California Voters Send a Message to the Gig Economy

Image Credit: chpua/E+/GettyImages

The national elections this week in the United States have understandably captured everyone's attention, but state and local races have produced big results with big implications for wide cross-sections of Americans. One such result comes out of California, where big tech companies and freelancers have both been fighting for more clarity about what gig workers can expect from platforms like Uber or TaskRabbit. Given the size of the state — and how many companies are based there — California's voters may have just spoken for those outside its borders too.

Proposition 22 arose from some long-running arguments in California about what precisely is the relationship between, say, a freelancer and a client (or, in this case, a rideshare driver and the app that connects them with passengers). It comes down to whether a freelancer or a driver or a delivery person is an independent contractor or, given how many hours and responsibilities these gigs can confer, actually an employee who deserves insurance, benefits, and other protections, which companies called business-killers. A state law called AB5, passed a few years ago, caused some panic nationwide when it seemed to limit how much work freelancers could do for a client before they could be considered employees.

Now Prop 22 has passed, in large part thanks to widespread lobbying by the likes of Uber and Lyft; drivers will remain independent contractors for now. The narrowness of the measure, and whether it can be applied more broadly within industries and in other states, could determine a lot about how the gig economy evolves from here.