Uber wins the battle against California

Uber drivers won’t be recognised as employees. This is what Californian citizens decided on 3 November 2020, after voting the ballot measure. 

Proposition 22, or Prop 22, is the ballot measure sponsored by Uber, Lyft and other companies pertaining to what is called Gig Economy (i.e. the economy based on short-term contracts ad freelance work), in order to maintain the status quo of their businesses and win the legal battle against the state of California.  

According a California appeals court, Uber and Lift were violating the Assembly Bill 5 law that took effect on 1 January. The law included the obligation for these platform’s companies to classify their drivers as employee. After the vote and the campaignn that costed the companies 200.000 dollars, making it the costliest ballot in California’s history, it came out that citizens were in favor of the ballot measure.  58% of voters supported the rescission of the provision and 42% voted against the companies’ proposition.  According to a report of California Secretary of State’s office, 77% of eligible people took part in the referendum. 

Proposition 22 will allow companies to still recognise their drivers as independent contractors instead of employees. This means that they won’t get paid for the time spent waiting for a gig. At the same time the companies made some compromises, deciding to give them some limited benefit like minimum earnings guaranteed and compensationif they get hurt on the job. Thanks to the ballot, according to an estimate, Uber and Lyft will save 100 million dollars a year on employment costs.

Many Uber drivers voted in favour. Joe Renice, an Uber driver wotking in San Francisco, says: “This is a job that I make over $100,000 a year doing. And I have complete and total freedom and flexibility to do that.” He claims that the most important aspect is, in his opinion, “the ability to do this when and where and how (he) want(s) to do it”. But he also admits that “it’s not for everybody. Some people are better off being employees. Not me.”

Meanwhile, the win in California made Uber and Lyft’s shares go up in premarket trading, recording an increase of, respectively, 13,67% and 15,86%.   

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