Uber and Lyft have won a major victory in their battle to continue classifying drivers as contractors, not employees, following the passage of a ballot measure that exempts them from a California labor law.
On Tuesday, voters in California passedProposition 22, the most expensive ballot-measure campaign in state history, which came to symbolize a bitter struggle over the future of the gig economy.
Roughly 58% of ballots were cast in favor. The measure was backed by some of Silicon Valley’s most powerful tech companies, including Uber, Lyft, Instacart and DoorDash, which spent upwards of $200m on the efforts. More detail can be found at this article by the guardian: https://www.theguardian.com/us-news/2020/nov/04/california-election-voters-prop-22-uber-lyft
Platforms like Uber and Lyft represent just a fraction of California’s independent contractor workforce. In Los Angeles, contract workers exist across many industries including music & film, news media, information technology and beyond and law makers untangling which job roles apply and which don’t can be confusing. Here is how freelancers can be affected.
Classifying rideshare drivers as employees could have set a dangerous legal precedent across America if other states pursue similar measures. Dangerous that is, to the profits of ride-hailing companies who depend on reducing costs and liabilities to ensure a nimble and flexible business model. From New York to Washington to Florida, state governments seeking measures popular with its citizens could have a profound impact on the business model that made Uber and Lyft so successful.
On August 19, Uber pushed an alert message to its drivers: “Ridesharing in CA may be suspended”. While this brings a lot of short term uncertainty, investors believe Uber and Lyft will “go to the mat” on this issue. Armies of lawyers and lobbyists will be engaged to triple up efforts to give ridesharing companies an exemption from Senate bill AB-5.
In general, Uber and Lyft bet that public opinion would turn against lawmakers, and that pressure would build to allow the companies to operate in the state as they are today using a “contractor” model instead of payroll employee model. Customers would have been inconvenienced and an unmeasured portion of drivers prefer to keep their flexibility and freedom to work when they want, how they want.Back in 2016 Uber suspended service in Austin Texas, angering both drivers and riders who depended on the service to support their livelihoods. A number of alternative services grew to provide a partial substitute, but when Uber and Lyft were allowed to return with unchanged business models, they quickly dominated the market again. Both companies along with other gig businesses, have poured $181 million dollars (as of September 8th) into a ballot measure campaign that would create a “third category” of employment, enabling them to continue classifying drivers as contractors rather than staff
Follow this ongoing blog to stay updated on the latest developments for California gig-workers (below):
October 23th 2020 news:
Ridesharing companies Uber and Lyft must classify their drivers as employees, an appellate court ruled yesterday 22-Oct evening. However, the decision will be stayed for 30 days after the court issues the remittitur, which has not happened yet. That means depending on how ballot measure Proposition 22 goes, this case may not end up being the deciding factor in how Lyft and Uber classify their drivers in California. “This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” Lyft spokesperson Julie Wood said in a statement to TechCrunch. See full article here on Techcrunch.com
October 21th 2020 news:
The Opponents of California’s Proposition 22 filed a complaint this morning with the United States Postal Service. The No on 22 campaign alleges the Yes side is not eligible for a nonprofit postal status and is asking USPS to revoke its permit. Ride hailing app companies are doing everything they can to stop or slow down the chances of the bill from being implemented.
September 12th 2020 news:
Theguardian.com: Why Uber and Lyft are taking a page out of big tobacco’s playbook in labor law battle. – A recent investigative report reveals that the Prop 22 campaign and their supporters (with or without assistance of the gig companies themselves) have also leveraged another political tactic for which big tobacco is notorious: attacking and harassing critics, including academics and government officials.
September 9th 2020 news:
BENZINGA.com: Uber Analyst Expects California’s Prop 22 To Pass Based On Latest Polling A new poll published by Redfield and Wilton found 41% of California voters would vote “yes” for Prop 22 compared to 26% who would vote “no” and 34% who are undecided.
September 8th 2020 news:
September 4th 2020 news:
September 1st 2020 news:
Bloomberg: Uber Law Threatens the Gig Economy – A majority of drivers like working as independent contractors, so why force them to become employees?
JD Supra: Uber and Lyft to Stay in California … for Now – Consumers in California will still be able to utilize the rideshare services of Uber and Lyft, at least for the time being. The rideshare companies recently lost their attempt to delay a preliminary injunction that will compel them to reclassify their drivers as “employees.” In response to the order, the companies announced that they would leave their home state of California. The Court of Appeal recently granted a temporary stay in favor of the rideshare companies while the matter is under appeal, enabling them to continue to operate without having to immediately reclassify their drivers.
August 27th 2020 news:
The Telegraph: Uber is the litmus test of support for the market economy Will policymakers protect innovation, or sacrifice our economic welfare on the altar of traditional employment relationships?
August 25th 2020 news:
August 21th 2020 news:
August 20th 2020 news:
August 19th 2020 news:
Uber CEO on youtube interview making the case of why drivers shouldn’t be considered like full time employee staff.
August 14th 2020 news:
August 13th 2020 news:
August 12th 2020 news:
July 20th 2020 news:
March 5th 2020 news:
January 10th 2020 news:
December 31 2019 news:
September 12th, 2019 news: