Uber and Lyft win battle over driver status in California

Uber and Lyft win battle over driver status in California

Voters in California have passed a measure that will see freelance workers continue to be classified as independent contractors, in a victory for companies such as Uber and Lyft.

It overturns a landmark labour law passed last year that ruled gig-economy workers should have employee status and the protections that go with it.

The new measure, Proposition 22, was backed by Uber, Lyft and DoorDash.

Their campaign cost $205m (£157m), the most expensive in state history.

The two ride-hailing firms’ shares soared in extended trade – Uber was trading 13% up on Tuesday’s closing price, while Lyft rose 17%.

Some drivers had backed Proposition 22 – but labour groups opposed it, pointing out all the benefits of being classed as employees, including rights to:

And the California Labour Federation had accused supporters of Prop 22, as it was colloquially known, of “attempting to buy their own law through the ballot measure process”.

Labour groups raised about $20m to oppose Prop 22 – but the far wealthier pro-campaign from Uber, Lyft, DoorDash and Instacart, was able to buy TV advertising, as as well as putting ads in their taxi-hailing apps.

And both Uber and Lyft had threatened to withdraw services from California entirely or severely cut back on drivers if they had to start treating workers as employees.

Declaring the success of the vote, which formed part of the wider presidential election, Uber said: “Today, California voters agreed that instead of eliminating independent work, we should make it better.”

The win came with some concessions though and companies must now offer workers:

Other tech-related votes passed overnight included:

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