Uber, Lyft shares jump as California set to pass gig-worker ballot measure

[November 04, 2020]  By Tina Bellon and Munsif Vengattil

(Reuters) - Shares of Uber Technologies Inc and Lyft Inc jumped in premarket trading on Wednesday, as Wall Street cheered the app-based firms' projected victory in their battle to set the terms of the gig economy they have helped create.

Voters in California backed a ballot proposal by Uber and its allies that cements app-based food delivery and ride-hailing drivers' status as independent contractors, rather than employees.

According to state figures, 58% supported the measure, with nearly 95% of precincts at least partially reporting. The results are incomplete and must also be certified.

Uber's shares rose 12%, while Lyft jumped 16%. The companies, along with DoorDash, Instacart and Postmates, have collectively poured more than $205 million into the campaign.

The ballot measure, known as Proposition 22, marks the culmination of years of legal and legislative wrangling over a business model that introduced millions of people to the convenience of ordering food or a ride online.

While the proposal maintains workers' status as independent contractors, it provides them with some benefits, including minimum pay rates, healthcare subsidies and accident insurance.

Uber in an email to California drivers on Tuesday night said it looked forward to providing the new benefits as soon as possible and would offer more details in the coming weeks.

"The future of independent work is more secure because so many drivers like you spoke up and made your voice heard - and voters across the state listened," the Uber email said.

A group of labor organizations that organized a campaign to oppose Proposition 22 with a fraction of the companies' funding on Tuesday night called the Yes campaign deceitful.

"The end of this campaign is only the beginning in the fight to ensure gig workers are provided fair wages, sick pay and care when they're hurt at work," Art Pulaski, Executive Secretary Treasurer of the California Labor Federation, said in a statement.

(Reporting by Tina Bellon and Munsif Vengattil; Editing by Shinjini Ganguli and Alistair Bell)

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