Uber, Lyft and other app-based ride-hailing and delivery services prevailed at the ballot box in their expensive gamble to keep drivers classified as independent contractors.
The titans of the so-called gig economy bankrolled the most expensive ballot measure in California history to exempt drivers from being classified as company employees eligible for benefits and job protections.
The measure had more than 58% of the nearly 11 million votes counted so far.
See the latest election results
Proposition 22 pitted the gig companies, including DoorDash, Postmates and Instacart, against labor unions. More than $225 million was spent — the vast majority by the companies.
The ballot question overrides lawmakers and the courts to keep drivers independent and able to set their own hours. If the companies’ had lost, it would have upended their business model and San Francisco-based Uber and Lyft had threatened to pull out of California.
The landmark state labor law known as AB5 threatened to upend the app-based businesses, which offers flexibility to drivers to work whenever they choose. But drivers forgo protections like minimum wage, overtime, health insurance and reimbursement for expenses.
Labor-friendly Democrats in the Legislature passed the law last year to expand a 2018 ruling by the California Supreme Court that limited businesses from classifying certain workers as independent contractors.
Uber and Lyft maintain that their drivers meet the criteria to be independent contractors, not employees. They also argue the law didn’t apply to them because they are technology companies, not transportation companies, and drivers are not a core part of their business.
State Attorney General Xavier Becerra took the companies to court and an appeals court recently upheld a ruling by a San Francisco Superior Court judge who said the companies need to treat drivers as employees subject to the new employment standards.
Proposition 22 exempts app-based transportation and delivery companies from the labor law to keep drivers independent contractors not required to receive overtime, sick leave and expense reimbursement.
It also will put in place policies that require those companies to provide “alternative benefits,” including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week.
Prop. 15 trailing
A ballot measure to partially dismantle California’s longtime system of tying property taxes to the last sales price was trailing narrowly Tuesday with several million votes still to be counted.
No votes on Proposition 15 were ahead by about 2.5 percentage points with 11 million votes counted. It could take days or even a week or more to count enough remaining votes to determine a winner.
The measure would reassess commercial and industrial properties every three years. Residential property would remain under current rules.
Since a 1978 ballot measure — Proposition 13 — sparked a national outcry for tax cuts and helped pave Gov. Ronald Reagan’s path to the White House, California has limited tax increases to 2% a year for inflation until a property is sold. With prices climbing at a much higher rate, taxpayers who have held homes and businesses for many years pay far less than what the market value would determine.
Other propositions:
Prop. 14 – A proposition that would keep alive California’s first-of-its-kind stem cell research program with a $5.5 billion infusion of borrowed money had a narrow lead. With about 11 million votes counted, approval for Proposition 14 was ahead 51% to 49% late Tuesday night.
Prop. 16 – A ballot measure to reinstate affirmative action in California government is failing. The “no” votes had more than 55% of more than 11 million votes counted so far. Public polling had indicated that Proposition 16 was struggling, suggesting that voters may not be ready to repeal a quarter-century-old ban on affirmative action.
Prop. 17 – Voters decisively passed a ballot measure restoring the right to vote for felons on parole. Proposition 17 will change the state Constitution to allow an estimated 50,000 felons to vote.
Prop. 18 – Proposition 18 was trailing Tuesday. It would allow 17-year-olds to vote in primaries if they turn 18 before the general election.
Prop. 19 – The measure held a narrow lead early Wednesday morning. It would allow homeowners to have more flexibility in how they can transfer their tax assessments.
Prop. 20 – Voters defeated a ballot measure that would have blunted criminal justice changes designed to ease mass incarceration by reducing penalties and allowing for earlier release.
Prop. 21 – California voters rejected a measure that would have allowed cities to expand rent control. Proposition 21 would have let cities limit rent hikes on properties that are more than 15 years old. “No” votes led early and the lead expanded to 59% after more than 10 million ballots were counted.
Prop. 23 – A ballot measure to require a doctor or highly trained nurse at each of California’s 600 dialysis clinics was shot down by voters. With more than 9 million votes tallied Tuesday, Proposition 23 had just 37% of votes.
Prop. 24 – A measure to expand California’s digital privacy law has maintained its lead with 11 million votes counted. Proposition 24 was leading with 56% of the vote as of early Wednesday but it was still too early to call the contest.
Prop. 25 – Early returns showed voters favored keeping the current cash bail system and the criminal justice reforms they approved in previous elections. With more than 6 million votes counted for Proposition 25, about 54% voted against the measure, which would replace cash bail with risk assessments for those awaiting trial.
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