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 Associated Press race calls.
The companies, along with Postmates Inc. and Instacart Inc., collectively contributed around $200 million to support Proposition 22, a measure that allows them to bypass a state law intended to provide employee-like protections for their drivers. The campaign was the most expensive for any ballot measure in state history. With more than 60% of ballots counted, the vote was running 58% in favor of the measure and 42% against, prompting the Associated Press to project it would pass.
The outcome deals a blow to the state government, which has been embroiled in a high-stakes battle with the companies over the reclassification. A law passed last year sought to force ride-share and food-delivery companies to reclassify their drivers as employees, eligible for benefits such as minimum wage, paid sick leave and unemployment assistance.
The app companies’ business models are predicated on “gig workers”—independent contractors—to keep labor costs low.
None of the companies reclassified workers after the law went into effect on Jan. 1. Instead, they combined forces to support the ballot measure. The state sued in May to enforce the statute, litigation that will be superseded by the successful election outcome.
