Uber And Lyft Win Disputed Labor Law Case, Drivers Are Not Employees

Voters in California have passed a measure that will see freelance workers continue to be classified as independent contractors, in a victory for companies such as Uber and Lyft.

It overturns a landmark labour law passed last year that ruled gig-economy workers should have employee status and the protections that go with it.

The new measure, Proposition 22, was backed by Uber, Lyft and DoorDash.

The two ride-hailing firms’ shares soared in early Wednesday trade.

Uber’s stock was trading 15% up on its opening price by mid-morning in New York. while Lyft had gained 13%.

Their campaign had cost $205m (£157m), making it the most expensive in state history.

Advertising Campaigns

Some drivers had backed Proposition 22 – but labour groups opposed it, pointing out all the benefits of being classed as employees, including rights to:

  • the minimum wage
  • overtime
  • expenses
  • paid sick days and leave
  • healthcare
  • unemployment insurance

And the California Labour Federation had accused supporters of Prop 22, as it was colloquially known, of “attempting to buy their own law through the ballot measure process”.

Labour groups raised about $20m to oppose Prop 22 – but the far wealthier pro-campaign from Uber, Lyft, DoorDash and Instacart, was able to buy TV advertising, as as well as putting ads in their taxi-hailing apps.

And both Uber and Lyft had threatened to withdraw services from California entirely or severely cut back on drivers if they had to start treating workers as employees.

Facial Recognition

Declaring the success of the vote, which formed part of the wider presidential election, Uber said: “Today, California voters agreed that instead of eliminating independent work, we should make it better.”

The win came with some concessions though and companies must now offer workers:

  • a minimum earning standard of 120% of minimum wage
  • healthcare and accident insurance

Other tech-related votes passed overnight included:

  • Maine voters passed a ballot to ban the use of facial recognition by police and city agencies
  • Massachusetts voted in laws guaranteeing people could repair their own property, including by unlocking advanced telematic data in cars so third parties or owners could carry out vehicle maintenance

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