WASHINGTON, Aug 23 (Reuters Breakingviews) - Uber Technologies' (UBER.N) effort to avoid treating drivers as employees has hit a pothole read more . A California Superior Court judge said on Friday that a measure affecting gig-economy workers approved by the state's voters is unconstitutional because it limits the power of California's legislature.
Nearly 60% of Golden State voters last year approved Proposition 22 , which exempted certain companies from having to recognize drivers as full-on employees provided they get some benefits like healthcare. That's a middle way that allows Uber, smaller rival Lyft (LYFT.O), food-delivery app DoorDash (DASH.N) and grocery service Instacart to avoid higher costs . Similar initiatives are under way elsewhere, like in Massachusetts.
The new ruling puts that effort on a shakier footing. It will be appealed to higher courts and, for now, Prop 22 remains in effect. But President Joe Biden’s pro-labor administration presents another hurdle, while in May Uber for the first time recognized a trade union to represent drivers read more . Gig-economy employers may yet lose their cut-price ride. (By Gina Chon)
On Twitter http://twitter.com/breakingviews
Capital Calls - More concise insights on global finance:
Italy’s Fincantieri flags bigger defence ambition read more
Antipodean petrol deal runs low on fuel read more
Salmon producers caught in feeding frenzy read more
M&S turnaround wards off buyout vultures read more
Sydney Airport fails to upgrade buyout defence read more
Reuters Breakingviews is the world's leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Sign up for a free trial of our full service at https://www.breakingviews.com/trial and follow us on Twitter @Breakingviews and at www.breakingviews.com. All opinions expressed are those of the authors.