Please ensure Javascript is enabled for purposes of website accessibility
Uber, Lyft Spend Big, Win in California Vote About Drivers
gvw_ap_news
By Associated Press
Published 3 years ago on
November 4, 2020

Share

LOS ANGELES — Uber, Lyft and other app-based ride-hailing and delivery services spent $200 million in a winning bet to circumvent California lawmakers and the courts to preserve their business model by keeping drivers from becoming employees eligible for benefits and job protections.

The titans of the so-called gig economy bankrolled the most expensive ballot measure in state history, which was decided Tuesday with 58% of more than 11 million voters choosing to keep drivers classified as independent contractors able to set their own hours.

Shares of both companies surged 11% to 13% before the opening bell Wednesday after the huge victory.

The outcome was a defeat for labor unions that had pushed for a state law aimed directly at Uber and Lyft, mandating they provide drivers with protections like minimum wage, overtime, health insurance and reimbursement for expenses.

Supporters of Proposition 22 said the outcome showed voters wanted to preserve the flexibility of the current system. Opponents said the companies had bought their own law and vowed to continue fighting for drivers’ rights.

San Francisco-based Uber and Lyft had threatened to pull out of California if they lost. They got additional support in the fight from DoorDash, Postmates and Instacart, which all could have had their businesses upended if it failed.

The Companies Sought an Exemption

Labor-friendly Democrats in the Legislature last year passed the landmark law known as AB5 to expand a 2018 ruling by the California Supreme Court that limited businesses from classifying certain workers as independent contractors.

The companies sought an exemption, taking their fight to voters with a campaign that included TV ads, mailers and messages that appeared on their app for both customers and drivers.

Opponents said the companies exploit drivers to keep profits high and the ballot measure would deprive workers of rights like overtime pay and workers’ compensation.

Supporters said the measure would allow drivers to maintain the freedom to work hours they choose and would provide other benefits.

Bill French, 62, a former high school baseball coach who voted for the measure in Huntington Beach, said he retired early so he could supplement his pay as an Uber driver and work when he wants.

“I don’t need them to control me and tell me when I’m going to work and not going to work,” French said.

More than $225 million was spent on the race, with unions kicking in about $20 million of that.

“The obscene amount of money these multibillion-dollar corporations spent misleading the public doesn’t absolve them of their duty to pay drivers a living wage,” Art Pulaski of the California Labor Federation said in a statement. “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’re hurt at work.”

The Measure Had Support Nearly Statewide Except in the San Francisco Bay Area

The spending, which didn’t account for $30 coupons Uber Eats and other services offered customers to promote their brands, will likely put future ballot measure funding on steroids, said political science professor David McCuan of Sonoma State University.

“What Prop. 22 does is it raises the tide of all ballot measures,” McCuan said. “It sets records that are just going to be blown past the next time. … It makes the parallel route of direct democracy a playground that will be measured in the billions in a few (election) cycles.”

The measure had support nearly statewide except in the San Francisco Bay Area and a sliver of coastal counties to the north.

Although drivers would remain independent contractors exempt from mandates such as sick leave and expense reimbursement, they would receive some “alternative benefits,” including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week.

Uber CEO Dara Khosrowshahi sent a letter to drivers late Tuesday thanking them for their support and promising details in coming weeks on how they can enroll in benefits such as accident insurance.

The will of the voters could undermine a recent appeals court decision that sided with state Attorney General Xavier Becerra, who sued the companies for misclassifying drivers as contractors in violation of AB5.

RELATED TOPICS:

DON'T MISS

Boeing’s Financial Woes Continue, While Families of Crash Victims Urge US to Prosecute

DON'T MISS

Police Tangle With Students in Texas and California as Wave of Campus Protest Against Gaza War Grows

DON'T MISS

Meet the Valley Republican Predicting a November Win Over Esmeralda Soria

DON'T MISS

Wired Wednesday: Construction Workers on 2018 Fresno Unified Project Still Not Paid

DON'T MISS

Slumping California Risks Losing World’s ‘5th Largest Economy’ Title

DON'T MISS

Ukraine Uses Long-Range Missiles Secretly Provided by US to Hit Russian-Held Areas, Officials Say

DON'T MISS

Upward Bound: Edison High’s Garcia Headed to Johns Hopkins

DON'T MISS

Boxing Star Ryan Garcia Wants to Meet Netanyahu, Pledges Aid for Gaza Children

DON'T MISS

Fong Won’t Debate Boudreaux, but We Get Hot Topic Answers Anyway

DON'T MISS

Legislation Pandering to Tribal Casinos Is a Bad Bet for Fresno Cardroom Employees

UP NEXT

Ancestry Website to Catalogue Names of Japanese Americans Incarcerated During World War II

UP NEXT

Sacramento Bee Accused of Mangling the Facts About Fish Caught in Pumps

UP NEXT

Google Fires More Workers Who Protested Its Deal With Israel

UP NEXT

CA Lawmakers Reject Bill Cracking Down on Utilities Spending Customers’ Money

UP NEXT

What Do Supreme Court Justices Say About Homelessness?

UP NEXT

Oprah Winfrey and Dwayne Johnson Pledged $10M for Maui Wildfire Survivors. They Gave Much More.

UP NEXT

Work Starts on Bullet Train Line From Las Vegas to LA

UP NEXT

Will CA Lawmakers Crack Down on Spending by Utility Companies?

UP NEXT

Los Angeles Mayor Karen Bass Safe After Suspect Breaks Into Official Residence, Police Say

UP NEXT

Newsom Wants to Make It Easier for Arizona Women to Get a California Abortion

Wired Wednesday: Construction Workers on 2018 Fresno Unified Project Still Not Paid

13 hours ago

Slumping California Risks Losing World’s ‘5th Largest Economy’ Title

13 hours ago

Ukraine Uses Long-Range Missiles Secretly Provided by US to Hit Russian-Held Areas, Officials Say

15 hours ago

Upward Bound: Edison High’s Garcia Headed to Johns Hopkins

Local Education /

17 hours ago

Boxing Star Ryan Garcia Wants to Meet Netanyahu, Pledges Aid for Gaza Children

17 hours ago

Fong Won’t Debate Boudreaux, but We Get Hot Topic Answers Anyway

17 hours ago

Legislation Pandering to Tribal Casinos Is a Bad Bet for Fresno Cardroom Employees

18 hours ago

About 1 in 4 US Adults Over 50 Say They Expect to Never Retire, an AARP Study Finds

18 hours ago

Biden Signs a $95 Billion War Aid Measure With Assistance for Ukraine, Israel and Taiwan

19 hours ago

Ancestry Website to Catalogue Names of Japanese Americans Incarcerated During World War II

19 hours ago

Boeing’s Financial Woes Continue, While Families of Crash Victims Urge US to Prosecute

Boeing said Wednesday that it lost $355 million on falling revenue in the first quarter, another sign of the crisis gripping the aircraft ma...

12 hours ago

12 hours ago

Boeing’s Financial Woes Continue, While Families of Crash Victims Urge US to Prosecute

12 hours ago

Police Tangle With Students in Texas and California as Wave of Campus Protest Against Gaza War Grows

CA District 27 Assembly candidate Joanna Garcia Rose
13 hours ago

Meet the Valley Republican Predicting a November Win Over Esmeralda Soria

13 hours ago

Wired Wednesday: Construction Workers on 2018 Fresno Unified Project Still Not Paid

13 hours ago

Slumping California Risks Losing World’s ‘5th Largest Economy’ Title

15 hours ago

Ukraine Uses Long-Range Missiles Secretly Provided by US to Hit Russian-Held Areas, Officials Say

Local Education /
17 hours ago

Upward Bound: Edison High’s Garcia Headed to Johns Hopkins

17 hours ago

Boxing Star Ryan Garcia Wants to Meet Netanyahu, Pledges Aid for Gaza Children

MENU

CONNECT WITH US

Search

Send this to a friend