Uber and Lyft have won a major victory in their battle to continue classifying drivers as contractors, not employees, following the passage of a ballot measure that exempts them from a California labor law.
On Tuesday, voters in California passed Proposition 22, the most expensive ballot-measure campaign in state history, which came to symbolize a bitter struggle over the future of the gig economy.
The measure was backed by some of Silicon Valley’s most powerful tech companies, including Uber, Lyft, Instacart and DoorDash, which spent upwards of $200m on the efforts.
The companies claimed that AB5, a labor law passed in 2019 that changes the way companies classify employees, would drastically change how they do business. Uber and Lyft even threatened to pull out of California after a court order to comply with AB5 in August.
The Yes on Prop 22 campaign declared victory late on Tuesday, calling it “a win for drivers across California”.
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 proposition carves out an exemption from AB5 for some driving and delivery apps.
The law disagreed, as the state attorney general and two different courts ordered Uber to comply with AB5.
Drivers will now get vouchers to access subsidized health insurance and guaranteed hourly earnings.
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