California Court Upholds Employee Classification for Uber and Lyft Drivers
A California appeals court upholds a ruling requiring Uber and Lyft to classify their drivers as employees. The ultimate outcome now depends heavily on the upcoming vote on Proposition 22.
A California appeals court upholds a prior ruling that requires Uber and Lyft to classify their drivers as employees rather than independent contractors. The judge rejects the companies' claims that following the law causes irreparable harm, noting that they have had ample time to transition their workforce since the underlying AB 5 legislation emerged in 2018. The court also clarifies that the injunction does not stop the companies from offering flexible schedules to their workers.
Despite this legal defeat, the immediate impact remains paused as the court stays the decision for 30 days after issuing the remittitur. This delay shifts the focus to Proposition 22, a ballot measure that seeks to exempt app-based drivers from the state law and keep them as independent contractors. Both Uber and Lyft heavily back the measure, arguing that a forced shift to employee status threatens to shut down ridesharing across much of California.
If voters pass Proposition 22, this court ruling essentially becomes moot, though drivers would gain new benefits like minimum compensation and healthcare subsidies based on driving time. Meanwhile, Lyft explores its remaining legal options, which may include an appeal to the California Supreme Court. Uber echoes this strategy as both companies insist that a majority of their drivers support the ballot measure to maintain their current working arrangements.