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Uber says it may promote laws similar to Proposition 22 outside California

November 09, 2020

Uber Technologies Inc. (NYSE: UBER) CEO Dara Khosrowshahi said Uber will more loudly promote new laws such as Proposition 22 that was approved by California voters last week. Proposition 22 allows companies such as Uber and Lyft Inc. (NASDAQ: LYFT) to continue classifying their drivers as independent contractors.

“We should be adding benefits to gig work to make it better, not getting rid of it altogether in favor of an employment-only system,” Khosrowshahi said in a conference call with analysts. “That’s why going forward, you'll see us more loudly advocate for new laws like Prop. 22, which we believe strike the balance between preserving the flexibility that drivers value so much while adding protections that all gig workers deserve.”

Uber reported in a 10-Q filing with the US Securities and Exchange Commission that a preliminary injunction that would prohibit it from classifying drivers as independent contractors will not go into effect as a result of the law’s passage. California’s attorney general had sued Uber and Lyft saying the companies were misclassifying their drivers as independent contractors under California’s AB 5 bill that gets tough on misclassification.

Uber expects Proposition 22 to take effect this quarter.

In addition to allowing app-based drivers to remain independent contractors, and not employees, the proposition:

  • Establishes a guaranteed minimum earnings floor for drivers.
  • Provides for occupational/accident insurance for injury protection.
  • Provides a subsidy for healthcare expenditures of app-based drivers.
  • Establishes due process provisions and protection against discrimination and harassment.

According to the latest preliminary results, California voters approved Proposition 22 by 58.5% to 41.5%.

Proponents contributed $205 million to pass the measure, TechCrunch reported. The outcome of the vote was watched outside of California as well, including Toronto, The Star newspaper reported.