Prop 22 Passes, a Victory for Uber, Lyft

Francesca Billington

Francesca Billington is a freelance reporter. Prior to that, she was a general assignment reporter for dot.LA and has also reported for KCRW, the Santa Monica Daily Press and local publications in New Jersey. She graduated from Princeton in 2019 with a degree in anthropology.

Prop 22 Passes, a Victory for Uber, Lyft

Uber, Lyft and other ride-hailing and delivery companies won their bid to keep drivers as independent contractors in what became the most expensive initiative in California history, with $200 million spent and led by the app-based services.

The initiative won decisively with 58% of the vote in a test for the tech-driven "gig economy" that is central to ride-hailing companies business model.


Uber, Lyft, Postmates and other app-based delivery giants overshadowed union opposition and pumped over $180 million into their effort to pass the measure. Its passage immediately sent stock of Uber and Lyft soaring.

Heather Foster, a spokesperson for Lyft, said the ballot measure sent a signal as the nation grapples with the rise of the gig economy.

"I think other states will be looking to see how they can work with us," she said. "Last night really solidifies this future of work...It's now a part of our economy."

Prop. 22 exempts ride-hailing and delivery companies from a new union-backed California law that requires their gig worker drivers be reclassified as employees.

Experts believed a loss could drive up labor costs 20% to 30%. And the companies would have had to dash their business models increasing costs and wait times for many riders.

The victory gives companies protections from the Democratic-leaning Legislature that passed the union-backed law demanding drivers be employees. The initiative requires a seven-eighths majority vote in the Legislature to be overturned and prevents drivers from unionizing.

But the ballot measure could have repercussions beyond how companies like Uber and Lyft classify their drivers.

Morgan Harper, an advisor at the American Economic Liberties Project, said it sets a "dangerous precedent," signifying to businesses with enough campaign money that they can create carve-outs from worker protection laws.

"The $200 million was spent to confuse people about what was going on in this proposition," she said. "Which was actually going to be more protective: the proposition or the law in place?"

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Spencer Rascoff

Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.

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Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

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Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

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InLA

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