California Allows Uber's Gig Economy to Live Another Day
The approval of Proposition 22 will protect app-based companies and help safeguard the growth of city centers.
Ride-hailing apps are a key part of the new urban economy.
Photographer: Philip Pacheco/AFP via Getty Images
Defying expectations, California voters have approved Proposition 22, which exempts so-called gig economy companies — companies like Uber Technologies Inc. and Lyft Inc., as well as grocery delivery services — from a state law that requires them to classify their workers as employees. Instead, ride-hailing and food-delivery app companies will be able to keep their workers as independent contractors, meaning those workers get fewer benefits and won’t be required to earn minimum wage.
The ballot measure is sure to dismay advocates of higher labor standards. Strangely, it comes at a time when many states and cities are raising their minimum wage and requiring companies to give employees various other benefits. While the result might be simply a function of a well-run corporate ad campaign, it might also reflect a general anxiety about the future of cities. Gig economy services aren’t just a source of extra work; they’re coming to be an essential part of modern urban economies. And with those urban economies under threat, voters may be reluctant to jeopardize the fragile equilibrium.