California Voters Reject Law Making Gig Workers Employees

OAKLAND, Calif.—California voters have overwhelmingly approved Proposition 22, a ballot measure that allows gig economy companies to continue treating drivers as independent contractors, according to the New York Times.

Ride-hailing companies Uber and Lyft, along with delivery services DoorDash and Postmates, collectively contributed around $200 million to support Proposition 22, a measure that lets those companies bypass a 2019 state law that would have required them to treat drivers as employees, paying for their insurance and providing other benefits. As a concession to labor advocates, the initiative establishes a wage floor and provides some benefits to drivers. The campaign was the most expensive for any ballot measure in the state’s history.

When the state ordered the companies to hire their drivers, Uber and Lyft threatened to leave California rather than comply. California voters rejected the principles outlined in a Supreme Court-backed ruling and enshrined in a 2019 state law that said workers who perform tasks within a company’s regular business—and who are controlled by the company and do not operate their own firms—must be treated as employees. Under Prop. 22, gig workers are exempt from these rules and can continue to work independently.

“California has spoken,” said Geoff Vetter, a spokesman for the campaign. “Prop. 22 represents the future of work in an increasingly technologically-driven economy.”

The passage of Prop. 22 is a big loss for state and local officials who have long seen Uber and Lyft as obstinate upstarts that shrugged off any effort to make them follow rules. Uber and Lyft launched as carpool services in the early 2010s with just a handful of drivers. Both organizations have promoted the idea that drivers were drawn to their apps by the novelty of gig work rather than the promise of traditional employment. They also argued that they are primarily technology companies, not transportation companies.

With the question of gig work now cemented in California, Uber and other gig economy companies are expected to seek federal legislation that would protect them from similar employment laws in other states.

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