In less than a week, we will conclude an election during one of the most trying times in our nation’s history. Whether the final election results will be clear in less than a week is one of many unknowns surrounding this election. Transportation-wise, the results of multiple races could have major impacts on the future of ride-sharing, transit-funding, and infrastructure. Here are four key transportation matters to watch on November 3, 2020.
The Presidential Race: Democratic candidate Joe Biden has been a frequent rail transportation user, and is a proponent of public transportation and promoting non-fuel-burning vehicles. This is evidenced by the platform he proposed at the Democratic National Convention, which included $1.3 trillion over 10 years for highways, transitioning to low- and no-carbon vehicles, rail, transit and regional planning, aviation and freight. Specifically, Biden is championing zero-emissions public transportation (rail and/or buses) for every American city with 100,000 or more residents. Such a promise would bode well for transit agencies across the U.S.
While we have not yet seen details from President Trump on his transportation plan, this is amplifying the nervousness many transit systems are already feeling because of the significant drop in ridership and revenue resulting from the Covid-19 pandemic. Transportation experts believe public transportation funding has become increasingly political, noting that Republican administrations have tended to favor highways and Democratic administrations have more favored mass transit.
The Senate and Congressional Races: Whoever wins the Presidency will get more of his priorities approved by Congress if his respective parties control the Senate and the House. If the Democrats or the Republicans win the trifecta of the Executive, Senate, and the House, they will have at least two years to approve presidential priorities, including transportation and measures related to climate change. If, there is any split of control, getting everything a particular leader wants to pass will be difficult. Although, both parties are promoting infrastructure investments that would inevitably lead to some transportation-related improvements.
Proposition 22 and the Fate of Ride-Sharing in California: On January 1, 2020, California’s Assembly Bill 5 (AB5) went into effect. AB5 was the landmark bill that technically made a million ride-hailing workers, on-demand delivery drivers, and others in California eligible for the same minimum wage, benefits, and vacation days to which full-time employees are entitled.
The financial impacts of such reclassification are significant. The related costs of a driver now being classified as an independent contractor are expected to rise by at least 30% once classified as an employee. Ride-sharing companies have tried using the courts to battle against the reclassification of its drivers. Unfortunately for them, they have failed so far, with a California appeals court last week unanimously ruling that ride-hailing companies must reclassify their drivers in California as employees.
So, no one should be surprised that the companies have used California’s infamous voter initiative process to ask voters to weigh in on the future of their business in Proposition 22. A “yes” vote would define app-based transportation (i.e., rideshare) and delivery drivers as independent contractors and adopt labor and wage policies specific to app-based drivers and companies. Over $200 million has been spent, mostly by ridesharing companies, on Proposition 22 advertising and lobbying. The future of the gig-economy in California is weighing in the balance.
Various California Ballot Measures: Several dozen measures in various California counties and cities are asking voters to raise sales and other taxes for various purposes, including for the repair and expansion of existing streets and infrastructure. The timing of this request is tricky because while most Californians frequently complain of the pock-marked roads and other crumbling infrastructure, the state’s residents are also complaining of being over-taxed. This is especially true after the 2017 Tax Cut and Jobs Act infamously capped the federal deduction for state and local taxes at $10,000. This cap hurts the ability of state and local governments to raise taxes in high-tax states like California because residents are limited to a $10,000 write-off on their property and other local taxes. Because of this cap and the other hits Covid-19 has made to most people’s wallets, voting yes to higher taxes may be difficult for many California voters.
As has been stated many times previously, there is no crystal ball that could have predicted what the world would look like today. There is also no crystal ball that can predict what our world will look like in the next six, 12, or 18 months. However, after knowing the results of election day, the picture for transportation in our country may become clearer.