Uber Technologies Inc.,
and DoorDash Inc. won a key vote in California allowing them not to reclassify their drivers as employees, according to Associated Press calls.
Companies along with Postmate Inc. and Instacart Inc., which jointly contributed approximately $ 200 million to support Proposition 22, a measure that would allow them to bypass state law to provide employee-like protections to their drivers. The campaign is the most expensive for any voting measure in state history. With more than 60% of the votes counted, 58% voted for the measure and 42% opposed, leading the AP news agency to predict it would pass.
The result dealt a blow to the state government, which was embroiled in a high-stakes war with companies over reclassification. A law passed last year seeks to force car-sharing and food delivery companies to reclassify their drivers as employees, eligible for benefits such as minimum wages and paid sick leave. and unemployment benefits.
The application firms̵7; business models are based on “performer workers” —the subcontractors — to keep labor costs low.
No company reclassified workers after the law went into effect on January 1. Instead, they combined forces to support the voting measure. The state sued in May to enforce the statute, the litigation will be replaced with successful election results.
Stakes are very high for companies: The reclassification will weigh heavily on their already red bottom lines and set the precedent for other US states to challenge their business models.
In recent months, car-sharing and delivery companies have launched advertisements and push notices to drivers, saying only a small fraction of them will be hired as employees. Fewer drivers will mean longer wait times, they say in messages to customers, and prices will increase due to the higher costs associated with reclassification. Uber CEO Dara Khosrowshah demonstrated that the cost of travel services could double if the voting measure fails.
California law is at the center of flexible work restrictions; Firms are free to structure a model where interests and flexibility go hand in hand, lawmakers say.
Companies argue that it’s impractical to extend employee benefits to multiple drivers working for them only a few hours a week. They also said the reclassification would force drivers to work in scheduled shifts, robbing them of the freedom they currently enjoy. More than half a dozen drivers interviewed said they planned to vote in favor of the company because that message resonated with them.
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To make their ballot more palatable, the companies said if it passes, they will secure a number of new protections, including health insurance for drivers who work less. at most 15 hours a week, occupational accident insurance and 30 cents per mile of driving. Opponents of this measure report that these benefits are not equal to those awarded to full-time employees.
The ballot measure can only be amended with a seven-eighth majority of both houses of the state legislature, a threshold never seen in previously passed voter laws in California.
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