Uber and Lyft have sustained a significant victory with the passing of Proposition 22. Following the passage of their ballot, they are exempt from California Labor Law AB5. This means that they can continue classifying their drivers as independent contractors, not employees.
According to The Guardian, roughly 58% of ballots were cast in favor of Proposition 22. The measure was backed by some of Silicon Valley’s most powerful tech companies, including Uber, Lyft, Instacart, and DoorDash. As a result, Prop 22 was the most expensive ballot-measure campaign in California state history—with upwards of $200 million spent on the effort.
With the passage of Prop 22, workers at gig economy firms will continue not to have access to employee rights like minimum wage, unemployment benefits, and health insurance. However, Uber and Lyft have conceded to supplying workers with some form of benefits. The protections will not be nearly as extensive as they would have been under AB5. Drivers will now have access to vouchers to get subsidized health insurance and be guaranteed hourly earnings. In addition to that, the company will implement new safety measures, including more frequent background checks of drivers.
In an email to Uber drivers, Uber CEO, Dara Khosrowshahi, wrote, “We’re looking forward to bringing you these new benefits – like healthcare contributions and occupational accident insurance – as soon as possible.” No other statements regarding the win have been released at the time this article was released.
Several groups against the proposition released statements following the announcement. Gig Workers Rising called the victory a “loss for our democracy that could open the door to other attempts by corps to write their own laws.” Nicole Moore, a driver and organizer with Rideshare Drivers United, said, “We were outspent 20:1. We were outgunned. But we haven’t gotten this far because it was easy. We are fighters. And we punch above our weight. We stand strong when we stand together. We will fight – in the courts, in Sacramento, and in the streets.”
The passage of this proposition will likely be seen as an example for tech legislation around the United States. For the latest information on the rideshare industry news, click here to visit the Rideshare Law Group blog.