California’s Proposition 22 is poised to pass, securing the current business model for gig economy companies.
California has tried to reclassify gig economy companies, such as Uber, Lyft and Doordash. The state previously passed legislation requiring the companies to classify their workers as employees, rather than independent contracts. Changing how their employees are classified would have a profound impact on the companies’ and their bottom line, as they would have be required to withhold taxes and provide benefits.
The companies tried fighting the legislation in court, but were unsuccessful. This left Proposition 22 as their best chance to continue operating in the state under their current business model.
The ballot, which had the most expensive campaign of any ballot measure in California history, is poised to pass by a comfortable margin. The fight over gig workers has been closely watched across the country, and will likely help set a precedent for how these companies will continue to operate.