Lyft Co-founder and President John Zimmer told CNBC’s Jim Cramer that the renewed legal fight regarding California’s Proposition 22 and the classification of workers will be on the side of his company, as well as other firms entrenched in the gig economy, CNBC reported.
“As this goes to higher courts, the appeal court in California, we’re extremely confident that the proposition will be upheld,” Zimmer said in a “Mad Money” interview.
Zimmer pointed to the company’s robust quarterly results, solid demand for its services and its laser focus on transporting people from one point to the next, which he said is an advantage over the company’s rivals.
The snag to Proposition 22, which excused Lyft and similar firms from having to classify its workers as employees — was handed down on Friday, August 20, when Alameda County Superior Court Judge Frank Roesch ruled that the measure was in violation of state law. The ballot measure had been approved by 59% of state voters last year.
The judge wrote in his ruling that Prop 22 is in violation of California’s state constitution because “it limits the power of a future Legislature to define app-based drivers as workers subject to workers’ compensation law.”
Lyft, Uber, DoorDash, and other digital platforms operating across the gig economy backed Prop 22 with millions of dollars to help ensure its support in the November 2020 election. The platform firms held fast to the argument that forcing them to make all workers employees would lead to higher prices for consumers.
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