Uber, Lyft, and DoorDash workers in California to retain independent contractor status as Supreme Court upholds Proposition 22

In a significant legal development, Uber, Lyft, and DoorDash workers in California will retain their status as independent contractors after the state’s Supreme Court upheld Proposition 22. This decision is seen as a victory for ride-hailing and food delivery companies, which campaigned extensively for Prop 22 to avoid reclassifying gig workers as employees. The ruling supports the business model of these app-based services and preserves the flexible work structure that many drivers prefer. This is prepared by SSP.

Prop 22 guarantees gig workers some protections, such as earning 120 percent of the local minimum wage for driving hours, health insurance stipends, and reimbursement for job-related injuries. However, these benefits do not match the comprehensive benefits workers would receive if classified as employees.

After voters passed Prop 22 in 2020, a lawsuit challenging its constitutionality was filed by a group of drivers. Although a judge initially ruled the law unconstitutional in 2021, an appeals court reverted this decision in March 2023. With the California Supreme Court's recent reaffirmation that Prop 22 does not violate the state constitution, the legal tussle has seemingly come to an end.

Uber, Lyft, and DoorDash have endorsed the ruling. Uber emphasized that Prop 22 has delivered more than $1 billion in direct benefits to its workers, while Lyft noted that many drivers believe the proposition has positively impacted them.

Critics, however, contend that Prop 22 undermines labor laws. Lorena Gonzalez, President of the California Federation of Labor Unions, expressed disappointment, arguing that tech companies have altered social contracts to the detriment of workers. Moreover, there are concerns that earnings, when adjusted for expenses like maintenance and insurance, fall short of even minimum wage standards.

DRV opponents of Prop 22 maintain that the earnings guarantees and mandated benefits are insufficient. Health care subsidies and other benefits are challenging to qualify for, leaving many drivers without essential support. For example, healthcare subsidies require 15 or 25 active hours per week for partial or full stipends, respectively.

This decision concludes an extensive legal debate, yet labor rights activists continue to push for better worker protections in other states. Instances include Massachusetts implementing higher minimum wages for drivers and resolutions for legal complications in New York City.

Ultimately, Prop 22's upheld status could influence similar legislation across the nation, potentially altering the landscape of gig work significantly.