Opinion: Uber's ballot victory doesn’t fix gig economy’s big problem

This would be a good time for Uber to show some real leadership. — AFP

Uber Technologies Inc and Lyft Inc won a big victory on a state ballot measure that could have threatened their businesses by changing their relationship with workers. But this positive result doesn’t mean the ride-hailing giants won’t face more battles elsewhere. They can use this reprieve to do something about an issue that needs to be resolved for the gig economy to function.

On Nov 3, California voters approved Proposition 22, which allows gig economy firms to classify their workers as independent contractors instead of employees as required by state labor laws. Before the vote, the industry had argued they would be forced to shutter their services or dramatically raise prices if they lost, citing the inability to pay for the type of benefits awarded to full-time employees such as overtime, unemployment insurance and healthcare. Shares of Uber and Lyft surged by more than 11% on Nov 4 as investors celebrated the status quo for the companies’ cost structures.