Uber, Lyft and other app-based ride-hailing and delivery services spent $200 million in a winning bet to circumvent California lawmakers and the courts to preserve their business model by keeping drivers from becoming employees eligible for benefits and job protections.
The titans of the so-called gig economy bankrolled the most expensive ballot measure in state history, which was decided Tuesday with 58% of more than 11 million voters choosing to keep drivers classified as independent contractors able to set their own hours.
Shares of both companies rose Wednesday after the huge victory.
The outcome was a defeat for labor unions that had pushed for a state law aimed directly at Uber and Lyft, mandating they provide drivers with protections like minimum wage, overtime, health insurance and reimbursement for expenses.
Supporters of Proposition 22 said the outcome showed voters wanted to preserve the flexibility of the current system. Opponents said the companies had bought their own law and vowed to continue fighting for drivers’ rights.