Uber and Lyft cruised to a big victory in California. Voters said yes to Proposition 22, which allows drivers for app-based transportation and delivery companies to be largely classified as independent contractors. The drivers would not receive benefits granted to employees but they would receive perks such as minimum earnings and vehicle insurance.
The proposition supporters outspent opponents by about $200 million to fewer than $20 million, according to tallies compiled by Ballotpedia. Several gig economy apps, including DoorDash, Instacart and Postmates, backed the measure in addition to Uber and Lyft. Uber, incidentally, is acquiring Postmates.
“Yes on 22” led with 58% of the vote when the Associated Press called the race after 11 p.m. on Tuesday night. The ballot measure needed more than 50% of the vote to become law.
“California has spoken, and millions of voters joined their voices with the hundreds of thousands of drivers who want independence plus benefits,” said Geoff Vetter, a “Yes on 22” campaign spokesman.
“With the passage of Prop. 22, app-based ride-booking and delivery drivers across the state will be able to maintain their independence, plus have access to historic new benefits, like a minimum earnings guarantee and health care.”
Uber and Lyft successfully lobbied that their companies are more technology platforms as opposed to transportation providers.
The measure was seen as Uber and Lyft’s last hope in California to continue business under the status quo. The companies had warned they’d have to increase costs to consumers. An L.A. Times story published Wednesday said Uber estimated in a blog post earlier this year that it would have to raise rider prices by 25% to 111% in parts of California.