California court upholds Prop. 22 ruling on gig workers, Apple delays bonuses

Yahoo Finance tech editor Dan Howley discusses how California’s court ruling on Prop. 22 is boosting ride-share stocks Uber and Lyft, while Apple reportedly delays bonuses amid cost assessments.

Video transcript

SEANA SMITH: Well, rideshare companies Uber and Lyft getting a big win in the California appeals court Monday. They, along with the delivery apps like DoorDash and Seamless, can now treat their drivers as independent contractors. Here to tell us a little bit more about what that means for the gig economy is Yahoo Finance's Dan Howley. And, Dan, certainly a huge victory here for some of those larger players.

DAN HOWLEY: That's right. Uber, Lyft, DoorDash, companies like that are basically getting a win here with the appeals court upholding proposition 22. That allowed the companies to basically assign their employees, or, rather, drivers as not employees, but as gig workers, contractors. And so they don't have to provide them with the kinds of benefits they would for full time workers. Proposition 22 was originally considered unworkable by the Superior Court, but this appeals court panel of three judges went ahead and said, no, there are some provisions in it that we don't like, but, by and large, this can stand.

And so now going forward, it looks like Uber and Lyft, DoorDash, and the like, any kind of gig company can really classify their workers as gig workers, meaning that they don't have to pay out for things like medical care, full time employment benefits like days off, and that like. That doesn't mean this is the end of the story, though. This is likely to go to California's Supreme Court, where we'll see an alliance of different organizations on behalf of drivers really try to get this overturned and do away with Prop 22 in its entirety.

DAVE BRIGGS: Uber investors certainly happy with that ruling. Meanwhile, Apple looking to trim some costs. What can you tell us there, Dan?

DAN HOWLEY: Yeah, it looks like they're freezing some hiring, and then also cutting back, or at least rearranging the schedule by which they provide some bonuses and incentives along those lines. This is something that Apple is doing in lieu of laying off employees. At least that's the way it looks for now.

This is a company that, unlike the likes of Amazon, Google, Microsoft, Meta, hasn't had to do mass layoffs. There aren't thousands of workers out of jobs. So they're holding off on hiring. They're doing that freeze. And then those bonuses basically ensuring that they have the cash on hand that they need.

Apple, unlike its peers in the space, didn't staff up as heavily during the pandemic. All of those other companies seemed to think that we were going to stay in the kind of pandemic lifestyle, glued to our chairs, not going outside, staying perpetually online. Look, we're still online a lot but, not nearly as much maybe as we were during the pandemic.

Apple, they're a hardware company. They also sell services, but the other companies really focus on software sales, online, things like that. So that's where they went wrong. Apple seemingly made the right call. And so far, at least, they haven't had to do any layoffs.