Uber and Lyft are celebrating a win in California exempting them from the state’s controversial gig economy bill.
Californians voted 58% in the Proposition 22 ballot to exempt ride hailing drivers from the AB5 law.
It means drivers will remain as independent contractors, rather than employees, and Uber and Lyft are off the hook for nost health carebenefits, full minimum wage protections and sick leave for drivers.
"Today, California voters agreed that instead of eliminating independent work, we should make it better," Uber said.
Prop. 22 is expected to come into effect from 16 December.
Critics of the ride sharing companies say victory at the ballot box was bought due to their deep pockets.
"Two hundred million plus is much cheaper from their perspective than paying the employees these benefits that the legislature has established for them," said William Gould, former chairman of the National Labor Relations Board.
In contrast, labor unions funded their ‘No on 22’ campaign with about $20 million.
Although victorious, Uber, Lyft and other delivery app services will make some concessions to worker benefits under promises made on their Prop 22 campaign.
Among them is guaranteed minimum earnings, some healthcare subsidies, and accident insurance.
Unlike noraml company employees, they won’t get sick pay, family leave, or unemployment insurance.
Written by Ray Montgomery, US Editor
