California voters approve Prop 22, exempting gig work from labor law

Voters in California have overwhelmingly approved of the gig economy, according to CNBC and other poll-watchers. Proposition 22, which allows companies such as Uber and Lyft to classify workers as contractors instead of employees—exempting them from labor laws—was tallied at 60% with many votes counted.

While Uber and Lyft were able to raise gobs of cash from venture capitalists while private and have multi-billion dollar valuations on the public market, neither has reached profitability. That makes the contractor-driver model especially important to the businesses, allowing them to avoid costly benefits associated with employment, such as unemployment insurance.

The companies have warned they'd likely have to pass on increased costs of worker reclassification to consumers. Uber estimated in a blog post earlier this year that it would have to raise rider prices between 25% and 111% in parts of California to cover the costs.

The "No" campaign was buried by what must be one of the most expensive political campaigns in history not for a human candidate: more than $200m spent by Uber and other other firms that depend on gig workers.