Following the passage of Proposition 22 in November 2020, California voters granted ride-hailing companies like Uber and Lyft an exemption from Assembly Bill 5 (AB5), impacting the classification of gig workers. This led to a recent settlement addressing misclassification concerns for the years 2016 to 2020.

In a statement to Ars Technica, Lyft’s CEO David Risher celebrated the outcome, emphasizing that most rideshare drivers wished to maintain their status as independent contractors. “Voters affirmed this desire with the passage of Prop 22, which has provided drivers with enhanced benefits while allowing them the flexibility they value,” he noted. Risher also claimed that Lyft has exceeded the requirements set by Proposition 22 by implementing a fee cap, asserting the company’s compliance with the law regarding driver classification.

However, reactions to the settlement have been mixed. Veena Dubal, a law professor at the University of California, Irvine and a vocal critic of dominant ride-sharing platforms, expressed reservations about the implications of this agreement. In her view, while California’s regulatory actions against these major companies deserve recognition, the settlement amount remains inadequate compared to the potential earnings owed to drivers. “Their wages could have supported families with essential needs like rent and food,” Dubal stated, highlighting the limited financial restitution available to low-income, primarily immigrant, and minority workers impacted by the system.

Recent movements among gig workers indicate a growing momentum for better compensation and working conditions. In August, California’s labor board officially recognized the California Gig Workers Union, formed after Governor Gavin Newsom signed legislation that enabled such unions. This marks a significant step towards collective bargaining and strengthening workers’ rights in the gig economy.