Rideshare and delivery companies Uber (NYSE:UBER), Lyft (NASDAQ:LYFT) and DoorDash have won a hotly contested measure that exempts them from a California law requiring them to classify contract workers as employees who are entitled to benefits.
Shares of Uber and Lyft soared more than 14% in pre-market trading Wednesday after California voters, in the most expensive ballot initiative in state history, approved a ballot measure exempting gig-economy companies from the state labour law.
Almost 58% of voters were supporting the proposition versus 42% against, with more than 80% of the vote reported, according to the California Secretary of State’s Office.
The ballot victory means that drivers for Uber, Lyft and DoorDash, and other gig economy companies, won’t be eligible for full employment benefits and protections as lawmakers had intended. Uber and Lyft alone will save more than $100 million U.S. a year on employment costs.
At stake in the vote was the future of these app-based companies, which use armies of independent contractors to deliver takeout and drive passengers.
The fight’s importance was reflected in the financial contributions. DoorDash, Instacart, Lyft, Postmates and Uber together spent $200 million U.S. on the campaign, making it the costliest ballot measure in state history.
