NUMBER OF THE DAY

Uber and Lyft’s Big Election Payday, by the Numbers

Gig platforms in California won’t have to treat their workers as employees

Photo illustration, source: Robyn Beck/AFP/Getty Images

$13 billion: That’s how much Uber and Lyft gained in combined market value on the stock market after Californians voted to approve Prop 22 on Tuesday, allowing them to reclassify their drivers as independent contractors, according to Business Insider.

That’s an incredible return on investment for the ride-sharing companies who, along with DoorDash, Postmates, and Instacart, spent roughly $202 million on a campaign for a yes vote on the ballot measure, making it the most expensive initiative in California’s history. By contrast, the opposition camp, led by labor unions, raised just $19 million for their campaign.

Prop 22 was sold by the gig platforms as a compromise of sorts: a way to keep their workers classified as independent contractors but provide them with a few benefits, like a pay floor. At OneZero, Sarah Kessler explains the specifics of Prop 22 and how it evolved from gig platforms’ efforts to conceive a new category of employment.

If Prop 22 had failed and Uber and Lyft had been forced to classify their drivers as employees, the already-unprofitable companies would have had to fundamentally change their business models to accommodate labor protections such as minimum-wage laws, paid breaks, and the workers’ right to unionize. Under such conditions, Uber planned to restrict operations to just four areas in the state.

That gig-economy companies say classifying their workers as employees would make their operations unsustainable speaks to the weakness of these gig platforms’ business models. In September, Marker interviewed Juliet Schor, a sociologist and the author of After the Gig, a deeply researched book on gig-platform workers, who argued that Uber could afford to classify its drivers as employees if it were willing to charge its customers more.

“Uber could have still had a business,” she said, “but it was attempting to wipe out all the competitors, including public transportation.”

Gig platforms sure can throw a lot of money at not paying their workers more.

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