San Francisco Chronicle - (Sunday)
What gig measure’s OK means
Proposition 22 has passed, setting a new highwater mark for spending on a California ballot measure.
As a result, gig workers for Uber, Lyft, DoorDash, Instacart and Postmates in the state will remain as independent contractors, rather than being subject to being reclassified as employees under AB5, the state’s gigwork law.
For the average Californian, the biggest impact may be what goes away: TV shows will no longer be studded with a barrage of Prop. 22 commercials and mailboxes will no longer be stuffed full of glossy flyers, now that the gig companies have finished spending their record $ 205.7 million to pass the measure.
Here are answers to some other questions about its impact.
Q: Will rides and deliveries cost more?
A: The gig companies are shouldering some extra expenses and may pass some or all of those along to customers. Uber CEO Dara Khosrowshahi said in an earnings call on Thursday that Prop. 22 “may have some implication as it relates to rates,” but that he didn’t think that would significantly affect trip volumes, implying that any increase would be minimal.
DoorDash said it has not yet determined how Prop. 22’ s provisions will impact customer costs but “should have a better sense as they take effect.” It has no plans to change pricing for restaurants, but “some partners using other DoorDash products may see higher costs.”
Q: What’s different for drivers and couriers?
A: Since they remain independent contractors, they can continue to log in and out of apps as they do now. They are now entitled to an earnings guarantee; a health care subsidy if they work enough hours; and some coverage for onthejob accidents.
Q: What’s different about wages?
A: Prop. 22 guarantees a wage floor — minimum hourly pay drivers would average over a twoweek pay period — of 120% of minimum wage plus 30 cents a mile. That just applies to engaged time, which starts when they accept a ride or delivery request until it ends; it does not include waiting time. For drivers who already make more than this, pay would not change. There is no provision for overtime pay. Tips, tolls, cleaning fees and airport fees are on top of the minimum. Harry Campbell, who runs the Rideshare Guy blog, noted that drivers should continue to track their mileage, including during waiting times, as they can still deduct mileage expenses on their taxes ( other than the amounts the companies now cover).
Q: How much are the health care stipends?
A: They’re pegged to 82% of the average cost of a Covered California Bronze plan. The companies say the full subsidy comes to about $ 367 a month; the partial one is $ 184 a month.
Q: How do drivers get the health care stipends?
A: There are some gotchas involved, but the companies say they will help. Workers must average at least 25 hours of engaged time a week over an entire quarter to receive the full subsidy, or 15 hours to receive half of it. Drivers and couriers could easily fall below the threshold without noticing if they’re sick or on vacation.
Lyft said it will email drivers every two weeks to show them how many engaged hours they had, and how many they have accumulated in the quarter. DoorDash said it’s working on a system to help couriers track their quarterly hours.
Eligible drivers must submit proof of insurance, so they should enroll in a plan by Jan. 1 to receive a stipend after the first quarter.
Q: What does Prop. 22 change for the companies?
A: The gig companies spent millions of dollars to save many more millions of dollars — what full employee status for gig workers would have cost them. Also importantly, they wanted regulatory certainty. Investors in the two public companies, Uber and Lyft, gave a hearty thumbsup, adding billions to their market values the day after California voters went to the polls.
Q: What do the companies want now?
A: They hope that Prop. 22 will serve as a model nationwide for gig workers to receive some benefits — and more company training — without becoming employees. “We look forward to working with policymakers nationwide to chart a new course for a modern workforce,” Instacart said. Lyft said it hopes to continue negotiating with unions.
Q: What will unions do now?
A: Organized labor raised almost $ 20 million to oppose Prop. 22, but was outspent by 10 to 1. It hasn’t given up. “The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they’re hurt at work,” Art Pulaski, executive secretary treasurer of the California Labor Federation, said in a statement.
His group, which spearheaded the opposition, is considering next steps that could include legal challenges. For instance, the aspect of Prop. 22 that mandates a seveneighths vote of the legislature to amend it also says this superhigh threshold applies to any attempt to organize workers. The unions may challenge this in court, as well as some other provisions.
Q: What’s the status of the AB5 lawsuits against the companies?
A: The big case against Uber and Lyft brought by California’s attorney general and three city attorneys is likely to continue. It would now focus on the companies’ behavior up until Prop. 22 takes effect. A preliminary injunction that would force drivers to become employees is set to take effect in January. The companies are expected to use Prop. 22 to block this. In a case against DoorDash brought by San Francisco’s district attorney, both sides will submit new briefs in December about how Prop. 22 impacts the city’s request for a preliminary injunction. San Diego did not reply to questions about the status of its case against Instacart.
Q: What could happen on a national level?
A: The Democratic presidential ticket of Joe Biden and Kamala Harris opposed Prop. 22. Instead they and many Democratic senators support a bill called the PRO Act that would amend labor laws in a way similar to California’s AB5, making it harder for companies to claim that workers are independent contractors. Under a Biden administration, the National Labor Relations Board would likely be more sympathetic to the stance of unions rather than that of gigwork companies.
Carolyn Said is a San Francisco Chronicle staff writer. Email: csaid@ sfchronicle. com Twitter: @ csaid
on it.
State rules say large theme parks can’t open, even in a limited capacity, until there’s less than one new case per day per 100,000 county residents. The state also requires counties to lower infection rates in their poorest communities to near the average level of the county overall. In Orange County, as in the rest of the state, Latinos have borne the brunt of COVID19 cases and deaths.
Under these requirements, Disneyland and Knott’s Berry Farm, another big county amusement park, will likely remain shut down until next summer or later, said Dr. Clayton Chau, director of the Orange County Health Care Agency.
Orange County supervisors argue that it’s infeasible to quickly address the socioeconomic factors, including poverty and crowded housing, that cause some communities to have higher positive test rates for the coronavirus, and that the whole county shouldn’t be punished because of it.
“If we have disadvantaged communities that are, because ... of living conditions and other circumstances, damaged significantly by the virus, why must we thus visit the pain of the lockdown and shutdown on the children in other communities?” asked Supervisor Donald Wagner — who represents prosperous Anaheim Hills, Irvine and Orange, which have low positivity rates — at a meeting last month.
While the county has invested additional resources to fight COVID19 in Santa Ana and Anaheim, which have majority Latino populations, the best way to help them is to return “some semblance of a normal life” to the entire county, to generate the revenue it needs to help the disadvantaged, Wagner said.
But public health experts say that the key to a strong economy is a healthy population and that the county, Southern California’s most densely populated, isn’t ready for the park to reopen.
“I’m the biggest Disney fan in the whole wide world, and for mental health, I’d love to open up,” said Bernadette BodenAlbala, director of the public health program at UC Irvine. “But we’re going into flu season, and we have not got a hold of this virus.”
“How can you be a strong county when your lowincome neighborhoods are devastated by this pandemic, and are super vulnerable to being victims of another pandemic or another wave?” said Dr. America Bracho, CEO of Latino Health Access, a nonprofit group that has been tapped by the county to lead a health equity initiative targeting
Latinos.
In part, the battle over what the state calls its “health equity metric” reflects the changing politics of Orange County, which encompasses poor, Latino and heavily immigrant communities such as Anaheim, home to Disneyland, as well as tony Newport Beach. Four of the five members of the board of supervisors are Republican. The county as a whole, however, is trending Democratic. It voted for a Democratic president for the first time in 80 years in 2016, and initial results gave former Vice President Joe Biden 54% of this year’s vote. The most Democratic areas of the county tend to be those hit hardest by COVID19.
The Walt Disney Co. is the biggest employer in the county, responsible for 3.6% of all jobs, according to an analysis in 2019 by the Woods Center for Economic Analysis and Forecasting at California State University Fullerton. Disney had about 30,000 of its own employees, and almost 27,000 other jobs in Southern California relied on the resort, according to the report. On Nov. 1, an estimated 10,000
Disneyland resort workers received layoff notice; some had previously been furloughed.
There’s a consensus among local politicians, management, unions and many workers that Disneyland should reopen as soon as possible.
Union reps say Disneyland workers have health concerns but want to return to work, noting that the federal Cares Act’s weekly $ 600 unemployment benefit expired in July.
Disney says it knows how to reopen its parks safely. Since Walt Disney World began gradually reopening in Florida in July, no coronavirus outbreaks have been linked to it, said Orange County, Fla., health department spokesperson Kent Donahue.
Disneyland proposes reopening with a host of safety measures, including mandatory face covers for staff and guests, more handwashing stations, physical barriers, temperature screenings and reduced capacity.
Chau, the Orange County public health leader, wants the state to allow the theme park to open once the county hits the orange tier, the secondbest status among the state’s fourtiered, colorcoded system that tracks counties by case and infection positivity rates. The orange tier allows for an official case rate of up to 3.9 cases per 100,000 people. The county is currently in the red tier, the secondworst, with a rate of six per 100,000 overall and a test positivity rate of 3.6%. In its poorest neighborhoods, the positivity rate is 5.7%, while it is as low as 0.9% in a Laguna Woods ZIP code.
Under the tiered system, which followed a surge in cases and deaths throughout the state in June and July, the state requires counties to achieve lower case and positive test rates and then maintain them for at least two weeks before progressing to the less restrictive tier, which allows businesses greater flexibility to reopen.
Other counties, including Riverside and 12 northern rural counties, also are challenging the stringent tiered system, which has helped tamp down infections but has fatigued residents and stoked fears of widespread business closures.
Orange County supervisors have claimed the system is unscientific.
In a statement, the California Department of Public Health pointed to studies it says underscore the importance of a gradual relaxing of COVID19 lockdowns. It also pointed out that states like New York and Massachusetts also have tiered reopening schedules.
“We’re in the middle of an unprecedented pandemic that we haven’t seen since 1918,” said Dr. George Rutherford, a UCSF professor who has advised the state on its approach. “You’ve got to give the state a little latitude to try to figure out how to best go about this.”
Viral hot spots ripple far beyond their initial boundaries, he said, so a failure to commit to health equity for the poor imperils everyone.
“All of a sudden you’re going to be dealing with a miniWisconsin in downtown Santa Ana, and it’s going to seed the rest of the county, and the rest of Southern California, and the rest of the state.”
Throughout the pandemic, a vocal minority of Orange County residents have protested angrily against mask mandates and business closures. Death threats have been so intense they prompted the county’s top public health official to resign in June.
Yet county health officials have worked hard to help hardhit areas, said Bracho, of Latino Health Access.
She successfully advocated for the county’s coronavirus rates to be broken out by ZIP code in May, and her group was contracted to work with the Latino populations most affected by the virus through testing, education, contact tracing and other services.
Infection rates in Santa Ana and Anaheim, which were approaching 30% in early July, have declined to less than 10% since last August. It’s dramatic progress but not enough to meet the county’s health equity metric.
The case numbers are slowly rising again in Orange County and throughout Southern California, in what public health experts fear could be the start of a third wave of infections.
Chau, who thinks Disneyland can reopen safely, has shown a commitment to health equity, which included the creation of a new director position for population health and equity efforts, Bracho said.
Yet the lack of solidarity among those representing the old and new Orange County has been disheartening, said Dr. José Mayorga, executive director of UCI Family Health Center, which treats primarily lowincome Latinos in Santa Ana and Anaheim.
At work, Mayorga delivers COVID19 diagnoses to patients, who cry at the news and fear they’ve already exposed loved ones to the virus. When he visits mostly white towns like Newport Beach or San Clemente, where he lives and his daughter is in school, many of those he encounters are maskless.
It breaks his heart, Mayorga said. “People act like there’s nothing happening.”
Anna Almendrala is a journalist with Kaiser Health News, which publishes California Healthline, an editorially independent service of the California Health Care Foundation. KHN is not affiliated with Kaiser Permanente. quarter even though the number of new prescriptions is down due to the pandemic, which is still keeping some patients away from the doctor’s office.
Operating income grew nearly 17% for the company’s pharmacy benefit management business but fell on the health insurance side, due partly to pandemicrelated costs.
CVS Health now expects adjusted pershare earnings of between $ 7.35 and $ 7.45. That’s up from a previous forecast for $ 7.14 to $ 7.27 per share.
For the full year, analysts project, on average, earnings of $ 7.23 per share.
CVS Health Corp., based in Woonsocket, R. I., runs one of the nation’s largest drugstore chains with about 9,900 retail locations. In addition to selling insurance, it also runs prescription drug plans for big clients like insurers and employers through the pharmacy benefit management business.
Tom Murphy is an Associated Press writer.