Uber and Lyft are Hoping California Passes Proposition 22

If Proposition 22 is passed in the state of California, it would mean that both Uber and Lyft would be maintaining their current business model.

The two ride-sharing companies have expressed that if the proposition does not pass, they would be forced to cut the number of workers and even raise prices for riders.

Shares of Uber and Lyft rose 4.2% and 7.3%, respectively on Monday as investors expect California voters on Tuesday to pass Proposition 22.

Proposition 22, if passed, would exempt ride-sharing and delivery companies from a new California law that forces such gig economy companies to reclassify their workers as employees rather than contractors, and offer benefits such as sick leave and unemployment protection.

If the Prop passes, it could also undermine the lawsuit California has brought against Uber and Lyft for allegedly violating that new law.

Both Uber and Lyft had threatened to shut down temporarily in California this summer over the issue but an appeals court extended a stay.

The companies have contributed most of the almost $190 million raised through mid-October to get Proposition 22 passed. The companies have also pushed for Proposition 22 in messages to users on their own apps.

According to a Yahoo! Finance article, opponents of the measure have spent around $14 million to defeat it.

“I’ve watched these companies turn a really good economy into an exploitative economy,” Steve Gregg, an Uber and Lyft driver, told Yahoo! Finance. “I’m just tired of watching billionaires and corporations exploiting people and that’s exactly what they’re doing. Now they’re just trying to make it legal.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.