California Prop 22 Vote Heralds Judgment Day for Uber, DoorDash

California(ˌkaləˈfôrnyə) Prop(präp) 22 Vote Heralds(ˈherəld) Judgment Day for Uber, DoorDash

The initiative(iˈniSH(ē)ədiv) would exempt(iɡˈzem(p)t) app-based companies from having to classify contractors(ˈkänˌtraktər) as employees(emˈploiē).

By Ellen Huet

The gig(ɡiɡ) economy is preparing for a reckoning(ˈrek(ə)niNG). California voters are set to pick sides during the Nov. 3 elections in one of the most fraught(frôt) debates(dəˈbāt) of today’s labor market: Are flexible working arrangements worth the trade-offs of weaker job security and fewer benefits? A state ballot(ˈbalət) measure, known as Proposition(ˌpräpəˈziSH(ə)n) 22, would exclude app-based companies from California’s new gig economy law, which makes it tougher for companies to classify workers as contractors rather than employees. If voters reject the proposition, the companies would have to start treating drivers as staff who are eligible(ˈeləjəb(ə)l) for benefits such as guaranteed minimum wages(wāj), paid sick days, and other standard protections.

Ride(rīd)-hailing apps Uber and Lyft and food delivery(dəˈliv(ə)rē) services DoorDash, Instacart, and Postmates sponsored(ˈspänsərd) the initiative, pouring a record $200 million into the campaign to convince voters that app-based drivers want to preserve their freedom and that an employee-based model would raise(rāz) costs for customers. The outcome—while legally(ˈlēɡəlē) binding only in California—could have ramifications(ˌraməfəˈkāSH(ə)n) across the U.S., potentially influencing states looking to tighten(ˈtītn) regulation of the gig economy, which has thrived(THrīv) in the era(ˈirə, ˈerə) of app-based work. Lawmakers from New York to Illinois(ˌiləˈnoi, ˌiləˈnoiz) who are also rethinking labor laws for gig and freelance workers may take a cue from California’s handling of Prop 22.

App-based companies have propelled “this longer-term trend away from stable full-time employment,” says Juliet(ˌjo͞olēˈet) Schor, a professor at Boston College who studies gig workers. “The dangerous thing about it is, the bigger this gig economy is and the more it undermines protections for workers, the more likely you see the reduction of those stable, secure(səˈkyo͝or) jobs.”