In a blow to Uber, Lyft and other companies based on the gig worker economy, Proposition 22, a ballot which was passed in favor of Uber and Lyft and allowed them to continue classifying their drivers as individual contractors as opposed to company employees, has been deemed unconstitutional by a superior court judge.
Companies based on the gig economy like Uber and Doordash have been fighting to preserve the current working arrangement, where all their workers are classified as individual contractors using their services instead of employees that are a part of its workforce. The companies argue that this allows the drivers to set their own working environment, and choosing when and how to work. This, in turn, benefits the worker.
However, groups opposed to this norm want Uber and Lyft to be forced to classify their workers as company employees. They argue that this is a tactic to get out of paying employee benefits like healthcare, paid off days etc., allowing companies to exploit these people for their own reward.
Both parties involved have been trying to reach for a settlement in their favor for a long time. First, the union groups managed to get the AB-5 law passed, which ensured that gig economy workers are entitled to minimum wage, workers’ compensation and other benefits. This resulted in Uber and Lyft almost leaving California as a whole.
Later on companies like Uber and Lyft managed to secure a win in Proposition 22 in December of last year, overturning the AB-5 bill.
However, now it looks like the scales have tipped once again, after the Prop 22 bill was deemed unconstitutional by a judge.
“Today’s ruling by Judge Roesch striking down Proposition 22 couldn’t be clearer: The gig industry-funded ballot initiative was unconstitutional and is therefore unenforceable,” said Bob Schoonover, President of SEIU California State Council in a statement. “For two years, drivers have been saying that democracy cannot be bought. And today’s decision shows they were right.”
While this ruling will definitely be appealed, today will be registered as a win for gig economy union groups.