A California judge ruled Uber and Lyft's controversial 2020 ballot measure as costly and unconstitutional.
The measure exempts firms from classifying their workers in the state as employees and keeping them as independent contractors.
Uber and Lyft's Prop 22 Measure is Unconstitutional
According to a report by the San Francisco Chronicle, Superior Court Judge Frank Roesch from Alameda County found that Proposition 22, or Prop 22, illegally limits the power of a legislature to define drivers of ride-hailing companies as workers that are subject to compensation law.
Proposition 22 took effect in California when the majority of the people voted in its favor in last year's elections.
According to CNN, companies were legally obligated to classify their gig workers as full-time employees eligible for workers' benefits under Assembly Bill 5 or AB5, which was passed in 2019.
However, some companies, like the ride-sharing firms, continued to treat their drivers as contractors. Uber, Instacart, Lyft, and DoorDash invested over $220 million into campaigning for Prop 22 just to overturn AB5, and the campaign worked.
The Prop 22 measure requires gig companies to give their contractors healthcare benefits and a minimum wage floor, but it also exempts them from classifying their workers as full-time employees with complete protection and benefits.
Those in favor of the proposition stated that it would allow workers to keep their independence while still having benefits that they did not have in the past. However, not everyone is satisfied with the proposition's development.
A group that includes the SEIU California State Council and the Service Employees International Union sued the state in an attempt to overturn the proposition.
Roesch's ruling specifically singled out Section 7451 of the proposition, which states that any future law connected to collective bargaining for app drivers must comply with the rest of the proposition.
Roesch wrote in his decision that the proposition only protects the company's economic interest because it divides the ununionized workforce, and it should not be the goal of the legislation.
The judge also found the whole proposition unconstitutional because any amendment to the measure needs a seven-eighths vote of approval to pass the state Legislature.
If the ruling continues, Uber, Lyft, and other companies with contractual workers may need to spend millions to pay for healthcare and other benefits for their drivers. At the moment, Prop 22 is still in effect, and ride-hailing companies are already planning to appeal.
A spokesperson for Uber told The Chronicle that the ruling ignores the will of the majority of California voters, and it defies the law. The spokesperson added that Uber would file an appeal, and they believe that they will win.
Meanwhile, Prop 22 is still in effect, including all of the benefits and protection it provides for independent workers across California.
A Different Take in the UK
Uber may be having issues with its drivers' classification in the United States, but it tells a different story in the United Kingdom, according to CNBC.
Uber now treats all of its 70,000 drivers in the U.K. as workers as employees, and they are all entitled to holiday pay, minimum wage, and pension plans.
In March, the U.K.'s Supreme Court ordered that drivers be classified as workers and not independent contractors.
Meanwhile, in June, Uber accidentally sent an email to its drivers in California stating that it will pay for its drivers' health insurance, but it turns out to be a mistake.
This article is owned by Tech Times
Written by Sophie Webster