Californians Vote to Keep App-Based Delivery Drivers as Independent Contractors

The people (of California at least) have spoken, and assuming the current projection holds, app-based delivery drivers for services like DoorDash, Uber Eats, and Instacart do not have to be treated like employees; they are independent contractors.

With over two-thirds of the vote currently in, more than 58 percent of Californians have voted "Yes" on Proposition 22 which, as the ballot states, "Exempts App-Based Transportation and Delivery Companies from Providing Employee Benefits to Certain Drivers." The Associated Press has projected that the measure will pass—a huge victory for major players in the restaurant and grocery delivery industry including Uber and their forthcoming acquisition Postmates, along with DoorDash, and Instacart. Uber—the only public company of the group—saw its stock price jump over 13 percent at the opening bell.

Prop 22 was a direct reaction to the passage of last year's Assembly Bill 5 (AB5)—which placed the burden of proof on companies to either prove their workers were independent contractors or instead classify them as employees and provide them with the corresponding labor protections—rules which technically took effect at this beginning of this year. However, these tech giants essentially chose to ignore the rules, instead placing their eggs in the Prop 22 basket. Lawsuits followed, intended to get these companies to comply, but those legal battles would now appear to be a moot point.

"Passing Prop 22 is a big win for Dashers, merchants, customers, and communities. Californians sided with drivers, recognizing the importance of flexible work and the critical need to extend new benefits and protections to drivers like Dashers," DoorDash co-founder and CEO Tony Xu said in a statement provided to Food & Wine. "Now, we're looking ahead and across the country, ready to champion new benefits structures that are portable, proportional, and flexible. It's what workers want and provides the protections and benefits they deserve. We look forward to partnering with workers, policymakers, community groups, and more to make this a reality."

The big victory didn't come without a big price: The Wall Street Journal reports that the four delivery giants above—along with ride-hailing service Lyft—spent around $200 million to promote the proposition, the most expensive campaign for any ballot measure in California history. However, the result will likely save the companies money moving forward, and in theory, for consumers, keep the prices they're paying for these services down, too—though it seems California state officials believe any savings come at the cost of employees' wellbeing.

In September, California took action to curb other business practices by delivery apps, when Governor Gavin Newsom signed into law the Fair Food Delivery Act which, among other regulations, requires apps the have permission to feature a restaurant on their platform.