After an appeals-court decision this week, California ride-hailing drivers and other gig workers will remain independent contractors instead of employees for the foreseeable future — a win for gig companies that they will surely try to replicate around the country and beyond. Gig companies such as Uber Technologies Inc.
and Instacart spent more than $200 million to put Proposition 22 on the state ballot in 2020, saying in many television, radio and other ads that app-based drivers and couriers would get new benefits and still be able to set their own schedules. More than half of the state’s voters, or 58%, voted for the measure. A judge ruled it unconstitutional in 2021, though there was no emergency stay and it stayed in effect.
This week, an appeals court in San Francisco reversed that decision, mostly upholding Prop. 22 — though the issue is likely to be appealed to the California Supreme Court. Prop. 22 promised gig workers some benefits they didn’t have before, including the ability to qualify for a healthcare stipend and disability insurance. It also promised guaranteed pay of 120% of minimum wage for “engaged” time, which is the time a gig worker is actually making a delivery or completing a ride. In the more than two years since Prop. 22 took effect, the companies and some workers’ groups have released conflicting studies about its effects. Most recently, the companies — without disclosing many details — say the law has helped gig workers, while the workers themselves give it mixed reviews. See: Uber, Lyft drivers say new California law isn’t solving their healthcare needs Eduardo Romero drives for Uber and Lyft in the Los Angeles area and is a board member at Rideshare Drivers United. He has been a ride-hailing driver since 2017, and driving for the apps has been his only source of income for the past three years, he told MarketWatch on Thursday. Though he says “things changed for the worse” after Prop. 22, he acknowledged that he now receives a healthcare stipend, which amounts to $1,274 every three months. “That does help,” Romero said. “But now the cost of living is much higher, and the companies are charging passengers more but we drivers are making less.” Uber and Lyft, under pressure from shareholders to turn a profit, have raised the cost of their rides over the past couple of years. The companies’ “take rates,” or the amount they keep per ride, have …