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[President-elect Joe Biden’s victory prompts spontaneous celebrations.] OAKLAND, Calif. — Drivers and other workers for so-called gig economy companies in California will not become their employees. California voters carried Uber and Lyft to victory, overwhelmingly approving Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors. Uber, Lyft […]
[President-elect Joe Biden’s victory prompts spontaneous celebrations.]
OAKLAND, Calif. — Drivers and other workers for so-called gig economy companies in California will not become their employees.
California voters carried Uber and Lyft to victory, overwhelmingly approving Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors.
Uber, Lyft and the delivery service DoorDash designed the measure to exempt the companies from a state labor law that would have forced them to employ drivers and pay for health care, unemployment insurance and other benefits. As a concession to labor advocates, the initiative offers a wage floor and limited benefits to drivers.
The Associated Press projected early Wednesday that Prop. 22 had carried 58 percent of the vote. Prop. 22 faced the strongest opposition in San Francisco, where Uber and Lyft have their headquarters, with more than a 19-point deficit.
The vote resolves the fiercest regulatory battle that Uber and Lyft have faced and opens a path for the companies to remake labor laws throughout the country. The fight pit labor groups and state lawmakers against ride-hailing and delivery start-ups that spent $200 million in support of the measure.
In voting to support Uber and Lyft, Californians rejected the principles outlined in a 2018 State Supreme Court ruling and enshrined in a 2019 state law that said workers who performed tasks within a company’s regular business — and were controlled by the company and did not operate their own firms — must be treated as employees. Under Prop. 22, gig workers are exempted from these rules and can continue to work independently.
The Yes on Prop. 22 campaign, backed by Uber, Lyft and DoorDash, celebrated the victory. “California has spoken,” Geoff Vetter, a spokesman for the campaign, said in a news release. “Prop. 22 represents the future of work in an increasingly technologically-driven economy.” On Wednesday morning, executives at Lyft and DoorDash praised the outcome.
Uber’s stock price climbed more than 14 percent on Wednesday, and Lyft’s was up more than 11 percent at the close of trading.
Uber’s chief executive, Dara Khosrowshahi, thanked drivers for the win in a late-night email. “The future of independent work is more secure because so many drivers like you spoke up,” he wrote. He said Uber would make the new benefits promised by Prop. 22 available “as soon as possible.”
“The last 14 months in California have been the most critical point on this issue,” said Bradley Tusk, a venture capitalist who advised Uber on political issues during its early years. Emboldened by the election, Uber and other gig economy players are likely to pursue federal legislation to enshrine gig work in the nation’s labor laws.
The passage of Prop. 22 is a bitter loss for state and local officials who have long seen the ride-hailing companies as obstinate upstarts that shrugged off any effort…
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