A judge reversed the state’s most expensive ballot measure, which classified ride-hail drivers as independent contractors.
The stock price at some gig companies took a hit Monday after a California judge struck down a ballot measure that exempted companies like Uber and Lyft from classifying drivers as employees. DoorDash’s stock price fell almost 2% to $180 a share Monday morning, while Lyft’s price dipped 1% to $45.50 a share, before rebounding in the afternoon. Meanwhile, the S&P 500 gained 1% on Monday. Investors were reacting to a Friday court ruling from Alameda County Superior Court Judge Frank Roesch, which overturned the state’s Proposition 22 and ruled that it was unconstitutional. Prop 22 shielded app-based ride-share and delivery companies from a state labor law that requires most companies to classify drivers as employees rather than as independent contractors. Independent workesr aren’t eligible for benefits and job protections such as paid sick leave or unemployment insurance, making them much cheaper to hire than traditional employees. Almost 60% of state voters in November after Uber, Lyft and other services spent with a massive publicity campaign, making Prop 22 the most expensive ballot measure in state history. Uber said it plans to appeal Roesch’s ruling, setting up a fight that could likely end up in the California Supreme Court months from now. Proposition 22 will remain in force pending the appeal. But if it is overturned, Lyft, DoorDash, Uber and other platrorm companies would be required to treat drivers as employees, providing benefits such as paid sick leave and paying into safety net programs on their behalf.
