SILICON VALLEY VICTORY

California’s Prop 22 Passes, Allowing Uber and Lyft to Classify Drivers as Independent Contractors

The state proposition will allow ridesharing companies to continue to classify workers as independent contractors, not employees.

With around 72 percent of precincts reporting as of Wednesday morning, California had passed Prop 22, the Uber, Lyft and Postmates-backed state proposition that exempted the gig economy giants from classifying its ridesharing and delivery drivers as employees under new freelance labor laws. The $224 million campaign to pass Prop 22, the costliest in state history, was funded largely by the three major tech companies, Doordash, and the parent company of Instacart, the grocery delivery app. Instead of mandating companies give drivers full-time benefits or health insurance, Prop 22 requires they provide an hourly wage for driving time at 120 percent of local or state minimum wage, as well as a stipend for health insurance coverage. It does not cover idling time between trips—a benefit that would have been covered under California’s AB 5, which expanded protections for freelance workers last September. Per CNN Business, Prop 22’s victory is likely to influence Uber and Lyft’s ability to fight attempts to reclassify its workers as employees in other states, denying them workers’ compensations, unemployment, or health insurance coverage.