Shares of Uber and Lyft soared Wednesday after California voters approved Proposition 22, which exempts app-based ride-hailing and delivery driving companies from classifying their workers as employees, allowing the firms to avoid providing basic—but costly—workplace rights and protections.
Uber stock was up more than 13% while Lyft shares surged 12% Wednesday following passage of Prop 22, which was by far the most expensive ballot measure in California history. Uber, Lyft, DoorDash, Instacart, and others outspent labor and progressive groups by more than 10 to 1, with proponents pouring a staggering $204.5 million into the “yes” campaign’s coffers against just $19 million for the “no” side.
The record spending delivered the desired results for the “yes” side as over 58% of California voters approved Prop 22. Had the “no” camp prevailed, so-called gig companies would have been compelled to provide worker rights and earned benefits including the state minimum wage, healthcare, paid sick leave, overtime pay, and reimbursement of some of the work-related expenses that claim a significant share of drivers’ income.
Morgan Harper, senior adviser at the American Economic Liberties Project, said in a statement that “Prop 22 is not just the most expensive ballot initiative of all time, it is also an egregious display of the ways dominant corporations use ill-won profits to entrench their power, shape public discourse, influence government policy, and avoid accountability.”
“Since they were established, Uber, Lyft, DoorDash, and Postmates have done all they can to exploit the workers who make their services possible,” added Harper. “From ignoring legislation like AB 5 and misclassifying their drivers as ‘independent contractors’ to brazenly plunging into market after market with zero regard for local taxi and limousine service regulations or emergency delivery fee caps, these dominant apps have shown time and again that breaking the law is a fundamental feature of their business model.”