California's Proposition 22, which passed in November 2020, allowed gig companies like Uber, Lyft and DoorDash to classify their drivers as independent contractors rather than employees; a recent report from The Register said. The proposition was the result of a campaign that saw the gig companies contribute more than $225 million to lobbying funds in support of the law. Worker groups and some drivers opposed the proposition, arguing that it effectively rewrote labor law through the proposition process, making it harder for gig workers to access benefits such as sick leave, minimum wage and unemployment compensation. But despite this opposition, the proposition passed. 

A case against Prop 22 was launched by a group of Uber and Lyft drivers and the Service Employees International union shortly after the proposition was passed. California Superior Court Judge Frank Roesch ruled in August that Prop 22 was "constitutionally problematic," which was good news for the gig workers. But on March 13, the bid to overturn the proposition failed in appeals court when Roesch's ruling was overturned.

"Uber's vision for the future of work is a nightmare for the rest of us – one where they can cut our pay anytime, fire us with no explanation, and abandon us if we get injured," Jason Munderloh, leader of Gig Workers Rising, said in a statement, quoted by The Register. "Our vision is one where we're all paid enough to cover the bills, have time to spend with our families, and have real freedom in our jobs. We're seeing drivers all around the nation organizing for our vision, and today's ruling certainly isn't going to stop us."

The appeals court's decision is a significant win for gig companies, allowing them to continue treating their drivers as independent contractors. The companies argued that this model provides their employees the freedom to work when they want, as well as benefits like occupational accident insurance. Lyft released a statement praising the ruling, saying that Prop 22 "protects the independence drivers value and gives them new, historic benefits" and that the company was "excited to continue operating our service with no changes."

But critics argued that the gig economy model makes it harder for workers to access essential benefits such as sick leave, minimum wage and overtime pay. Additionally, gig workers are not entitled to state workers' compensation, and they cannot have set, regular hours. The Prop 22 ruling means that gig companies can continue to operate in California without having to provide those benefits to their drivers. It could also encourage other states to adopt similar laws that favor gig companies.

The original case against Prop 22, Hector Castellanos, et al v California, was brought by a group of Uber and Lyft drivers and the Service Employees International union soon after the proposition was passed in 2020. Along with other issues, the complaint alleged that the companies were illegally forcing their drivers to support the ballot measure.

The appellate panel that upheld the state law was divided, with two of the three justices finding that California does allow both the legislature and voters "lawmaking authority" over workers' compensation. But dissenting Justice Jon B. Streeter argued that Prop 22 should be invalidated "in its entirety" because it "presents a direct conflict between the voter electors' power to adopt initiative statutes and the legislature's power."

But the ruling does contain a silver lining for drivers. The justices struck down a clause in the proposition that put restrictions on collective bargaining by workers, which means that gig workers are still able to organize and negotiate for better conditions. The ruling also criticized anti-union clauses in the law, stating that allowing such clauses would "encourage gamesmanship and reward initiative proponents for drafting confusing, or even outright misleading, initiatives."

Despite the setback, gig worker groups are not giving up. In his statement, Munderloh also cited initiatives such as the Gig Work Transparency bill, which would require tech companies to make public how much drivers earn on each ride and what percentage of that amount goes to the business.

The Prop 22 ruling is a reminder of the ongoing debate over how gig workers should be classified and what benefits they should be entitled to. While gig companies argue that the independent contractor model provides workers with flexibility, critics say it makes it harder for workers to access essential benefits and also makes them more vulnerable to exploitation. As gig companies continue to grow and expand, the debate likely will only become more heated.