⁍ Uber and Lyft are spending nearly $100 million on a California ballot initiative to overturn a state law that would compel them to classify drivers as employees.

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⁍ That sum looks less huge than the potential costs of complying with the existing law, according to a Reuters analysis.

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⁍ The two ride-hailing companies would each face more than $392 million in annual payroll taxes and workers’ compensation costs.

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– Uber and Lyft are spending nearly $100 million to fight California’s so-called ” gig worker” law, but a Reuters analysis shows that even if they drastically reduce the number of drivers in the state, they’d still be on the hook for more than $392 million in payroll taxes and workers’ compensation costs. The two ride-hailing companies would each face an additional $7,700 per full-time driver if Proposition 22 is passed, including around $4,560 in annual employer-based California and federal payroll taxes and some $3,140 in annual workers’ compensation insurance. The companies say they would need to significantly hike prices to offset those additional costs, which in turn would likely cause a decrease in consumer demand, but cushion the blow of the added costs to the bottom line. Uber and Lyft are trying to overturn California’s gig-worker law, known as AB5, which took effect in January. The companies say their workers are properly classified as independent contractors, because they can set their own schedules. Many drivers use the service to supplement income from other jobs. Under the company-sponsored ballot measure, so-called gig workers would receive some benefits, including minimum pay, healthcare subsidies, and accident insurance, but remain independent contractors not entitled to more substantial employee benefits. Democratic presidential candidate Joe Biden and his running mate, Sen. Kamala Harris, have both voiced their strong support for California’s labor law and directly called on voters to reject the companies’ ballot proposal that would weaken it.