Voters in California have passed legislation which means drivers for companies such as Uber will carry on being classed as independent contractors rather than employees. Proposition 22, which was passed on Wednesday, means that workers are still classed as self-employed. This was supported by Uber, Lyft and DoorDash.
In the run up to the vote, both Uber and Lyft had threatened to pull their services from California if the decision was made that drivers should be classed as employees.
As a result of the vote, Uber has seen a massive increase in the value of their shares. When the stock markets in the US opened on Wednesday, stocks were trading 15% up. Lyft saw a similar increase, with their share value gaining 13% after the announcement was made.
Labour groups had opposed the proposal. Instead, saying that workers should have the right to minimum wage, health insurance and expenses amongst other employee benefits.
Although the labour groups didn’t see the win they were hoping for, the new ruling did come with some concessions. There is now a minimum earning standard which has been set at 120% of the minimum wage. Drivers will also be covered by healthcare and accident insurance.
In a statement about the results, Uber said: “Today, California voters agreed that instead of eliminating independent work, we should make it better.”