Californians classify ride-hailing drivers as contractors

The state ballot measure will make drivers independent contractors according to California law that would supersede a new law intended to grant drivers full employment

Californians have determined the future of ride-hailing and delivery apps, with 58 per cent voting that drivers should be classified as independent contractors, rather than employees, according to results early Wednesday.

The state ballot measure, Proposition 22, will make drivers independent contractors according to California law. That would supersede a new law known as A.B. 5 intended to grant drivers full employment, including minimum wage protections, health care and such benefits as unemployment and sick leave.

The Washington Post projected early Wednesday the measure would pass, after sailing to a lead of 58 per cent to 42 per cent with an estimated 59 per cent of votes counted. The result means the gig companies defeated legislation to make drivers employees after running a record-spending $200 million (£153 million) campaign to deny workers employment.

Both sides of the debate treated Prop 22 as an existential battle. For labour advocates, it was about the precariousness of a growing economic class of workers. For corporate interests, it was about the viability of the gig economy business model, which has yet to prove profitable despite raising billions from venture capitalists and shareholders.

California’s decision on Prop 22 could be replicated around the country, something that has prompted such on-demand apps as Uber, DoorDash, Lyft and Instacart to turn this into the most expensive ballot campaign in state history. Those backing the effort had spent more than $200 million (£153 million) to beat the legislation by Monday, more than 10 times as much as Prop 22’s opponents.

Meanwhile, gig workers in California have been facing the most challenging era since the model emerged. They are navigating jobs upended by a pandemic, the economic downturn, social unrest, wildfires, plummeting requests for rides and surging demands for delivery.

Many say that after being enticed into the line of work by flexible hours and good pay, they feel they’ve been squeezed and marginalised after companies attract enough drivers to cut back what they pay.

With an estimated 1 million gig workers, California has been the largest US market for such labourers since app-based companies emerged a decade ago. Concerns over the treatment of those workers, and others without job projections, led California legislators to explore structural changes to the model.