California court orders Uber and Lyft to treat drivers as employees, not contractors
SAN FRANCISCO - An appeals court unanimously decided on Thursday that Uber and Lyft drivers are employees rather than independent contractors. The ruling comes less than two weeks before voters will be asked to exempt the ride-hailing giants from the state's gig economy law.
"We just won a unanimous victory for workers in our case against Uber and Lyft in the Court of Appeals. Drivers are employees.," City Attorney Dennis Herrera wrote on Twitter late Thursday afternoon.
The case has seen some back and forth as it has worked its way through the courts. This past summer an appeals court gave Uber and Lyft a reprieve when both companies threatened to shut down in the state of California based on the court's earlier ruling that they would have to adhere to state law AB5 and treat their drivers as employees.
The ride share companies at that time were given a deadline to comply by the state superior court, but the reprieve from the appeals court came one day before that deadline.
Thursday's decision won't have any immediate impact because it doesn't take effect for at least 30 days.
An initial lawsuit against Uber and Lyft was filed by California Attorney General Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco.
Herrera issued the following statement:
“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. For too long Uber and Lyft have illegally denied their drivers basic workplace protections and shifted that burden onto drivers and taxpayers. Uber and Lyft have pocketed millions of dollars by leaving drivers in the lurch and taxpayers to foot the bill. The law is clear: Drivers can continue to have all of the flexibility they currently enjoy while getting the rights they deserve as employees. The only thing preventing that is Uber and Lyft’s greed.”
California Attorney General Xavier Becerra said Thursday's ruling demonstrated that the courts saw right through Uber and Lyft's arguments.
“Californians have fought long and hard for paycheck and benefit protections. Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections,” Becerra said.
Meanwhile, Uber and Lyft have joined other so-called gig economy companies such as DoorDash and Postmates in their quest to legally disregard AB5 with Proposition 22 on California's ballot.
The ballot measure would classify app-based rideshare drivers as independent contractors.
Associated Press contributed to this story.