Uber, Lyft, and other gig companies have been saved by ballot measure Prop 22 after Californians sided with the ballot measure. Prop 22 exempts ride-hailing companies from classifying their workers as employees. Drivers under these platforms are to remain independent contractors.
The campaign is the most expensive in California history costing $200 million to support the measure. Had Prop 22 failed, drivers for Uber, Lyft, and DoorDash will receive employment benefits, like the minimum wage.
The measure was in response to the AB5 law mandating that the company provides full employment benefits for the drivers. Uber and Lyft had threatened to leave California if they were forced to classify drivers as employees.
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Uber’s CEO, Dara Khosrowshahi had predicted that the company might have to raise its fare prices. Khosrowshashi also said the company was considering keeping fewer drivers on its platform if Prop 22 failed. He said the company would only have room for 280,000 workers instead of the 1.4 million who use the app at the moment.
Khosrowshahi had sent a mail to the drivers on Uber’s platform sharing his pleasure that the ballot measure was successful as reported by Finacial Times’ Dave Lee.
Uber’s email to drivers tonight. (As provided by a company spokesman. I’m not going around, driving Uber, calling myself Jasmine) pic.twitter.com/5Jnib17FX6
— Dave Lee (@DaveLeeFT) November 4, 2020
Uber and Lyft had said that most drivers prefer to be independent due to the flexibility and ability to set their own hours. However, this classification also leaves them bearing the burden of the work. For example, they have to bear the costs of fueling and maintaining their vehicles. At the same time, it deprives them of traditional employee benefits like paid sick leave, health insurance, and worker’s compensation.
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