As the country waited to see who the next President would be, gig economy companies like Uber and Lyft picked up a big win in California on election night. The companies, and others, poured millions into Proposition 22, and it was an investment that paid off.
Ever since California passed AB5, gig economy companies began their quest to get around the law. While the fight began in the courts, the cleanest attack they could make was through a ballot initiative. The Proposition, which passed on election day, creates an exemption for companies like Uber to treat ride share and delivery drivers as independent contractors, rather than employees, which is what AB5 had required of them. However, the companies will be providing additional benefits to workers, though these fall short of those given employees.
Earlier in the fall, it looked as though AB5 may have a drastic impact on these companies, with some threatening to leave the state all together. However, with Prop 22 passing their presence in the state is cemented, and an increase in the stock price of Uber and Lyft immediately after election day is a sign of what the passage means for the companies.
Meanwhile, critics have attacked the companies, arguing they are not providing enough protections for workers and accusing the companies of hijacking California’s ballot process and essentially buying their own exemptions from the determination of the legislature, through AB5, that their workers should be treated as employees.
With ever-changing requirements for employers in designating their workers, both federally on the state level, an experienced legal team can help navigate a potentially confusing and ever-evolving time for businesses, particularly with the ever-changing landscape for companies during the current pandemic.