By Joel Rosenblatt, Robert Wilkens-Iafolla and Erin Mulvaney
In one fell swoop, Uber Technologies Inc. and Lyft Inc. on Tuesday fended off labor protections that were decades in the making, allowing the companies to keep compensating their drivers as independent contractors.
By design, very little will change under the ballot measure approved by California voters that was underwritten by the ride-hailing companies, along with Instacart Inc., DoorDash Inc. and Postmates Inc.
While Proposition 22 requires these app-based transportation services to offer some modest new perks for drivers, it protects them from having to provide much costlier benefits that full-time employees get. The measure was leading 58% to 42% with 71% of the vote counted.
For the companies, that makes the more than $200 million they and their supporters spent on the ballot measure campaign — a record for the most populous state — worth every penny, according to William Gould, a professor at Stanford Law School.
“Two hundred million plus is much cheaper from their perspective than paying the employees these benefits that the legislature has established for them,” said Gould, a former chairman of the National Labor Relations Board under President Bill Clinton.
