Uber, Lyft Win in California: Drivers to Remain Contractors
Uber and Lyft stocks saw a bump this week after California passed a ballot measure that will exempt them (and similar businesses) from a state law requiring contracted drivers to be reclassified as employees.
App-based work platforms bent over backward and expended millions to ensure Proposition 22 passed in November, with many suggesting it was the only way to continue operations in the state. It seems those efforts weren’t for nothing. With over 80 percent of votes counted this morning, the California Secretary of State’s Office announced that 58 percent of voters supported the measure with 42 percent against. Ride-hailing platforms will be legally exempt from California’s Assembly Bill 5 and drivers will remain contracted employees.
On the upside, those firms had been planning major staffing cuts had Prop 22 failed. Some outfits even suggested they’d have to abandon the state if they were forced to pay benefits — e.g. unemployment insurance, minimum wage, healthcare, and workers’ compensation. But contractors are supposed to become eligible for smaller healthcare allowances and a minimum stipend based on hours worked under AB5, even with Prop 22 passing.
[Image: Jonathan Weiss/Shutterstock]