UPDATE: California voters passed Proposition 22, which means that ride-hailing companies like Uber and Lyft can consider drivers independent contractors, not employees.
The future of the so-called gig economy is in the hands of California voters deciding on Proposition 22, the latest development in an ongoing fight over whether app-based drivers should be considered independent contractors or employees.
The proposition, which has the support of a pricey campaign funded by companies like Uber and Lyft, would allow these companies to continue to classify their drivers as independent contractors, while providing some limited benefits and protections. Classifying drivers in this way has kept costs lower for these services, and been central to their business model.
But critics of these firms — including a movement made up of drivers who want the right to unionize — argue that the work these gig workers do makes them employees, and that they deserve protections given to employees, like overtime pay and paid leave.
Proposition 22 isn’t the first time California has considered the employee-independent contractor question. Last year, the state approved a law called AB 5, which created new standards for classifying people as independent contractors that built on a previous ruling from the state’s Supreme Court. But companies like Uber and Lyft have not complied, inviting a court case from state officials. The companies hoped to win that case, so that their delivery and ride-hailing apps would be able to maintain business as usual.
But they’ve had no such luck. In a recent decision, a California appeals court reaffirmed that yes, ride-hailing drivers ought to be considered employees. That means that Proposition 22 could potentially be these companies’ last chance to protect their businesses as they know them. But if Proposition 22 succeeds, it could also spell defeat for ride-hailing drivers who are demanding better protections and pay.
California Proposition 22
A yes vote would mean ride-hailing companies can consider drivers independent contractors who are not entitled to the same benefits as employees.
A no vote would mean ride-hailing drivers should be considered employees, and given additional benefits and protections.