Uber Technologies Inc., Lyft Inc. and DoorDash Inc. won a pivotal vote in California that exempts them from having to reclassify their drivers as employees, according to the Associated Press running calls.
The companies, along with Postmates Inc. and Instacart Inc., have collectively contributed around $ 200 million to support Proposition 22, a move that allows them to circumvent state law meant to provide similar protections to employees for their drivers. . The campaign was the costliest for any voting measure in the history of the state. With over 60 percent of the ballots counted, the vote was 58 percent in favor of the measure and 42 percent against, prompting the Associated Press to project it would pass.
The result is a blow to the state government, which has been embroiled in a high-stakes battle with the companies over reclassification. A law passed last year aimed to force ridesharing and food delivery companies to reclassify their drivers as employees, eligible for benefits such as minimum wage, paid sick leave and unemployment assistance.
The business models of application companies rely on “on-demand workers”, independent contractors, to keep labor costs low.
None of the companies reclassified their workers after the law came into force on January 1. Instead, they joined forces to support the voting measure. The state filed a lawsuit in May to enforce the statute, a dispute that will be replaced by successful elections.