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This article was published on November 4, 2020

Prop 22 passes: Uber and Lyft drivers will continue as independent contractors in California

It's a win for Uber and Lyft, but a loss for drivers wanting more employment rights

Prop 22 passes: Uber and Lyft drivers will continue as independent contractors in California Image by: Marco Verch - Flickr - Edited
Matthew Beedham
Story by

Matthew Beedham

Editor, SHIFT by TNW

Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls. Matthew is the editor of SHIFT. He likes electric cars, and other things with wheels, wings, or hulls.

As part of the US election ballot, voters in California also decided the fate of the state’s Uber and Lyft drivers by deciding to have them classified as independent contractors.

Reports say that 58% of Californian voters voted in favor of Proposition 22, the proposal backed by Uber, Lyft, and DoorDash to campaign against AB5 legislation that would classify gig-workers as employees.

It’s hard to say if the voting public acted in their own interests or with the welfare of drivers in mind, though. Gig Workers Rising, a driver advocacy group, said it’s a “loss for democracy that could open the door… [for] corps to write their own laws.”

The Yes for Prop 22 campaign announced its victory late on Tuesday, saying it is “a win for drivers across California.”

Uber and Lyft have both previously said that prices would increase and drivers would have less flexibility if they had to abide by AB5 laws. Gig Workers Rising rebuffed these statements as nothing more than scare tactics to swing the vote in Uber and Lyft’s favor.

However, a San Francisco Chronicle article said the companies’ labor costs could increase by 30% if drivers had to be recognized as employees. As a company that has continually struggled to find profitability, any operating cost increases would have undoubtedly led to increased costs for consumers or resulted in substantial internal cuts.

[Read: 4 ridiculously easy ways you can be more eco-friendly]

According to internal surveys, drivers have continually said that they want to remain as independent contractors. Many believed that being made employees would cut their earnings, and remove any flexibility over working on their own terms. While an independent study corroborated these findings many claimed they asked slanted questions that pushed drivers towards Prop 22.

That begins to make sense when we consider an OpEd written by Uber CEO Dara Khosrowshahi, published by New York Times earlier this year, which claimed the company couldn’t offer flexibility to drivers if they had to be made employees. The piece was criticized by academics saying that Uber had continually conflated employment status with the ability to offer workers a flexible work environment.

UC Berkeley economics professor Michael Reich said Uber’s surveys falsely portrayed a world where drivers would have little or no flexibility without Prop. 22, the Sacramento Bee reports.

It also recently came to light that Uber and Lyft paid more than $400,000 to the agencies that carried out these supposed independent surveys of drivers.

Proposition 22 has been one of the most hotly fought and expensive legal battles in the mobility sector. In fact, it’s the most expensive ballot campaign measure in California’s history. Uber, Lyft, and delivery company DoorDash have collectively put more than $200 million into campaigning against AB5, the laws that came into force in January and attempted to declare gig-workers as employees.

Whatever criticisms may have been cast Uber and Lyft’s way, the reality now is that, in California at least, drivers will continue to operate as independent contractors, with few safeguards over their employment, no minimum wage, and no healthcare insurances.

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