Lyft and Uber Drivers Challenge California Law – Proposition 22

Mar, 2021 - By SMI

Proposition 22 that was passed by the California ballot was challenged by a group of drivers as they were excluded from the employee benefits which are provided by their company.

Proposition 22 was passed by the California government which states that certain drivers working for application-based transportation and delivery companies will be considered as independent contractors and won’t be receiving the employee benefits like overtime pay, paid family leave, sick days unemployment and potential union membership. The proposition is also known as the labour legislation which was passed by the ballot of California during the state election on November 3, 2020 by a majority of 58%. The proposition was mainly backed by Lyft and Uber and supported by Door Dash, Postmates and Instacart. The companies have spent about US$ 200 million to support the preposition.

The schedule of the drivers of application based transportation and delivery companies are flexible and they are allowed to work on their own schedules, which according to the current system, is classified as gig workers. Thus the proposition was passed in the ballot when it was presented by Lyft and Uber.

A group of drivers opposed this proposition as it takes away employee benefits. They have filed a lawsuit directly in the high court to challenge the proposition. Many labour unions have also joined the drivers to support them and have spent US$ 20 million to oppose this measure. The companies have suggested this proposition keeping only the profit in mind and not labour welfare. Whereas the proposition has some alternative benefits for the independent contractors like minimum wage pay and subsidies for health insurance if they work for more than 25 hours per week. But those alternative benefits are not enough for the drivers as they want the full employment benefits.