Uber, Lyft Spent a Wild Amount, Came Out on Top in California

Proposition 22 passes, so workers can remain independent contactors
By Kate Seamons,  Newser Staff
Posted Nov 4, 2020 7:33 AM CST
Uber, Lyft Come Out on Top in California
In this Jan. 12, 2016, file photo, a ride share car displays Lyft and Uber stickers on its front windshield in downtown Los Angeles.   (AP Photo/Richard Vogel, File)

There was at least one clear winner on election night: Uber, Lyft, Instacart, and other delivery and ride-share companies, which can stick with classifying their California workers as independent contractors. Voters in the state came out 58% to 42% in favor of Proposition 22, which allows the companies to skirt a state law designed to provide employee-like protections for their drivers. The win came at no small expense to the companies, who Slate reports poured $200 million into their campaign to get Prop 22 passed, "making this the most expensive ballot measure in California since at least 1999." (Critics of Prop 22 managed to raise only a tenth of that.) Had it failed, the cost would have been even greater: hundreds of millions annually in salaries and benefits that would have tugged on their "already-red bottom lines," per the Wall Street Journal.

Per the Journal, the companies argued in ads and other messaging that they would only be able to hire a small portion of their drivers as employees, and that they would have to work scheduled shifts rather than maintain the flexibility that attracts many to the work; riders were warned that both wait times and rates would surge. Uber and Lyft had warned they would leave the state altogether if they lost, and the win "is likely to entrench the status quo" in other states, writes Slate. The companies will now enact two promised changes: a 30-cent-per-mile guarantee and health care subsidies for those who work 15+ hours a week, though time spent waiting for fares doesn't count toward that total. Per the AP, investors were pleased with the news: Shares of Uber and Lyft rose 11% to 13% before the opening bell Wednesday. (More Election 2020 stories.)

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