California voters approve measure exempting Lyft, Uber from labor law

Voters in California have approved a ballot measure that will exempt companies like Uber and Lyft from Assembly Bill 5, the state’s landmark law that establishes a test for determining worker classification, The Associated Press has projected.

The passage of Proposition 22 is a huge win for gig economy companies that spent more than $200 million to aid its passage.

As employees, ride-share drivers would gain basic worker protections such as a minimum wage, health care access and a right to organize.

Drivers will get more limited job protections under Prop 22 that companies previously did not give them.

“With the passage of Prop 22, app-based ride-share and delivery drivers across the state will be able to maintain their independence, plus have access to historic new benefits, like a minimum earnings guarantee and health care,” the Yes on 22 campaign said in a statement.

The resolution led by nearly 2 million votes with 10 million total counted as of 2:30 a.m. ET.

The proposition was one of the gig companies’ last stands against the state’s labor laws. Uber and Lyft had initially resisted compliance with Assembly Bill 5, which first took effect in January, claiming that their core business is technology rather than ride-hailing.

The law requires that the task performed by workers be outside of the usual course of the hiring entity’s business for them to be classified as independent contracts.

A California judge ruled in August that Uber and Lyft should have to comply with A.B. 5, a decision upheld by a state appeals court last month.

Prop 22 will make those decisions functionally irrelevant by carving gig work out of the state’s labor law.

Uber, Lyft, Postmates, DoorDash and Instacart poured nearly $203 million into passing the measure. The opposition — including labor groups and some Democratic nominees — raised a comparably meager $20 million.

“Today, California voters agreed that instead of eliminating independent work, we should make it better,” Uber spokesperson Davis White told The Hill. “Soon, drivers in California will be guaranteed a minimum earnings standard of 120% of minimum wage and will gain access to important new benefits like healthcare, accident insurance, and more.”

A spokesperson for Lyft directed The Hill to Yes on 22’s statement when asked for comment.

“The obscene amount of money these multi-billion dollar corporations spent misleading the public doesn’t absolve them of their duty to pay drivers a living wage, provide PPE to protect workers as the pandemic deepens or repay taxpayers for the nearly half a billion these companies have cheated from our state unemployment fund,” Art Pulaski, executive secretary treasurer of the pro-labor organization the California Labor Federation, said in a statement. “The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they’re hurt at work.”

Gig companies had long touted surveys they paid for showing driver support for the proposition, but thousands of drivers organized in opposition.

“It’s a bad proposition, it’s bad for labor laws, it’s bad for workers, and it really puts me as a driver in a very vulnerable spot,” Mekela Edwards, a ride-share driver in Oakland with the No campaign, told The Hill. “I’m an essential worker … we deserve to have a minimum wage.”

The proposition will be difficult to reverse, with protections in the bill requiring a seven-eighths supermajority of the legislature for any amendments.

“It’s going to be a defeat that would be incredibly difficult to bounce back from,” said Jerome Gage, an L.A.-based Lyft rider also with the No campaign.

Drivers still pushing for stronger labor protections will have minimal recourse moving forward, according to Stanford University law professor emeritus William Gould, a labor lawyer whose research focuses on the gig economy.

“One is the regulation of pay, and maybe working conditions, through statutes directly,” Gould said.

The other depends on former Vice President Joe Biden winning the election and making good on his promise to expand the National Labor Relations Act to include gig workers, making it easier for them to unionize.