By Preetika Rana and Christine Mai-Duc

Uber Technologies Inc., Lyft Inc. and DoorDash Inc. are spending tens of millions of dollars and flooding voters with messages in a neck-and-neck battle to preserve their current business model in California.

The companies, along with other gig-economy giants like Postmates Inc. and Instacart Inc., have contributed nearly $200 million to persuade voters to approve a ballot measure that would exempt them from a new state law requiring businesses to reclassify contract workers as employees. That amount, the most ever raised for a California ballot question, according to Ballotpedia, suggests how pivotal the vote will be for companies reliant on a labor model in which workers are summoned at the touch of an app.

The opposition, which has raised far less -- roughly $19 million, largely from labor unions -- says the companies have flourished on the backs of gig workers without providing them the protections that most employees receive.

Victory for Uber, Lyft, DoorDash and others would let stand the companies' business models in their home state of 40 million people. If voters reject the Proposition 22 measure, the companies would be compelled to offer their drivers broad employment benefits, such as minimum wage, paid sick leave and unemployment assistance, that would weigh heavily on their already money-losing bottom lines.

Defeat for the companies in their home state also could set a precedent for battles in other U.S. states and in other countries where the gig-worker model has been challenged. Uber was forced to reclassify its food-delivery drivers as employees in Geneva last month. Massachusetts sued Uber and Lyft over alleged driver misclassification in July.

Having to classify gig workers as employees would severely limit the companies' operations in a lucrative market. Uber has internally discussed operating in just three jurisdictions, including the San Francisco Bay Area and Los Angeles, if the ballot measure fails, according to a person familiar with its plans.

Analysts say Uber and Lyft stocks could also tank. The companies, already struggling to turn a profit, estimate they would each need to invest hundreds of millions of dollars to develop the infrastructure needed to support drivers. DoorDash, also unprofitable, plans to go public later this year.

Despite the millions spent on advertising and messaging, voter sentiment on Proposition 22 is roughly even. A poll released Monday by the Institute of Governmental Studies at the University of California, Berkeley, found 46% of likely voters said they would support the measure and 42% said they would vote against it. The gap is within the poll's margin of error of plus or minus 2 percentage points.

The companies' campaign said it is on track to spend more than $82 million on television and radio ads by Election Day. Opponents say they expect to spend more than $11 million on ads by then.

The California law targeted by Proposition 22 was signed by Democratic Gov. Gavin Newsom late last year and went into effect Jan. 1. The gig companies combined forces to seek an exemption after attempts to reach a compromise with unions and lawmakers failed.

Uber, Lyft and the other companies argue that the law would end drivers' ability to set their own schedules, a core benefit of working for on-demand platforms. While the law doesn't forbid flexible scheduling, Geoff Vetter, a spokesman for the companies' campaign, said it doesn't outline a realistic framework either.

"What other examples of an employment situation exist where employees can choose when they work, how long they want to work, and the ability to work for competitors almost simultaneously? It frankly doesn't exist, " Mr. Vetter said.

Uber says part-timers account for most of its drivers. In the last three months of 2019 -- the last full quarter before the coronavirus pandemic -- less than 10% of its California drivers were online for 40 hours or more a week, the standard for full-time U.S. employees. Those drivers accounted for a quarter of trips.

In recent weeks, Uber has bombarded its drivers in California with in-app messages stating that the company would hire only three out of every 10 drivers as employees, limit time off and force them to drive in designated areas if Proposition 22 fails. Riders get a message before each trip warning of rising prices, longer wait times and less reliable service if the measure doesn't go Uber's way.

DoorDash and Instacart customers have found "Yes on Prop 22" fliers inside their packages.

The companies have made more than $10.2 million worth of nonmonetary contributions to the Yes on 22 campaign, including in-app messages and emails to drivers and users. If Proposition 22 succeeds, the companies are guaranteeing new protections to freelance drivers, such as 30 cents per mile driven, health-care subsidies to those who work at least 15 hours a week and occupational-accident insurance coverage while on the job.

Critics say those protections fall short of the benefits full-time employees are entitled to. The Internal Revenue Service mileage rate employers typically use to reimburse employees is 57.5 cents per mile.

"It's not the right time to cheat essential workers out of protections they desperately need," said Steve Smith, a spokesman for the California Labor Federation and the No on 22 campaign. "They're out there, putting their health, even their lives, at risk by continuing to work."

California's labor unions, which hope to organize gig workers if they become employees, have relied on text messaging and phone calls to counter the companies' TV ad spending.

"Just the sheer volume of messaging they're able to get out through television is unlike anything I've ever seen," said Mr. Smith.

In a typical election year, Mr. Smith's organization would aim to contact voters in a union household two to three times, including once in person. On Proposition 22, he said, their goal is to reach them six to eight times, in part because advocates are canvassing less in person because of the pandemic.

Stacey Grumet, a 43-year-old entrepreneur who lives in Los Angeles, says she isn't a fan of the existing law because it limits her ability to hire freelance workers. But, she says, the tech companies' aggressive campaign turned her off and she plans to vote against the measure.

"If they're exempted, that only leaves businesses like mine that are affected," Ms. Grumet said.

Vikram Rao, a 31-year-old engineer in San Francisco, says he feels better about supporting the measure after the companies' promises to provide new benefits to drivers.

"There is value in the flexible working arrangement for many drivers and value to society in these services existing as they do, particularly in areas with very bad or zero public transportation," he said.

Write to Preetika Rana at preetika.rana@wsj.com and Christine Mai-Duc at christine.maiduc@wsj.com

(END) Dow Jones Newswires

10-28-20 0748ET