As Uber, Lyft Triumph With California Voters, Their Adversaries Promise to Fight On

California voters have approved a ballot measure allowing gig economy firms Uber and Lyft to continue to treat drivers as contractors, not staff.

Proposition 22, which is widely projected to pass, exempts ride-hailing and app-based delivery companies from complying with AB 5, a state law that would have forced them to classify drivers as employees—a radical shake-up of their business models.

As independent contractors, drivers enjoy flexibility but are not entitled to benefits such as health care, unemployment insurance, minimum wage and overtime pay.

The companies backing the measure—Uber, Lyft, DoorDash and Postmates—said drivers were in favor of independence and warned that changing their models would result in fewer jobs, more expensive rides and limits on how many cities they could operate in.

Critics of Prop 22, as it became known, rejected the claims and countered that it was creating a legal loophole for the companies to exploit their workers for profit. While labor activists conceded defeat today, they said their fight would continue.

"We fought this fight on the side of justice, with integrity, and I am for ever proud of that. We will prevail," Vanessa Bain, a gig economy worker and co-founder of Gig Workers Collective, told Newsweek as it emerged that Prop 22 was passing.

"For several years, gig workers and gig companies have been engaged in a high-stakes game of tug-of-war over our fate as workers. I have been dedicated to this fight for over four years and nothing is going to change about that regardless of the outcome."

At the time of writing, polling shows more than 6.7 million people (58.4 percent) voted in favor of Prop 22, while 4.7 million people (41.6 percent) have opposed it.

The app firms were a powerful adversary for the labor advocates. Their deep pockets and lobbying expertise resulted in the "Yes on 22" campaign being the most expensive ballot measure yet in California, with more than $205 million from donors including Uber, Lyft and DoorDash.

The money was poured into a marketing campaign that included Facebook advertising and, in Uber's case, integration into its app.

The "No on 22" campaign amassed about $20 million, including funds from the Service Employees International Union and United Food and Commercial Workers Union.

The coalition of gig economy firms said Prop 22 would offer new protections to drivers while they are on the job, including pay of at least 120 percent of minimum wage, health subsidies and accident insurance. They pledged to introduce public safety protections such as recurring background checks of drivers and mandatory safety courses.

"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 are hurt at work," a spokesperson from advocacy group Gig Workers Rising told Newsweek ahead of the voting.

"The election has shown us how ruthless these companies are [...] they have chosen to finance a law that benefits themselves. Prop 22 is a corporate power grab.

"Our organizing is strong and [will] continue long after election night. We will continue to organize to force Uber and Lyft to obey the law and give their workers fair pay, sick leave, unemployment insurance and protections all workers are owed."

The Gig Workers Collective wrote in a blog post published today that the pro-Prop 22 campaign had relied on its wealth to spread "propaganda" across apps and television advertising, pledging that its members remained "ready to continue" the fight.

"These companies are clearly afraid, otherwise they never would have needed to spend that $200 million—and it's workers they are afraid of. It's only a matter of time until the law catches up with them," they wrote.

AB 5 was signed into state law in September 2019, giving labor activists hope that it would help to provide gig economy workers with enhanced rights. But it immediately received strong push-back.

In August this year, a San Francisco court ruled that Uber and Lyft had violated AB 5 by misclassifying their workers, demanding they treat drivers as full employees. The firms responded by threatening to suspend California operations until a Prop 22 vote.

Shares in Uber and Lyft both surged by more than 10 percent after the vote, reported the website TechCrunch.

Uber CEO Dara Khosrowshahi said in an email to drivers last night that Prop 22 would provide "access to benefits and protections, while maintaining the flexibility and independence you want and deserve," according to The New York Times.

He added: "The future of independent work is more secure because so many drivers like you spoke up and made your voice heard—and voters across the state listened."

In a media release, the Yes on 22 campaign said "California has spoken", adding that Prop 22 "represents the future of work in an increasingly technologically driven economy."

But even in the face of a major setback, much of the opposition appeared undeterred. Lorena Gonzalez, the state assemblywoman who drafted AB 5, tweeted: "Uber & Lyft didn't spend $200m talking about unions, they spent it lying about worker protections."

Gonzalez added: "Anyone watching this campaign knows they cloaked themselves in purchased endorsements and used pro-worker talking points: $200-plus-million purchases a narrative, but we will continue to fight in [California] and nationally."

Nicole Moore, a driver and organizer with Rideshare Drivers United, tweeted that Prop 22's opponents were outspent and outgunned, but she would not give up.

"We're building a union of app-based workers [because] what's happening is not fair, it's not right and everyone deserves basic labor rights," Moore wrote.

Speaking to Newsweek, Bain of the Gig Workers Collective echoed that resolve. "This is just one battle in a series of many we have been through and it certainly won't be our last," she said. "Tonight we may grieve, but tomorrow we will roll up our sleeves."

Proposition 22
Rideshare drivers hold signs supporting a no vote on Proposition 22 in Oakland, California on October 9, 2020. JOSH EDELSON/AFP/Getty