Uber, Lyft Celebrate Win After Labor Legislation Passes In California

Proposition 22, a highly contested state ballot measure in California, passed on Tuesday (November 3) with nearly 58% of state voters approving. 

Its passage relieves delivery service apps of adhering to California labor laws by allowing drivers to be labeled as independent contractors, not employees. 

Some of the top delivery service apps including Instacart, DoorDash, Lyft, and Uber reportedly spent $200 million in support of Proposition 22. 

In 2019 labor law AB5 passed, changing the way employers categorize employees, and comply with state labor laws in providing benefits and wages. The delivery app tech companies threatened to leave the state, citing that the mandate to comply would dramatically change their business model. 

Labor rights groups and drivers opposed Proposition 22 because they see the measure would allow employers to avoid paying standard minimum wage and providing benefits

These companies source much of the labor in the gig economy, which many rely on to add sources of income. As the pandemic hit, this relevance of labor rights for app drivers became clearer because independent contractors are not provided unemployment benefits by these companies. 

Rideshare Drivers United organizer Nicole Moore tweeted after the results came in. “We were outspent 20:1,” she said. 

Labor organizers have committed to continuing their work to protect workers.

Uber and Lyft have agreed to provide drivers with some form of benefits under Prop 22, but organizers say the protections for workers will not be as extensive as they would have been under a labor law like AB5.  

Uber CEO, Dara Khosrowshahi, celebrated the win in an email to drivers, saying, “We’re looking forward to bringing you these new benefits - like health care contributions and occupational accidental insurance - as soon as possible.” 

Photo: Getty Images 

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