California voters have approved Proposition 22, which classifies app-based drivers for companies such as Uber and Lyft as independent contractors instead of employees.
With more than two-thirds of the state's precincts reporting, the measure was ahead by a 58-42 margin - more than 6.3 million votes in favor to 4.5 million opposed.
The campaign was the most expensive ballot measure in California history, with more than $204 million contributed for lobbying and advertising efforts - most of it by the rideshare companies who had threatened to leave the state if the law wasn't changed. The yes side had raised about $189 million in contributions.
The measure was a response by rideshare companies to a law passed by the California state Legislature which classified app-based drivers as employees.
AB5 forced companies like Uber, Lyft and Doordash to reclassify how they employ and pay contract workers.
The rideshare companies have seen ridership plummet during the coronavirus pandemic. They threatened to shut down until November but stopped short.
Even while the campaign was underway, a state appeals court ruled against the rideshare companies, reaffirming that they must reclassify their employees.
Uber and Lyft say their drivers favor independence by a four-to-one margin, and an overwhelming majority favor the initiative.
Proposition 22 would guarantee an hourly wage and some benefits. If it passes, drivers would remain as independent contractors, but be provided with some benefits, health care subsidies, accident insurance and driver background checks.
But the No on 22 campaign says drivers are being denied real protections and benefits.
The mostly union-backed No campaign raised about $5 million.
The Yes campaign, with major contributions from Uber, Lyft and Doordash, raised more than $180 million -- putting Proposition 22 in the top rung of fundraising.