another takeaway from this is that AB5 and similar kinds of legislation are going to foster more campaign contributions and special-interest lobbying, kind of like paying protection money to the legislature, and it’s a reason why California is always at or near the bottom of the list of business rankings,” Summers said. “If they have to do more lobbying, that’s money they are not able to invest back into growing their business.”
Summers noted that in economists’ terms it’s known as a deadweight loss.
“If Prop 22 passing can spawn rollbacks in AB5, that would bode well for California’s economic recovery, and for the welfare of the workers by allowing them to continue to work and not seeing their jobs lost because the state has made their jobs too expensive for employers,” Summers said. “If people want to work as independent contractors, then they should be free to do that.”