The US state of California has voted to hand ride hailing startups Uber and Lyft a big victory — and labor unions a big setback — after okaying a measure allowing the ride-hailing companies to keep classifying their drivers as independent contractors, and not employees.
NPR reported that for Joe Renice, who drives for Uber in San Francisco, the measure’s passage was a relief.
“This is a job that I make over $100,000 a year doing. And I have complete and total freedom and flexibility to do that,” he said.
The measure, known as Proposition 22, cements the business models of transportation and food delivery apps, which pay workers for the services they provide on demand. If the measure had failed, the companies would have had to abide by a new state law that says gig workers should be considered employees, and therefore entitled to costly benefits such as unemployment, health insurance and paid sick leave.
Proposition 22 does mandate that the companies offer drivers some new benefits, including stipends to buy health insurance, accident insurance and some guaranteed level of pay. Still, it’s a far cry from the standard benefits most employers in the state must offer their permanent workers.
Renice says most people know what to expect when they start driving for the app companies.
“We know going in this is a tradeoff,” he said, adding that he is willing to give up benefits like a set salary, retirement savings and insurance “for the ability to do this when and where and how I want to do it.”
But, he acknowledged, “it’s not for everybody. Some people are better off being employees. Not me.”
The companies supporting the measure leaned heavily on drivers who share Renice’s view to make their case to voters. They blanketed the state with TV, radio and internet ads featuring drivers talking about why they support the measure.
If somehow Californians failed to see those ads, they were likely to catch the messages that came by text, on flyers in mailboxes and on delivery bags used for takeout. The companies even used their own apps to lobby drivers and passengers, sparking a lawsuit from some drivers.
In all, Uber, Lyft and the food delivery app DoorDash spent more than $200 million in support of Proposition 22, making it the most expensive ballot measure campaign in California history.