The votes in California have been counted and have declared the passing of Proposition 22, which cements the classification of drivers for gig companies as contractors.
Proposition 22 or Prop. 22, originated a a last ditch effort by gig companies to bypass employment state law AB5. AB5 is a state law which attempted to classify drivers as employees. Thus, with the passing of AB5 drivers would have been guaranteed access to minimum wage, employer-provided health care and bargaining rights. While AB5 passed in the state assembly and was even upheld in a court of appeals, with the passing of Prop. 22 companies like Uber and Lyft will be able to escape the implications of AB5 and keep their drivers as independent workers.
It was early on Wednesday when the Associated Press declared that Prop. 22 passed with 58% of the vote. Geoff Vetter, a spokesperson for the Yes on Prop. 22 campaign celebrated the victory by saying “California has spoken, Prop. 22 represent the future of work in an increasingly technologically-driven economy.” It was also reported that after the passing of Prop. 22 Uber and Lyft’s stock prices both rose significantly with Uber rising more than 14% and Lyft rising more than 11%.
Prop. 22 also saw a historical amount of money being spent by companies like Uber, Lyft and DoorDash. These companies spent a record breaking $200 million in order to promote the proposition. In their promotions gig companies argued that if Prop. 22 did not pass their business models would have been severely damaged. Uber and Lyft warned that without the passing of Prop. 22 they would have been forced to limit access to their services, which in their ads meant longer wait times, higher fares, and service suspension in less trafficked areas.
Moreover, now that Prop. 22 has passed gig companies are also celebrating as it offers heavy protections in keeping their drivers as contractors in the future. This is because future legislation would need a seven-eights majority to amend the law now that Prop. 22 has passed.
William Gould, a Stanford University law professor, comments on Prop. 22 stating that “It’s a very extreme proposition in that regard. And I think it would be virtually impossible to ever reverse it other than through another ballot.”
Even with big names in politics coming out to oppose Prop 22, like Sen. Elizabeth Warren (D-Mass), Bernie Sanders (I-Vt.), Vice-presidential candidate Sen. Kamala D. Harris (D-Calif.) and the Democratic presidential nominee Joe Bidden, it was not enough to sway voters against Prop. 22.
Dennis Herrera, the city attorney of San Francisco was also in opposition of Prop. 22. Herrera is currently suing Uber and Lyft in a continuous attempt to force them to employ their drivers. Herrera comments that “You look back and you say, ‘I wish it didn’t need to come to this, that people would have started adhering to the law.’ I thought it was important to fight for the rights of workers and the rights of consumers.”
However, now that Uber and Lyft have reinforced their standing in California with Prop. 22, gig companies are setting their sight in drafting and passing federal legislation that would provide even further protection from ever being targeted by other state laws.
Tony Xu, the chief executive of DoorDash, referenced their future ambitions by saying “Now. we’re looking ahead and across the country, ready to champion new benefits structures that are portable, proportional, and flexible. We look forward to partnering with workers, policymakers, community groups and more to make this a reality.”
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