A California appeals court has sided with a lower court and is saying Uber and Lyft must classify their drivers as employees, as opposed to independent contractors. The court found that the rideshare companies were likely violating state labor law.
While Uber and Lyft have threatened to leave California in the event they are forced to classify their drivers as employees, there’s time for a different decision to be made. The law remains effectively on hold for the companies for at least 30 days after the case is sent back to trial court. Before then, the companies have the opportunity to appeal to the California Supreme Court.
In the meantime, California voters will have the opportunity to decide on the law’s future because it’s on the November ballot. The measure, Proposition 22, would allow ridesharing and food delivery apps to keep their drivers as independent contractors while giving them limited benefits but not the full protections of employment status.
In an effort to support the measure, both companies have poured nearly $200 million into promoting the measure, which makes it the most expensive ballot campaign in state history. According to a recent poll from the University of California, Berkeley, 39% of likely voters supported the measure, 36% were opposed, and a quarter were undecided.
In response to the appeals court decision, an Uber representative released the following statement: “Today’s ruling means that if voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state.”
San Francisco City Attorney Dennis Herrera, on the other hand, welcomed the appeals court’s ruling: “This decision makes it abundantly clear that Uber and Lyft have been breaking the law for years. The only thing ‘radical’ and ‘unprecedented’ is the scope of Uber and Lyft’s misconduct. This is a victory for the people of California and for every driver who has been denied fair wages, paid sick days, and other benefits by these companies.”
As the election draws near, it’s likely we will see more developments regarding the employment status of rideshare drivers. To learn more about the latest updates, keep in touch with the Rideshare Law Group. We regularly update our blog with the most up-to-date rideshare industry news.