California backs Prop 22: Great news for Uber, Lyft as their drivers can work as indie contractors
Californians have overturned lawmakers in two critical ballot measures covering the gig economy and online privacy, with broader implications for the whole country.
Proposition 22 passed with 58 per cent of the vote (with 83 per cent of votes counted) and will exempt app-based drivers from legislation that required companies like Uber and Lyft to treat their drivers as employees rather than independent contractors.
That legislation – AB5 – came into effect in January and required gig economy companies to provide drivers with a range of benefits including health insurance and paid time off in the US state. It was a landmark piece of legislation that was vigorously fought by those companies and was upheld repeatedly in the courts.
Those same companies – notably Uber and Lyft – put Proposition 22 on the ballot and spent an extraordinary $200m in a campaign to get voters to back it, claiming, somewhat misleadingly, that they would have to shut down their businesses because of the additional costs of AB5.
There was a $20m counter-campaign funded by labor unions – who planned to get those same drivers to unionize – but the slick and well financed Uber/Lyft effort had the desired effect and a majority of voters passed the measure. Uber’s share price went up 12 per cent on Wednesday; Lyft’s by 8 per cent. Money well spent.
The decision is likely to have a big impact across the United States, with many states looking at California – where most of the gig economy companies are based – to decide how to approach the issue in their own jurisdictions. Uber, Lyft, Doordash and other companies are certain to rollout similar campaigns wherever state legislatures consider forcing them to recognize drivers as employees.
https://www.theregister.com/2020/11/04/california_election_propositions/
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