California Judge Strikes Down Ballot Measure That Let Uber, Lyft Treat Drivers As Contractors

Friday night, a state court judge ruled that a California ballot initiative that would allow companies like Uber or Lyft to continue treating their drivers as independent contractors instead of employees is against the state constitution. This ruling was a blow for gig companies who overwhelmingly supported the measure.

Johan Nijman is a for-hire driver that runs his own...[+] service as well as driving for Uber. He dropped off passengers at the Broadway play and drove through Manhattan's West Side on Wednesday, August 8, 2018. Getty Images

The Key Facts

After a lawsuit by SEIU California, Frank Roesch, Alameda County judge, ruled that Proposition 22, which exempted drivers of gig economy companies from a state requirement that they be identified as employees was unenforceable. Roesch ruled that the ballot initiative was unconstitutional as it restricts the state's ability to establish workers compensation rules. Roesch also attacked a section in Prop. 22 which limits the ability of lawmakers to collectively bargain in future, Roesch argued that it violates a California rule prohibiting ballot initiatives from covering multiple topics. Protect App-Based Drivers & Services Coalition is a group that supports Prop. 22 condemned Roesch's decision as seriously flawed and promised to appeal. It also stated that it expected the ruling to be stayed after the appeal is filed. SEIU California stated in a Friday evening tweet that rideshare companies were trying to increase their profits by undermining democracy, the state constitution and other democratic principles.

Important Background

Prop. Prop. 22 states that drivers of ride-hailing apps and delivery apps such as Uber, Lyft, and DoorDash can be considered independent contractors. The law exempts gig workers, but it provides drivers with other benefits such as wage floors and subsidies. The measure's supporters, which include gig companies, claim it allows drivers to have the flexibility of normal employees. However, opponents argue that it denies gig economy workers key benefits such as time off and health insurance. Nearly 59% of Californians voted for the measure last November after a contentious campaign that saw more than $200 million in spending.