California Supreme Court to Decide Future of Gig Economy with Prop 22 Ruling

The legal debate surrounding how to properly classify workers within the gig economy has made its way to the California Supreme Court as it prepares to deliberate on the legality of Proposition 22. 

Proposition 22 is a measure that allows app-based companies like Uber and Lyft to classify their drivers as independent contractors rather than employees.  

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This legal classification has been the subject of lawsuits in other states, exempts drivers from receiving certain benefits typically afforded to employees — such as minimum wage, overtime pay, and expense reimbursements. 

According to a report published by Reuters, Proposition 22 was passed by nearly 60% of California voters in November 2020, following a $200 million campaign by app-based companies. However, the Service Employees International Union and four drivers have challenged the measure, arguing that it is unconstitutional because it limits the legislature’s power to include gig drivers within the scope of California workers’ compensation law. 

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The case, which will be heard in San Francisco, will play a big role in the broader national debate over the rights and classifications of gig workers. The outcome of the California supreme court case will set further precedent for how gig workers are classified across the U.S. 

Ride share companies, which have traditionally benefited from the legal status of gig workers, have come under fire in recent months with a slew of court cases and legislation in Europe, the U.K., Australia, and in the U.S.    

For example, on May 1, ride share giants Uber and Lyft decided to halt operations in the city of Minneapolis, due to the city’s new minimum wage ordinance for rideshare drivers. There, lawmakers passed legislation establishing minimum wages for drivers.  

Notably, supporters of Prop 22 argue that the flexibility of being an independent contractor is critical for many drivers — allowing them to balance work with personal responsibilities. 

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