Uber, Lyft's ballot measure campaign gets nonprofit status for mailers, opponents cry foul

As the Proposition 22 battle heats up in California, opponents of the initiative say the campaign saved $1.5 million in postage using nonprofit status.

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
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Uber and Lyft have poured millions of dollars into their ballot measure campaign in California to keep drivers classified as independent contractors.

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Opponents of Proposition 22, a ballot measure sponsored by Uber, Lyft and other gig economy companies in California, have filed a complaint with the United States Postal Service against the campaign for using nonprofit status to send out political mailers. They estimate the Yes on Proposition 22 campaign has saved at least $1.5 million by using the nonprofit postage rate for mailings, rather than using the normal bulk rate.

A spokesman for the Yes campaign said it's been granted nonprofit status by the IRS and USPS and that it's common practice for campaign committees working on ballot measures to form themselves as nonprofits.

"Yes on 22 is eligible for the appropriate nonprofit postage rates with the USPS, which we applied for and were granted by the US Postmaster," a Yes campaign spokesman said in an email. "The USPS has a long-term policy in place of allowing the ballot measure committee of a duly authorized nonprofit to mail under the nonprofit's authorization."

The complaint comes during a heated battle over Proposition 22, which is sponsored by Uber, Lyft, DoorDash, Instacart and Postmates and aims to exempt the companies from classifying their workers as employees. The five companies have contributed nearly $200 million to the ballot measure campaign, making it the most expensive in California history.

Opponents to the ballot measure say that with such large sums of money being spent, the gig economy companies shouldn't be getting a discount on USPS postage. 

"It's outrageous but not surprising that the app companies that are going to the mat to keep shortchanging workers would shamelessly rip off the postal service," Mike Roth, campaign spokesperson for the No on Proposition 22 campaign, said in a statement. "This is just more evidence of the kind of greed we are dealing with from these companies."

In the complaint letter to the USPS, a lawyer for the No on Proposition 22 campaign alleged the Yes campaign was "unlawfully" issued a nonprofit permit. Under federal law, nonprofit permits are granted to "qualified political committees," but the No campaign alleges that doesn't apply to the Yes campaign since it's not a committee of a political party.

Deep dive: Inside Uber and Lyft's fight over gig worker status

"Yes on 22 is a registered California political committee, but it is not a political party committee," reads the complaint. "Because large amounts of mail are being sent out daily in violation of the Federal Statue, we request that you act immediately to revoke this permit."

Mailers for other ballot measure campaigns in California, such as Proposition 15 and Proposition 23, have been using standard bulk rate postage.

The USPS didn't immediately return a request for comment. 

Uber, Lyft and Postmates didn't return requests for comment. DoorDash and Instacart referred CNET to the Yes on Proposition 22 campaign.