After only a few days since the passage of Proposition 22, which now permanently exempts rideshare and delivery drivers from the AB 5 contractor limiting law, benefits from the decision have already become apparent for both the companies and drivers alike.
The rideshare and delivery companies, which spent over $200 million combined to pass Prop 22, now don’t have to worry about any upcoming court challenges or orders to follow AB 5, as Prop 22 trumps it due to coming from a public vote. Stock prices have also climbed, with upcoming IPOs of DoorDash and InstaCart showing greater financial improvement and investor confidence in the last 48 hours.
“If Prop 22 didn’t pass, there’s a very good chance that they would not have made it to the stock market,” explained New York-based Investing Consultant Ben Baum to the Globe. “Demand for both next year shot up Wednesday, and a lot paused trades on Lyft and Uber went through.
“This vote was literally holding everything up and kept these companies financial futures in the last few months hostage. And both companies are based in San Francisco. This means a lot more tax money coming in for the state too. Speaking strictly financially, everyone wins by allowing these companies to not have to classify everyone as employees. Governments get more taxes, companies become stronger, investors get to make more, and workers get more employment opportunities, a minimum-earning baseline, and a stable company to work for.”
For many drivers, the last few days have been a massive sigh of relief, with many drivers reporting an improvement in their lives and mental health since the election.
Rideshare driver anxiety over passing Prop 22
“I was looking at changing jobs, which in this economy, is like voluntarily going out of work for several months,” said driver and Yes on 22 volunteer Rebecca Lopez in an interview with the Globe. “A lot of us were. A lot of us, meaning Latina moms who drive for Lyft and Uber, have our own Facebook group, and we’ve been stressing over this for months. We wanted to remain contractors because we have kids and need to work our lives around them while still also wanting to work.”
“Most of us lost sleep over this. Many of us didn’t know what we would do. A few of us even had to go to the doctor and got prescriptions for Valium and Xanax. All because some stupid politician thought we all wanted to be employees.”
“This is what they weren’t showing you in those ads. A lot of drivers are single parents and single people needing to make ends meet, and a lot of us have stressed over this.”
“To us, this wasn’t about some ‘big bad corporations’, what, buying a law I think they tried to claim? No, this was our livelihood which benefited us greatly by letting us work our own times and be independent. They just didn’t understand because they were never in our shoes.”
“Since it was passed, people are already feeling better. A few haven’t renewed their prescriptions. It’s getting back to normal.”
Another rideshare driver, Stephen Tan of San Jose, agreed with Rebecca.
“You probably think we’re super-liberal up here and all the rideshare drivers driving in parades to not pass this, but really, a lot of us were against it,” said Tan. “[AB 5] was threatening to us. It would have made us employees, but who knows how many they would have kept? Who would have taken more expensive rides? We would have been taxi drivers in all but name.”
“A bunch of riders up here had been super depressed about that. And I mean literally. I live in an apartment building with other drivers in it, and some couldn’t make it out of bed because their depression at losing their job had hit them that bad.”
“These are stories that the people against [Prop] 22 didn’t want you to know about, about how even the thought of it not passing could put a lot of drivers into a tailspin of worry.”
“And guess what. When I went out Thursday, those same drivers who stayed in because of their chronic depression? They were out again driving, because they knew their jobs were safe.”
The success of Prop 22 has also affected people outside of California and Wall Street. Many similar groups currently trying to pass legislation similar to AB 5 have been reporting hardships in the last few days, with some organizations calling the success of Prop 22 something that they cannot recover from.
DoorDash and Instacart will likely have IPOs sometime next year.
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