California Proposition 22
While the American presidential election has been dominating political headlines recently, there are many other significant changes that will come as a result of the November 3 election. Investors should obviously be aware of the differences a Trump or Biden presidency will bring to the country, but they should also be watching other races to see what other changes could be implemented.
Many states have consequential propositions on their ballots, and one of the most significant of these is Proposition 22 in California. Voters will decide whether gig-economy workers can be independent contractors or must be classified as employees. The results will have massive implications for companies like Uber, Lyft, DoorDash, Instacart and others that utilize independent contractors as drivers, so these companies have poured more than $180 million into supporting their cause.
Both Uber and Lyft threatened to shut down operations in the state when an August court ruling stated they had to treat their drivers as employees, and other companies that use independent contractors as drivers have threatened to do the same if Proposition 22 does not pass.
A bad result for the ride-hailing services could totally shake up how the businesses operate. Polls currently show about a fourth of voters are undecided about how they will vote, so this is something to watch over the next few weeks.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.