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Gig Workers To Remain Independent Contractors In California

Voters in California have approved Proposition 22 and drivers for Uber (UBER), Lyft (LYFT) and other app-based ride-hailing and delivery services will remain independent contractors instead of employees.

State law AB5 which went into effect at the beginning of the year made it difficult for gig companies to classify their workers as independent contractors. Under Proposition 22, gig companies are obliged to provide some benefits such as vouchers to access subsidized health insurance, however the benefits are significantly scaled back from those provided under AB5.

Gig companies spent more than $200 million in support of Proposition 22. The enormous amount of money spent is justified by what was at stake for ride share and meal delivery platforms, as the AB5 state law forced them to consider leaving the state. Shares of Uber and Lyft both closed up by over 10% after the results were announced.


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