Ride-hailing, delivery giants win fight against labor law

OAKLAND » App-based companies like Uber, Lyft and Doordash have dodged a potentially devastating blow to their industry by carving out an exemption from a California law that required them to classify their drivers as employees instead of contractors.

California voters passed Proposition 22 and delivered a stinging rebuke to state lawmakers and labor leaders who were fighting for better working conditions for a growing number of people who drive for ride-hailing and food delivery services.

California has one of the strictest laws in the country for determining when a company must treat its workers as employees with benefits such as minimum wage, overtime and sick days. Uber, Lyft, Doordash, Instacart and others sought to get out of those requirements, and after failing in court, succeeded in convincing voters to give them an exemption from most of the year-old law’s provisions.

A record $200 million spending spree by the companies and their supporters helped them win the vote. The investment yielded a huge return for Uber and Lyft, whose combined market value climbed by $10 billion on Wednesday.

Supporters applauded the outcome, saying drivers would be able to maintain their independence while accessing new benefits such as a guaranteed minimum wage and health care subsidies.

James Patterson, a Sacramento retiree who drove four years for Lyft but now does deliveries for DoorDash and Postmates, prefers the freedom of being able to make his own schedule.

“You can just work when you want and stop whenever you want,” he said. “And as someone who is retired, it’s nice to get a little supplemental income whenever you need it.”