In light of the 2021 Law and Mobility Conference’s focus on equity, the Journal of Law & Mobility Blog will publish a series of blog posts surveying the civil rights issues with connected and autonomous vehicle development in the U.S. This is the fourth and final part of the AV & Civil Rights series. Part 1 focuses on Title VI of the Civil Rights Act. Part 2 focuses on the Americans with Disabilities Act. Part 3 focuses on Title II of the Civil Rights Act.

Your data says a lot about you, and widescale adoption of connected and automated vehicles (AVs) will create mountains of data that says even more. Based on location data alone, AV companies may know where you live, where you work, what you like to do in your free time, who you hang out with, and possibly even your religious and political beliefs. And, again, this is just based on location data; AV companies will also have extensive records of your biometric and financial information. Overall, AVs can provide constant and near-comprehensive surveillance. So what happens when the government gets access to surveillance collected by private companies and relies on it in criminal investigations?

This was the real-life nightmare of Robert Julian-Borchak Williams, a Black man in the Detroit area who was arrested and charged for a crime that he didn’t commit. A facial recognition algorithm employed by the Detroit Police Department matched his face to a surveillance image from a robbery. Williams is known as the first person arrested as the result of a bad algorithm.

As of fall 2020, at least 360 police departments use facial recognition technologies, 24 use automated data analysis tools, and 26 use predictive policing measures, which aim to identify crimes before they happen by relying on historical data (which has been shown to be racially discriminatory and ineffective). Over 1,000 police departments use surveillance drones, which were deployed to track down and arrest Black Lives Matter protestors last summer. If AVs become a part of this network of technologies, this surveillance will become even more invasive, particularly for Black passengers and pedestrians that both police and artificial intelligence tend to manifest bias towards.

This trend of warrantless surveillance is constitutionally dubious. The Fourth Amendment protects U.S. persons from “unreasonable searches and seizures” without a warrant. Courts have considered surveillance to be an “unreasonable search or seizure” if it invades a reasonable expectation of privacy. The scope of Fourth Amendment protections was narrowed in United States v. Miller and Smith v. Maryland, where the Supreme Court held that there is no reasonable expectation of privacy if information is purposefully provided to third parties. In these cases, the Court held that the government could obtain bank records and transactional phone call data without a warrant because that information was consensually relayed to third parties (namely, bank and phone companies). However, this third party doctrine was abrogated in 2015 in United States v. Carpenter, when the Supreme Court held that a warrant was required to collect over four and half months’ worth of cell-site location information (CSLI) for the defendant, a robbery suspect. The Court noted that, if third party doctrine were applied to CSLI, “[o]nly the few without cell phones could escape . . . tireless and absolute surveillance.”

The Carpenter framework could be applied to AVs, based on the potential comprehensiveness of AV surveillance; the intimate information that AV surveillance could reveal; how cheap it would be for the government to rely on AV for both ongoing and retrospective surveillance; and the questionable level of voluntariness through which AV users would “provide” their information to companies. Thus, the application of the Carpenter framework to AV by judges is one way to avoid the incorporation of AVs into the surveillance state. On the legislative side, we could see a comprehensive federal privacy bill soon. However, policing is squarely in the state and local purview, and it is hard to say how much a federal law could reach into these surveillance issues as both a legal and a practical matter.

States like California and Virginia already have comprehensive privacy laws on the books that protect consumers with certain rights, including the right to know what data is being collected about them by large, private companies, and the right to opt out of the sale of personal information by these companies. However, government and nonprofit entities are explicitly exempt from these laws. Moving forward, privacy laws should include protection from government overreach, not just corporate overreach.

AV companies can certainly take action as well. Around the time of the Williams arrest, Amazon, Microsoft, and IBM announced that they would pause or stop offering their facial recognition data to law enforcement. These moves were largely symbolic, as police mostly rely on companies that are not household names for their data. In the AV context, company policies against warrantless surveillance and partnerships with law enforcement could provide users with some peace of mind.

Throughout my Civil Rights Series, I have emphasized the importance of data transparency so that agencies like the Department of Justice’s Civil Rights Division can easily track and investigate discriminatory impacts of AVs. “Transparency,” however, cannot be a mechanism for extending the surveillance state to these vehicles. Our increasingly connected and data-driven transportation systems cannot throw our privacy rights under the (connected and automated) bus.

In light of the 2021 Law and Mobility Conference’s focus on equity, the Journal of Law & Mobility Blog will publish a series of blog posts surveying the civil rights issues with connected and autonomous vehicle development in the U.S. This is the third part of the AV & Civil Rights series. Part 1 focuses on Title VI of the Civil Rights Act. Part 2 focuses on the Americans with Disabilities Act. Part 4 focuses on the Fourth Amendment.

As Bryan Casey discussed in Title 2.0: Discrimination Law in a Data-Driven Society, there are a growing number of studies that indicate racial disparities in wait times, ride cancellation rates, and availability for rideshares and delivery services like Uber, Lyft, and GrubHub. Given that, for the most part, humans are behind the wheel in these cars, these disparities are the aggregate result of both conscious and unconscious biases. Drivers can choose where they pick up passengers, meaning that neighborhoods associated with marginalized demographics have less cars available at any given moment. Drivers may see a passenger’s name and decline that passenger based on assumptions about their race. The passenger rating system is also a challenge. Drivers may—again, consciously or unconsciously—be more judgmental of a black passenger than a white passenger when rating them between 1 and 5 at the end of a ride. Ratings can undermine users’ ability to nab a car quickly and can even get users kicked off of platforms.

As Uber and other companies transition to connected and automated vehicles (AV), they have promoted the artificial intelligence (AI) that these vehicles will rely on as the solution to what they frame as a very human problem of bias. However, as growing numbers of studies are showing, AI can be just as discriminatory as people. After all, people with biases make machines and program algorithms, which in turn learn from people in the world, who also have biases. As the Wall Street Journal recently reported, “AI systems have been shown to be less accurate at identifying the faces of dark-skinned women, to give women lower credit-card limits than their husbands, and to be more likely to incorrectly predict that Black defendants will commit future crimes than whites.” And when AI is discriminatory, this can manifest on a broader scale than when it is just one discriminatory person behind a wheel. Accordingly, switching from human drivers to computer drivers will not end transportation access issues based on racial disparate impact, absent a concerted effort by AV companies, and perhaps by the government, to fight algorithmic discrimination.

Where does the law enter for this type of discrimination? It isn’t clear.

Title II of the Civil Rights Act of 1964 broadly mandates that all people in the U.S., regardless of “race, color, religion, or national origin,” are entitled to “full and equal enjoyment” of places of public accommodation, which are defined as any establishments that affect interstate commerce. Access to transportation undoubtedly affects participation in interstate commerce. And yet, as Casey reported, “[i]t is unclear whether Title II covers conventional cabs, much less emerging algorithmic transportation models,” including rideshare systems that have explicitly resisted categorization as public accommodations. It also remains unclear whether discrimination claims based on statistical evidence of race discrimination are cognizable under Title II, particularly given the judiciary’s increasing reluctance to remedy state and private action with a discriminatory impact, rather than clear evidence of racially discriminatory intent.

Professor Casey advocated updates to Title II as one manner to combat discrimination in rideshares. Particularly, Congress should clarify that the statute cognizes statistically based claims and that it covers “data-driven” transportation models. This is not unheard of; the Fair Housing Act covers disparate impact. Since we published Title 2.0, there have not been any litigation or policy updates in this area.

Accordingly, it will likely be up to AV companies themselves to ensure that people are not denied the benefit of access to AV on the basis of their race (or gender, socioeconomic status, or disability, for that matter) because of discriminatory algorithms. Experts have suggested reforms including frequent inventories of discriminatory impact of AI, adjusting data sets to better represent marginalized groups, reworking data to account for discriminatory impacts, and, if none of these steps work, adjusting results to affirmatively represent more groups. At a minimum, transparency is key for both the government and concerned individuals to assess whether AV has a discriminatory impact, and any data or findings should be widely published and shared by these companies.

Despite the downfalls of today’s rideshares discussed above, black users have still praised this technology as easier than hailing a cab on the street. In that way, AVs still have the opportunity to be another step towards transportation equity.

The 2021 Law and Mobility Conference opened with a panel, moderated by Emily Frascaroli, that set out to begin answering three questions: What are emerging transportation technologies? What is the legal landscape surrounding these technologies? What are some challenges that these technologies face, in terms of both gaining popular use and promoting transportation equity?

Nira Pandya presented on the legal landscape of connected and automated vehicles (AV). The current legal landscape of AV falls into three buckets: federal law, nonbinding federal agency guidance, and state law. On the federal level, there is no comprehensive federal AV legislation. On the regulatory side, the Department of Transportation has promulgated nonbinding regulatory guidance to encourage collaboration, transparency, and integration of AVs into existing transportation systems, but there are no binding regulations on any aspect of AVs. Meanwhile, at least 29 states and D.C. have enacted AV-related legislation or executive orders, creating a varying and uncertain landscape for AVs throughout the U.S. Moving forward, the Biden administration seems generally committed to the development of innovative transportation technology and has appointed leaders whose backgrounds align well with this goal.

Jennifer A. Dukarski presented on data, a key driver of mobility. Data is already ubiquitous in our transportation technology, from conventional vehicles’ navigation and diagnostic systems to the account and payment systems for scooter shares. Data will only become more frequently and invasively collected as our transportation system becomes more connected and automated. Yet the U.S. lacks comprehensive federal legislation for data privacy, all the while there is a dearth of regulations and legislation at both the state and federal levels that restrict how transportation companies can use our data. States such as California have developed broad, cross-cutting data privacy laws, and leaders in the field speculate that federal data privacy legislation could be introduced as soon as this fall.

Bryant Walker Smith discussed how emerging transportation must focus on both technology and the law being means to serve social needs such as increased transportation safety and equity, rather than ends in themselves. He outlined the safe systems approach, which focuses on both the vehicle and infrastructure aspects of transportation being designed to maximize social goals, such as safety, through design and policy.

A contentious issue with emerging transportation that the panelists highlighted was the reality that the companies creating transportation technology will, for better or worse, be driving the regulation of this technology. In this vein, one of the challenges of promoting transportation equity through policy or otherwise is weighing just how much pressure to put on AV companies to solve social injustices. Are we striving for equity in AV because it is better than striving for equity in more traditional modes of transportation, or are we doing this just because it is more convenient than dismantling the inequities built into our current transportation system? Given that transportation inequity is tied to a variety of broad and overlapping historical policies – housing, insurance, and urban development, to name a few – how much pressure can we really place on an AV or scooter company to resolve these social problems?

Finally, in describing the challenges to widespread adoption of emerging transportation technology, the panelists converged on the importance of transparency and uniformity.  For transportation systems like AV to work, the technology needs to be seamless, which will be challenging in the absence of a comprehensive federal framework. Promoting transparency from AV manufacturers about safety, data, and equity issues will be essential in developing consumer trust. This trust will then serve two purposes: getting more people on board with using these technologies and getting more people to advocate for their elected officials to pass good policies regulating these technologies.

The panel wrapped up with brief discussions of a National Highway Traffic Safety Administration (NHTSA) advanced notice of proposed rulemaking on a “Framework for Automated Driving System Safety” – which has had its comment period extended to April 1 – and of spectrum issues with connected vehicles.

In light of the 2021 Law and Mobility Conference’s focus on equity, the Journal of Law & Mobility Blog will publish a series of blog posts surveying the civil rights issues with connected and autonomous vehicle development in the U.S. This is the second part of the AV & Civil Rights series. Part 1 focuses on Title VI of the Civil Rights Act. Part 3 focuses on Title II of the Civil Rights Act. Part 4 focuses on the Fourth Amendment.

Leaders in the autonomous vehicle (AV) industry have promoted AVs as the gateway to transportation equity by providing people who are unable to drive due to age or disability with the freedoms of a car. Nearly every AV company is already experimenting with accessibility features. Waymo and Cruise are trying out braille and other features to assist blind users. Nissan has virtual reality avatars that may provide comfort and assistance to passengers with disabilities. May Mobility’s shuttle deploys a wheelchair ramp. However, federal law has mandated that transportation be accessible to everyone for over three decades, and this goal is still far from being realized. Can AVs really be different?

A 2017 survey by the Department of Transportation found that an estimated 25.5 million people in the U.S. have disabilities that make traveling outside of the home challenging. Further, more than 3.5 million Americans with travel-limiting disabilities are unable to leave their homes at all. As our population continues to age, these numbers will only increase. This lack of access to transportation has devastating impacts. Disabled people experience depression at a rate four times higher than the U.S. population as a whole, undoubtedly due in part to isolation. From an economic standpoint, mitigating transportation obstacles for disabled people would create employment opportunities for 2 million people with disabilities and save $19 billion annually from missed medical appointments.

Per federal law, transportation is not supposed to be this inaccessible. The Americans with Disabilities Act (ADA) broadly mandates that both government and privately owned public transportation be accessible to people with disabilities. On the ground, inaccessibility has persisted, due in part to massive loopholes in the statute. The ADA does not apply to rail transit systems constructed prior to 1990, meaning that improved accessibility has been largely voluntary, and inadequate, for systems such as the New York subway. The ADA both mandates that buses have accessibility features and requires paratransit services to be available wherever there are fixed-route buses, but where inaccessible bus stops require door-to-door services. However, these services require reservation up to 48 hours in advance, and they are up to ten times more expensive per trip than fixed-route bus fare.

The ADA gets even messier for privately owned auto transportation systems. The statute does not require taxi services to purchase accessible vehicles, which makes hailing an accessible cab nearly impossible in many parts of the U.S. Ride shares have even further complicated this murky scheme. It also remains unclear whether the ADA covers ridesharing platforms at all, although a recent lawsuit against Uber may finally force a court to answer this question.

Regardless of whether the ADA will reach AV fleets, widespread mobility issues for Americans with disabilities in our current transportation system means that the statute will not do nearly enough on its own to promote accessibility for all. Even the experimentation with accessibility features that I detailed earlier will not be enough. AV will not be fully accessible unless it is uniformly accessible, and disability rights advocates are already worried that AV companies are striving for specialization at the expense of similar or identical accessibility features across all fleets.

The best way to ensure uniform accessibility for emerging transportation would probably be through sweeping federal legislation. This seems unlikely to happen any time soon, and in the meantime uniform accessibility will be left to AV companies themselves. AV companies have the opportunity to make AV transportation radically accessible from the start by accounting for mobility, visual, auditory, memory, and intellectual impairments in their design across competing fleets and geographic regions. This is the only way to ensure that the next transportation revolution does not leave our most vulnerable community members behind.

In light of the 2021 Law and Mobility Conference’s focus on equity, the Journal of Law & Mobility Blog will publish a series of blog posts surveying the civil rights issues with connected and autonomous vehicle development in the U.S. This is the first part of the AV & Civil Rights series. Part 2 focuses on the Americans with Disabilities Act. Part 3 focuses on Title II of the Civil Rights Act. Part 4 focuses on the Fourth Amendment.

Road planning has never been value-neutral. From Detroit’s 8 Mile Road to West Baltimore’s “road to nowhere,” infrastructure has been used both intentionally and unintentionally to further marginalize communities of color, and particularly Black communities. As the Biden administration hopes to move forward with sizable infrastructure investments, including potential investment in infrastructure for autonomous vehicles (AV), proposals to build new roads and refurbish existing ones will arise. Both federal and local policymakers must avoid repeating racist automotive infrastructure decisions of the past.

Both before and after the civil rights movement, one of the mechanisms through which segregation and white supremacy were, and continue to be, perpetuated is through urban planning. Federally backed mortgages and other services were unavailable in communities that were evaluated as “insecure” during the early and mid-20th century, meaning that these redlined areas were left blighted as developers looked to development in wealthier, whiter neighborhoods and suburbs. The advent of urban sprawl focused federal transportation infrastructure resources to expressways designed to decrease congestion for suburban commuters to city centers, which often meant that these roads were built right through formerly thriving black neighborhoods, displacing homes and businesses and forcing those who remained to deal with increased pollution and noise. Even public transportation became increasingly geared toward the comfort of white, suburban riders instead of the working class people of color that tend to depend on it. Take the express train, literally designed to skip through entire city neighborhoods and block access for local riders.  

Some environmental and racial justice advocates have turned to civil rights law to attempt to right some of these wrongs. Title VI of the Civil Rights Act of 1964 prohibits discrimination on the basis of race, color, and national origin in programs receiving federal financial assistance, which constitute the majority of infrastructure projects. The statute allows affected communities to file both federal lawsuits and administrative complaints, which equip federal agencies like the Department of Transportation to initiate fund termination proceedings or refer matters to the Department of Justice for other legal action.  However, in Alexander v. Sandoval, the Supreme Court dealt a devastating blow to Title VI by interpreting the statute to require discriminatory intent, rather than discriminatory impact alone, to prove discrimination. Essentially, the holding in Alexander v. Sandoval has eliminated the private cause of action for discriminatory infrastructure and left enforcement up to federal agencies.

On the administrative side, the Biden administration has provided a glimmer of hope for the utility of Title VI. The Federal Highway Administration recently asked Texas’ transportation department to halt construction on an I-45 expansion project after community members filed a Title VI complaint citing concerns about pollution and displacement. The project would impact Harris County, Texas, which has large Black and Latinx populations. Time will tell whether the pause and investigation will yield the result that the community members sought in this complaint, and whether it will serve as precedent for similar actions.

Overall, while impacted communities may use Title VI to stall projects, the best way to ensure that any future infrastructure that facilitates the AV revolution does not violate civil rights is to ensure equitable access to construction decision-making and emerging transportation itself. AV developers cannot tout equity while failing to acknowledge that infrastructure built for cars has had a devastating impact, which may continue without road planning that moves marginalized voices to the center.

The first week and a half of the Biden administration has seen a flurry of activity: thirty executive orders and actions were taken in the first three days alone, with new announcements every day this week as well. Three of the earliest orders touched transportation and energy issues: an order promoting COVID-19 safety in domestic and international travel, an order to rejoin the Paris Climate Agreement, and an order that will block a permit for the Keystone XL pipeline and direct agencies to review more than 100 Trump executive actions on the environment.

Biden has nominated for Transportation Secretary Pete Buttigieg, who emphasized infrastructure in his campaign for the Democratic candidacy and touted a $21 million investment in “Smart Streets” to revitalize downtown South Bend as the city’s mayor. Biden has nominated as Secretary of Energy Jennifer Granholm, who, since serving as Michigan’s governor, has maintained a focus on renewable energy development, and, particularly, the electrification of American cars.

Among Biden’s most expensive proposals is his sweeping $1.7 trillion plan to tackle climate change. Biden’s executive orders on climate and the environment will freeze new oil and gas leases on federal lands; conserve at least 30% of federal lands and oceans by 2030; double wind energy production by 2030; and establish an interagency climate task force; all with a goal of achieving net-zero carbon emissions by 2050.

With climate, infrastructure, and clean energy jobs as guiding focuses, here is a preliminary view of the transportation policies that we can expect from the Biden Administration:

Electric Vehicles and Fuel Efficiency

Biden’s “Plan for a Clean Energy Revolution” includes a $400 billion investment in clean energy and innovation. A significant part of this plan is working toward the widespread use of electric vehicles.

Automakers expect a push for a new agreement to raise average fuel economy standards across fleets, which will require them to sell more electric vehicles. Under Trump’s standards, they would have had to show 1.5% fleetwide fuel economy increases from 2022-2025, which had been lowered from the 4.7% standard of the Obama Administration. There are currently around twenty fully electric vehicles for sale in the US, with many more expected to pop up in the next few years, including electric pickup truck models from GM, Ford, and Fiat Chrysler. Ford has pledged $11 billion to introduce a variety of new EVs, while GM has committed $27 billion to electric powertrains, vehicles, and autonomous systems through 2025.

On the manufacturing side, Biden hopes to make the U.S. a leader in electric vehicle production, with a goal of creating 1 million new jobs in the auto sector. On the consumer side, he has floated plans to offer rebates for consumers to replace conventional cars with electric vehicles. He has pledged to add 550,000 charging stations across the US.

Biden also plans to electrify the government fleet. In 2019 there were 645,000 civilian, military, and post office vehicles in the federal government’s fleet. Fulfilling this goal will create jobs in the industry, accomplish net-zero transportation-related carbon emissions for the federal government, and provide long-needed updates for postal workers. In anticipation of this plan, part of GM’s electric and autonomous vehicle investment will be in its defense unit, which relaunched in 2017.

Infrastructure

For decades, infrastructure development and maintenance has been synonymous with road funding. Attempting to break away from this pattern, Biden’s $2 trillion “Build Back Better” plan includes development goals for transit and power; upgrading and weatherizing buildings; constructing sustainable homes; innovating clean energy technology; streamlining agriculture; and expanding internet access.

Nicknamed “Amtrak Joe,” Biden’s infrastructure plan includes “sparking the second great railroad revolution.” He plans to work with Amtrak and private freight companies to electrify their fleets. Biden is also aiming to invest in quality public transportation in the roughly 315 American municipalities with populations of more than 100,000 by 2030.

Biden’s plan to expand broadband internet or wireless broadband via 5G also targets transportation and climate change by supporting a transition to remote work.  

An advisor to Biden recently announced that the Administration believes an infrastructure bill of up to $2 trillion is possible within Biden’s first 100 days. Absent legislation, the administration can still shape approximately $1 billion in Department of Transportation grants to promote this agenda; the Trump administration focused on road projects encouraging car travel with these grants.

Autonomous Vehicles

The Trump administration took a purposefully hands-off approach to regulating autonomous vehicles (AV). The National Highway Transportation Administration (NHTSA) promulgated voluntary guidance, which contained twelve safety elements for testing. Of the 66 companies with permits to test these vehicles in California, only 32 submitted these self-assessment reports, and not all of those were rigorous.

While there is not an explicit Biden plan on autonomous vehicles, Buttigieg’s infrastructure plan during his run included reassembling the Advisory Committee on Automation in Transportation, which Trump secretary Elaine Chao had disbanded, and proposing that NHTSA take on a strong federal role for the regulation and oversight of AV safety. A request for comments on AV safety in the waning days of the Trump Administration could be a jumping-off point for these plans.

Granholm has expressed concerns about the labor implications of AV, which could also shape the Biden Administration’s AV policies.

Micromobility

When campaigning, Biden promised to help cities “invest in infrastructure for pedestrians, cyclists, and riders of e-scooters and other micromobility vehicles.” The Biden Administration may therefore account for micromobility as part of is transportation and infrastructure policies.

One development in Congress in this area is the bipartisan Bicycle Commuter Act of 2021, which was recently introduced into the House. The Act would bring back and strengthen an expired pre-tax benefit program for bike commuters, increasing the benefit and ensuring that cyclists could be eligible for other transit coverage. This could be a starting point on micromobility.

Environmental Justice

The early actions of the Biden Administration demonstrate a focus on environmental justice unparalleled by any previous president. On Wednesday it was reported that Biden will sign an executive order establishing an interagency council on environmental justice, an office of health and climate equity in the Department of Health and Human Services, and an office of environmental justice at the Department of Justice. These orders will double down on the promises of a Clinton executive order to ensure that environmental justice considerations are a part of all federal projects. Biden’s clean energy plan includes a goal to support the health and wellbeing of those who have been impacted by fossil fuels, including advocating for new jobs in renewable energy in oil and gas towns. Biden’s infrastructure plan includes a goal of “disadvantaged communities” receiving 40% of the benefits of government spending on energy efficiency.

Accordingly, any of the Biden Administration’s transportation policies may need to account for disproportionate impacts on marginalized communities in the U.S.

Overall, achieving low carbon emissions, investing in sustainable infrastructure, and promoting environmental justice will be the central concerns of the Biden administration that will drive its transportation policy. While there is little in the way of specific policy on AV and micromobility, we are likely to see increased research and regulation in these and other emerging transportation areas.

In the midst of a tumultuous election week, app-based driving platforms Lyft and Uber are celebrating a victory in California. Voters there passed Prop 22, which classifies app-based drivers as independent contractors for employment and tax purposes. The initiative carves out an exception to Assembly Bill 5 (AB5), which had classified these drivers as employees. The initiative passed by a significant margin, with 58.4% of Californians voting yes and 41.6% voting no as of this writing. Prop 22 will have significant implications for the rights of a growing number of workers who rely on these apps for both part-time and full-time employment, as well as for policy mobilization opportunities for tech companies.

The Path to Prop 22

Over a third of American adults participate in some sort of gig work, including millions who drive for Uber or Lyft, or both. The labor rights implications for the gig economy have been a concern from the outset, and have become increasingly prescient as the popularity of working for these companies has grown. Particularly relevant in the midst of the COVID-19 pandemic, independent contractors typically do not qualify for unemployment insurance, paid time off, or employer-based health benefits.

In the fall of 2019, California’s state legislature took on the gig economy by passing AB5. AB5 codified and expanded a California Supreme Court decision that held that the vast majority of the workforce is comprised of employees, not independent contractors, and that the burden is on the employer to prove that employees are independent contractors by applying a three-part legal test. “Factor 2” of this test provides that independent contractors perform service “outside the usual course” of business for the employer. This is where gig companies struggle to maintain workers’ independent contractor status.

AB5 was immediately controversial, as reflected by the variety of carveouts included both in the Bill and a subsequent amending bill, AB2257, which exempted nearly 100 types of businesses and workers from the law prior to Prop 22. Companies like Lyft, Uber, and DoorDash remained non-exempt, leading to legal battles. Uber and Lyft even threatened to cease operations in California as a result of the enforcement of AB5, as we have recently discussed.

Enter Prop 22. The ballot initiative classifies app-based drivers as independent contractors, not employees or agents, when certain conditions are met that resemble the policies of Uber and Lyft: no set work hours, no required assignments, no restrictions on working for other app-based driving companies, and no restrictions on having other employment. The initiative requires the approval of seven eighths of the California legislature to amend the policies in Prop 22, meaning that this scheme—designed by ride-share companies, for ride-share companies—could, essentially, be permanently entrenched.

Prop 22 also guarantees benefits to certain drivers across ride-sharing platforms: a wage equivalent of 120% of California’s minimum wage and a healthcare subsidy. The health benefit, however, only applies to drivers who work 25 or more hours per week, measured in “engaged time” spent picking up and transporting passengers. Many drivers spend more than one third of their shift waiting for passengers, meaning that, to reap these healthcare benefits, drivers need to work nearly 40 hours per week. The wage benefit also only applies to engaged time. One study estimates that, accounting for waiting time and costs, the minimum wage for app-based drivers under Prop 22 will be closer to $5.64 per hour, well below California’s minimum wage.

Lyft and Uber poured over $200 million into the “Yes on Prop 22” campaign, making it the most expensive ballot initiative in California’s history. The companies have also spurred controversy for using their apps to urge their armies of drivers and riders to support the initiative. While a smattering of unions and labor organizers pushed back against Prop 22, there was no comparable cash flow or targeted mobilization on the other side: opponents raised only $20 million.

What does Prop 22 mean for emerging transportation?

California has always been a trendsetter in the transportation industry. There are more registered vehicles in California than in any other individual state, and two of Uber’s largest markets are in San Francisco and Los Angeles. Unsurprisingly, this victory in California has led to reports that Lyft and Uber are already looking to pass similar laws in other states.

The success of Prop 22 will, at the very least, send a signal to other jurisdictions that passing laws similar to AB5 will lead to a concerted backlash. New Jersey, Massachusetts, New York, and Illinois are among states that have considered legislation that would classify many independent contractors as employees. Even prior to Prop 22, the tumultuous path of AB5 demonstrated the tricky business of using a one-size-fits-all approach to regulating labor and employment in the gig economy, which encompasses a broad swath of fields and income levels. The fact that millions of California voters were mobilized in support of this initiative sends an even stronger signal.

Perhaps an even more fascinating (and jarring) element of the Prop 22 story is the corporatization of California’s ballot initiative process, which allows companies to skirt around legislators, regulators, and courts to implement laws useful to their margins. California’s ballot initiative process is one of the most relaxed in the nation, which various corporations used this election cycle to promote multimillion dollar campaigns directly to voters. It is clear that Uber and Lyft, which have experienced steep drops in revenue throughout 2020, will spare no expense in fighting laws meant to guarantee employment benefits to their drivers. To illustrate, advertisements funded by Lyft framed Prop 22 as a worker’s rights bill, highlighting the benefits that are secured by Prop 22 (without mentioning hour requirements, of course) and claiming that maintaining the status quo of AB5 would end ride share services in California as they exist today (which would only happen if Lyft decided not to pay up to comply with the law).

Even the CEO of Uber has expressed that ride-sharing apps are failing their drivers, advocating for creative policy solutions to give these workers flexible benefits. This is not what Prop 22 does, instead shutting down policymaking and entrenching a path that will allow Uber and Lyft to, essentially, continue operating the way that they always have. It will be interesting to see whether, and how, this model of mobilization will be transferred to other transportation issues.