Proposition 22, which has the most expensive ballot-measure campaign in California, won voters on Tuesday.
California voters have decided to exempt Uber and Lyft from the state’s labor law, the Guardian, and CNBC reported.
From now on, the two ride-hailing companies can keep on categorizing their drivers as contractors rather than employees.
According to the Guardian, around 58% of the voters voted in favor of the ballot measure.
The campaign for the proposition, Yes 22, published its press release on Tuesday for its win.
“This is a win for drivers across California,” said Alfred Porche, a rideshare driver from Southern California, per the release.
The proposition, according to him, protects their ability to continue to work as “independent contractors.”
The two companies threatened to stop their operations in California in August if the court would push them to reclassify their drivers as employees.
However, the threat did not push through, and the companies continued their operations.
Two courts in California have ruled they should reclassify their drivers per the state’s labor law.
Uber and Lyft argued that the law pushing them to re-categorize their drivers would not work on their business model.
The proposition pushed through from voters’ support despite criticisms from drivers and labor groups.
An Aggressive and Expensive Campaign
A court ruling in August and another one in October urged the two companies to reclassify their drivers.
Because of the rulings, the two companies poured a lot of resources and effort into campaigning for their last hope, the passing of Proposition 22.
Tech companies that include Lyft, Uber, DoorDash, and Instacart raised and spent more than $220 million for the campaign.
Moreover, Lyft and Uber maintain their drivers support the proposition too.
Other Kinds of Benefits
Proposition 22 will disqualify Lyft and Uber drivers from accessing employee benefits such as health insurance, minimum wage, and unemployment benefits.
However, despite the passage of the proposition, drivers will get other kinds of benefits or protections.
For example, guaranteed hourly wage and access to health insurance subsidies, per the Guardian.