A California superior court on Friday ruled Proposition 22
unconstitutional. The ballot measure, approved
by California voters in November 2020, classified gig workers as
independent contractors. The new ruling deals a major blow to Uber, Lyft and
other ride-hailing services, who intend to appeal the decision. "We will
file an immediate appeal and are confident the appellate court will uphold Prop
22," the Protect App-Based Drivers and Services Coalition, which includes
Uber and Lyft, said in a statement
The November 2020 approval of the measure was a victory for ride-hailing
companies, who spent millions to promote it. "We believe Prop 22 was the
right outcome for riders and drivers of Uber," Uber CFO Nelson Chai said
in the company's Q4 earnings call.
Uber cited the approved measure as contributing factor to
controlling its price increases and continued presence in California. "The
price increases are manageable when compared to the 100-plus increase
associated with traditional employment, [which] would have seen us exit most
markets in California—and not just us, but our other competitors as well,"
Chai said.
Should the ruling stand, Uber and other ride-hailing
companies may have to decide whether to follow through on such statements.