LOS ANGELES: Uber, Lyft and other app-based ride-hailing and delivery services spent USD 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 per ceent of more than 11 million voters choosing to keep drivers classified as independent contractors able to set their own hours.
Shares of both companies surged 11 per cent to 13 per cent before the opening bell 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.
San Francisco-based Uber and Lyft had threatened to pull out of California if they lost.
They got additional support in the fight from DoorDash, Postmates and Instacart, which all could have had their businesses upended if it failed.