Along with other businesses, Uber and Lyft spent hundreds of millions to pass Proposition 22.
California voters have passed a controversial ballot measure to exempt firms like Uber and Lyft from classifying their “gig” workers as employees rather than independent contractors. Simply put, this result will allow companies like Uber and Lift to keep things as they are. Uber (and Uber’s Postmates), Lyft, DoorDash and Instacart invested more than $200-million to fight for Proposition 22’s passage. This makes it the most expensive, or costliest ballot measure in the state’s history.
All of this investment was initiated shortly after California’s Assembly Bill 5 went into effect the beginning of January 2020.
“Existing law, as established in the case of Dynamex Operations West, Inc. v. Superior Court of Los Angeles (2018) 4 Cal.5th 903 (Dynamex). Creates a presumption that a worker who performs services for a hirer is an employee for purposes of claims for wages and benefits arising under wage orders issued by the Industrial Welfare Commission. Existing law requires a 3-part test. Commonly known as the “ABC” test, (establishes) a worker is an independent contractor for those purposes. Existing law, for purposes of unemployment insurance provisions, requires employers to make contributions with respect to unemployment insurance and disability insurance from the wages paid to their employees. Existing law defines “employee” for those purposes to include, among other individuals, any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee.” – California Legislative Information
What it boils down to is obvious. These companies can continue treating their drivers as independent contractors who are not entitled to basic rights and protections. This was an expensive fight, but it will save these companies billions in benefits and protections. Many argue that the savings will directly impact the consumers. Others feel the independent contractors are being mismanaged and are vulnerable. Either way, Proposition 22 could send a ripple effect across the country in regards to these massive businesses.
