Gig Economy Companies Celebrate California for Upholding Prop 22
On July 25, the California Supreme Court upheld Proposition 22, the voter initiative that allows gig economy companies to classify drivers for their delivery services as independent contractors rather than as employees.
As reported by the Los Angeles Times, the state’s top court rejected claims brought by a group of drivers and a major labor union that the law is unconstitutional because it interferes with lawmakers’ authority over matters dealing with workers’ compensation.
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Uber, Lyft, DoorDash and other gig companies had argued that their business models depended on the law being upheld and threatened to shut down in California if it was struck down.
The recent ruling marks the end of a years-long legal fight over Prop 22 that essentially carved out a new classification for workers who are entitled to limited benefits but not necessarily the array of rights granted to full-fledged employees.
In November 2020, nearly 60% of California voters passed Prop 22 so that app-based rideshare and delivery drivers could remain independent contractors while also being able to receive new benefits, including guaranteed earnings and access to a health care stipend.
Uber, Lyft, DoorDash and other companies poured upward of $200 million into the campaign to boost positive awareness of Prop 22, as reported the L.A. Times.
Many of these gig companies celebrated last week’s decision to uphold Prop 22. According to DoorDash, the ruling means that Dashers can continue to set their own hours, earn flexibly, and receive other benefits and protections the law provides them.
“As an app-based driver, today’s ruling is a huge sigh of relief and a win for California,” said Stephanie Whitfield, a Coachella Valley, Calif.-based Instacart shopper. “For years, special interests have been trying to take away our ability to remain independent contractors, despite voters overwhelmingly approving the law and drivers continually favoring the flexibility Prop 22 has allowed. I am so grateful to the tens of thousands of drivers like me who have tirelessly advocated over the years and to the California Supreme Court for doing the right thing.”
A December 2023 survey conducted by The Mellman Group found that California app-based drivers overwhelmingly support the law and strongly prefer to be independent contractors.
“Prop 22 is a testament to what can be done when we listen to drivers and couriers. With growing frequency, policymakers are shifting away from outdated discussions, based on a binary choice between employment with benefits, or independence with none,” according to a statement released by Uber. “Instead, an increasing number of policymakers worldwide — from New York state and Massachusetts, to Australia and Brazil — are actively engaging with drivers and couriers to develop innovative models that preserve their independence while also requiring important new benefits and protections. We stand ready to ensure that progress continues.”
“The California Supreme Court ruling is an overwhelming victory for voters’ rights and the integrity of our state’s initiative system,” said Protect App Based Drivers + Services spokeswoman Molly Weedn. “This ruling is not just a win for the nearly 1.4 million drivers who rely on the flexibility of app-based work to make ends meet, but for millions of consumers and thousands of businesses who rely on app-based services across the state. The courts have spoken, and this issue can finally be put to rest.”
However, this may not be the end of the debate. The International Brotherhood of Teamsters General President Sean M. O’Brien issued the following statement after the Prop 22 ruling:
"Whether you work for Uber, Lyft, or Amazon, you deserve overtime pay, paid sick leave, unemployment insurance and other basic worker protections that come with employment. It is dishonest and disrespectful that these multibillion-dollar corporations are denying workers much-needed benefits so they can skip out on taxes and make workers and taxpayers foot their bill. ... Despite the ruling in California, the Teamsters will continue to fight Big Tech’s crusade against the people who make them profitable and ensure that workers everywhere have the protections they deserve.”
