By Jasen Edwards
How many politicians does it take to change a light bulb?
Two, one to change it and another one to change it back again!
Don’t worry, this isn’t a post about presidential politics. But it is political because I want to talk to you about Proposition 22 that recently passed in California. This categorizes rideshare and delivery drivers as independent contractors, but it also gives us as real estate agents and brokers the chance to think about the role of our professional associations.
My first job in real estate was at the Texas Association of REALTORS® when I was a senior in high school. One of the most important duties of my job was processing membership dues and helping collect bills that were unpaid.
It was easy to collect unpaid dues because membership rules stated, as they still do, that if your broker is a member of the association, all agents sponsored by that broker also have to be members. All I had to send was one letter to the broker reminding her that if the bills weren’t paid, her membership, and thus, MLS access, would be terminated.
When I turned 18, I earned my real estate license and started to pay dues myself. Technically, it was my choice to join the association, but if I wanted to participate in the MLS, membership was required, so it wasn’t really a choice. Further, I couldn’t just join the local board; I had to join the local, state, and national associations simultaneously under our system. I accepted it.
But as time went on, I began to hear more agents questioning what the association did for them and why they had to be members at all. In my opinion, because of its own growth, the real estate associations had to learn how to communicate its value to new generations of members who instinctively question everything.
I think our REALTOR® associations have done a reasonable job showing that value and staying relevant, but frankly, when the economy is as good as it’s been the last decade, agents just don’t have time to question the system. There’s too much money to be made. So for now, everything seems stable—but that’s why California Proposition 22 got my attention.
Last year, California passed a law that would require rideshare companies to classify drivers as employees. Like most REALTORS®, those drivers have been independent contractors, which is one of the reasons rideshare companies grew as fast as they did. This draws a sharp contrast between their way of business and traditional cab companies that operated with employees and unions.
I think rideshare companies exposed the general public’s lack of understanding of what it means to be an independent contractor, including why someone would choose that professional lifestyle.
Anway, the California law was put on hold by a court, and Proposition 22 went on the ballot. Its passage settles the issue; drivers will remain independent contractors. But it also enacted new labor and wage policies that require the rideshare companies to provide some employee-style benefits, such as health care subsidies for drivers who log a certain number of hours. It also prevents drivers from working longer than 12-hour shifts.
It’s reported that more than $500 million was spent to persuade voters on just this one proposition, with $200 million of that is coming from rideshare companies themselves.
This got me thinking about what it would feel like if voters were to decide whether real estate professionals would have to become employees? What if half-billion dollars were spent to influence the vote?
In this context, I’m grateful for those who came before us and set up our REALTOR® association system. While it’s not perfect, it unites us and allows us to get involved, advocate for our industry, and protect our independent contractor status. We are able to operate as entrepreneurs and build our own versions of a top producer life.
I didn’t start this post with the intent to create an advertisement for REALTOR® associations, but Proposition 22 in California gave us a chance to take a fresh look at how we should work continue to stay in control of our own industry. After all, there are other parts of the real estate business that some want to see changed. NAR is dealing with a class-action lawsuit that challenges not just buyer agent commissions but the entire cooperative nature of the MLS system. Can you imagine if that was settled by a ballot proposition?
So, what do you think? Sound off in the comments, then make sure you get involved in your local REALTOR® association to help protect our industry.
Jasen Edwards is a sought-after sales expert, performance coach, and motivational speaker with more than 25 years of real estate experience. In his production heyday, he was the youngest person ever listed on the Austin Business Journal’s Top 50 agents list and was featured on the cover of REALTOR® Magazine as a member of the 30 Under 30 class of 2002. Jasen’s first book, The Top Producer Life: How To Build The Real Estate Career Of Your Dreams In Any Economy, will be published in December 2020.