A year ago, California looked like an existential crisis for Uber and Lyft. Now, a $200 million political campaign has turned the state into a legal fortress for the same companies, one that could help them repel threats from Washington and elsewhere.
On Election Day, voters in California approved Proposition 22, a ballot measure bankrolled by Uber, Lyft, Postmates, DoorDash, and Instacart that declares their drivers to be independent contractors while affording them certain perks. Prop 22 excludes the drivers from AB 5, a state law passed last year that made employees of gig workers whose roles were in the “usual course” of a company’s business. As employees, they were entitled to an hourly minimum wage, overtime, paid sick days, and unemployment and worker’s comp benefits. Prop 22 pulls back from that, instead promising drivers a guaranteed minimum pay rate while they’re assigned a task; a review process for terminations; and health stipends if they work enough hours. A University of California at Berkeley analysis concluded that after accounting for full expenses and wait times, the proposition’s pay guarantee is worth less than $6 an hour. (The companies dispute this.) Prop 22 also restricts local regulation of the gig companies, and bars legislators from trying to change its new status quo unless they have a seven-eighths supermajority and their reforms are in line with Prop 22’s original intent.
