Uber and Lyft Shares Surge After California Approves Prop 22
Uber and Lyft shares surged after California voted to continue classifying drivers as independent contractors, according to MarketsInsider.
Uber shares jumped as much as 18 percent, while Lyft surged as much as 22 percent.
The passage of Proposition 22 exempts Uber and Lyft from a state labor law called Assembly Bill 5 that passed last year and would label drivers as employees. Classifying drivers as employees would force Uber and Lyft to pay a minimum wage and provide unemployment benefits and health insurance.
Uber, Lyft, Instacart, Postmates, and Doordash combined for a $200 million push supporting Proposition 22. This made it the most expensive ballot-measure campaign in California history.
Proposition 22 will still require some fundamental changes such as vouchers for subsidized health insurance and minimum hourly earnings, but not nearly as much as Assembly Bill 5. Many threatened to leave the state if Assembly Bill 5 was enforced and ride-hailing companies argued that it would negatively impact their business models.
Uber and Lyft have maintained their flexible employment standards in California for now.