Uber, Lyft Shares Fall After Judge Rules Proposition 22 Is Unconstitutional

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Alameda County Superior Court Judge Frank Roesch on Friday ruled that California's 2020 ballot measure exempting rideshare and food delivery drivers from a state labor law is unconstitutional because it infringes on the Legislature's power to set workplace standards.

Roesch wrote Proposition 22 is unconstitutional because "it limits the power of a future Legislature to define app-based drivers as workers subject to workers' compensation law."

A provision in the initiative that prevents the Legislature from granting collective-bargaining rights to drivers is unconstitutional because it "appears only to protect the economic interests of the network companies in having a divided, ununionized workforce," he wrote. Shares of Uber Technologies (UBER) are down 4% to $38.35 in premarket trading while Lyft (LYFT) is down 4% to $43.93.