California’s Proposition 22 and the Benefits of the Gig Economy

The following is a statement from Steve Pociask, President and CEO of the American Consumer Institute:

“California’s Proposition 22 is pro-consumer. The proposition seeks to turn back recent regulations that are stifling the gig economy and freelance employment. The gig economy has opened up opportunities both for those looking for flexible work opportunities and for people who benefit from the services provided.

Consumers depend on reliable transportation and on food delivery apps, more so during the COVID crisis than ever. These services have become a vital part of life for busy Americans across the country—everyone from busy parents adapting to the new normal to seniors who are worried about their health amidst the pandemic.

Most importantly, it saves consumers time and money.

Adding costs to the industry, as the current regulations do, will not benefit competition, boost product innovation, or increase investment. Moreover, these added costs will flow through to consumers in the form of higher prices, thereby reducing consumer benefits. In short, consumers are harmed by these regulations.

Reclassifying drivers as employees would eliminate significant income opportunities, and ultimately reduce options for people counting on these services. It could mean longer wait times for your family’s dinner to be delivered, significantly higher consumer prices, and likely a shutdown of services in many areas.

It is neither in the best interest of drivers nor American consumers to reclassify gig workers as employees. We strongly oppose the anti-consumer regulations that were previously enacted in California and, based on our analysis, find that Proposition 22 would increase consumer benefits.”

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