Uber and Lyft win big in California

While California may be resolutely Democrat when it comes to politics, its electorate has voted to keep the state out of the lives of rideshare drivers.

As part of the US general election process, which still hangs in the balance at time of writing, California voters were asked if they wanted to define app-based transportation (rideshare) and delivery drivers as independent contractors and adopt labour and wage policies specific to app-based drivers and companies. The alternative was for the state to designate them as employees, thus entitling them to a lot more employment rights.

The ‘yes’ campaign, to maintain rideshare drivers’ current contractor status, won 58% of the vote. This is certainly good news for companies like Uber and Lyft, which would have had to pay their drivers more, but it also seems to be a positive development for the drivers and their customers too.

People use ridesharing because it’s cheaper than traditional taxis and minicabs, it’s as simple as that. If Uber and Lyft cost the same as taxis then there would be little point in them. Now California residents won’t have this budget option taken away from them.

As for the drivers, each have their own unique circumstances, but it seems likely that they chose that profession precisely because the barriers to entry are so low and because their contractor status gives them maximum flexibility. Not only does this mean they can adapt their driving work around other commitments, it also allows them to work for several ridesharing firms simultaneously.

Lastly this feels like a victory for the individual. Nobody is forcing anyone to become an Uber driver and they know terms and conditions going in. If someone wants to work as a part time contractor then what business is it of the state (in both senses) to question that decision. This is also a victory for the digital economy over those who resist it.

Here’s the message Uber CEO Dara Khosrowshahi is sending to drivers on the matter.