The California Court of Appeals has ordered Uber and Lyft to designate their drivers as employees. In a 74-page opinion, the court affirmed the August 10 order requiring Uber & Lyft to classify their drivers as employees within 30 days.
But that provision is unlikely to go into effect before California voters acknowledge the ballot measure, Prop 22, which would exempt Uber, Lyft and other business economy firms from state law and make classifying workers as independent contractors much more difficult.
The restraining order will not take effect until 30 days after the appeal decision. However, it’s a sign that Uber and Lyft have a lot of a ride on Prop 22 traffic. The companies, along with DoorDash and other economic gig companies, are spending $ 186 million to win voters.
However, public officials and groups of drivers celebrated the court’s ruling. “This is a huge victory for the drivers,” 22 supporter Gig Workers Rising said in a statement. The San Francisco attorney simply tweeted, “Drivers are employees.”
Uber and Lyft said they are studying “appeal options” and may take the case to the state Supreme Court. Today’s decision means that if voters do not say yes to Proposition 22, taxi drivers will be barred from continuing to operate as independent contractors, resulting in hundreds of thousands of California residents out of business, and potentially shutting down ride-sharing in most parts of the state, he added. A spokesperson for Uber.
A Lyft spokesperson said, “This ruling makes it more urgent than ever for voters to stand up with the drivers and vote yes on the proposal. 22.”
The battle on Prop 22 has raged in recent weeks, as polls have shown voters are deeply divided over whether Uber and Lyft should treat drivers like employees. A group of Uber drivers filed a lawsuit against the company today, alleging that the “constant barrage” of messages in its app violated workers’ rights. Drivers are seeking fines of up to $ 260 million.
The August 10 ruling was in response to a preliminary injunction filed by California State Attorney Xavier Becera as part of a lawsuit alleging the companies are violating state law AB5 that went into effect on January 1. The law perpetuates the so-called “ABC test” to determine whether someone is a contractor or an employee, and it is generally difficult for companies like Uber and Lyft to classify workers as independent contractors.
Uber and Lyft say most drivers prefer to be freelancers due to the flexibility and ability to set their own working hours. But trade unions and elected officials assert that this deprives them of traditional benefits such as health insurance and workers’ compensation, as well as forcing drivers to bear all the costs of their work.
Uber and Lyft, along with DoorDash, are funding a ballot, Proposition 22, that would allow them to bypass AB5 and continue to classify their workers as independent contractors. A recent Uber-funded poll found that the majority of drivers – as well as voters – support the plan.