California court rules Prop 22 unconstitutional, dealing blow to Uber, Lyft

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Uber Lyft stickers on car [credit: Sundry Photography/Shutterstock.com]
The November 2020 approval of the measure was a victory for ride-hailing companies, who spent millions to promote it. Photo Credit: Sundry Photography/Shutterstock.com

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.

Source: Business Travel News

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