Uber, Lyft Shares Soar After California Voters Pass Proposition 22

By Tyler Durden

According to the Associated Press, gig economy companies Uber Technologies Inc., Lyft Inc., and DoorDash Inc. have prevailed in their expensive quest to keep drivers classified as independent contractors.

California voters approved Proposition 22 Tuesday evening, which would exempt gig-economy companies from a state law requiring them to classify their workers as employees. The ballot measure mandates that these companies’ drivers will receive new benefits, such as hourly earnings of some sort but will not receive the full suite of employment protections that comes with normal jobs.

Uber and Lyft, along with other gig-economy companies, spent more than $200 million to fund “Yes on 22,” the costliest ballot measure in state history. Uber and Lyft have threatened to leave the state if they lost.

According to AP, with more than 10.8 million votes counted, Prop. 22 had 58.1% approval.

Uber shares soared 14% while Lyft rose 15% premarket Wednesday upon the passage of Prop. 22.

Uber 

Lyft

“The reaction from investors Wednesday reflects not just the stakes in California but also expectations of what will happen elsewhere. Officials in New York, Illinois, and other states have also considered bolstering labor protections in the gig economy,” Bloomberg noted.

Backers of Prop. 22 included  Uber, Lyft, Instacart, DoorDash, other gig-economy companies, the California Chamber of Commerce, the California Police Chiefs Association, and the California NAACP.

Democratic presidential candidate Joe Biden, activist group Gig Workers Rising, California Teachers Association, and Service Employees International Union were among some of Prop. 22’s opposition.

Passing of Prop 22. means Uber and Lyft will remain California-based companies. As for the gig economy workers, they must continue to operate as independent contractors who are not entirely entitled to all of the standard employment protections.

Source: Zero Hedge