Uber Thanks California

Amongst all the election noise yesterday, Gig economy tech companies received a big boost after California approved Prop. 22 which prevents the likes of Uber and Lyft from classifying their drivers as employees. This is big news for these companies, the Uber share price popped 12% in pre-market trade after the news was announced.

Uber had threatened to cut back heavily in California if they were forced to classify their drivers as employees. They only had room to employ 280 000 workers versus the current 1.4 million that operate there. Uber are most relieved because the drivers won't be able to Unionise.

The whole point of the Gig economy is to provide people with a platform to work for themselves. Uber drivers may not get certain benefits but they have the freedom to work for themselves. Some may argue that the work would not be there at all if it weren't for the flexibility of the system.

Uber has come out with a statement saying that they now have more room to give drivers healthcare and insurance benefits. Well done California. We expect this to set a good tone for other jurisdictions and their treatment of the Gig economy.