Uber and Lyft have finally celebrated victory regarding the ongoing California labor law, as Proposition 22 — the most expensive ballot measures in California — has been approved by the court. The ballot had its facts put straight up, revolving around the core point that Uber and Lyft will continue to classify their drivers as contractors and not employees, and thats what Californians want.
The fight against Assembly Bill 5 by Uber and Lyft had been going on since January 1st as it became the law. AB-5 clearly identifies that workers are independent contractors if and only if they are free from the company’s control and work outside the company’s core business.
As in August, the Californian court had ordered both the companies, Uber and Lyft to reclassify their drivers in California as employees rather than independent contractors. The Californian court was adamant that the drivers working for these companies shouldn’t be deprived of their basic rights and should be given benefits – minimum wage, paid sick leave, and unemployment insurance – like all other companies.
However, both Uber and Lyft didn’t pay heed to the court order and rather threatened that they would shut down their business if further forced. The argument they presented was that these are technology companies and not transportation businesses.
If gone in compliance with AB-5 and Proposition 22 failed, Uber and Lyft have brought the drastic effects that will come with this to the table. As by Uber, “rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state.” Both the CEOs have given out their view to the California appeals court on this matter.
Again in October, the appeals court said that Uber and Lyft must reclassify drivers as employees.
Employment of drivers by Uber and Lyft would not only force them to raise their fares but also be able to hire only a small fraction of drivers out of contractors currently working with them. Whereas people still don’t seem okay with the idea, as observed, San Francisco’s city attorney – Dennis Herrera – stated, “The law is clear: Drivers can continue to have all of the flexibility they currently enjoy while getting the rights they deserve as employees. The only thing preventing that is Uber and Lyft’s greed.”
About 58% of the ballots were in favor of Proposition 22. The results were heavily supported by a $200 million campaign by ride-hailing and delivery startups for this measure.
After Proposition 22 faced a great backlash in San Francisco – where both Uber and Lyft are headquartered – with more than a 19-point deficit, it was approved as per The Associated Press.
As in accordance with Proposition 22, Uber and Lyft will provide the drivers with limited benefits, but still, they will be statused as independent contractors rather than employees. Not forgetting, these are still on a grant by the court, and if this is successful, then it’s a win-win situation or otherwise, this will have to be put into question seriously.
Featured image: Fredric Brown / AFP / Getty