On Aug. 10, a California Superior Court judge ruled that rideshare companies Uber and Lyft must change the classification of their drivers from independent contractors to employees.
The ruling was a major victory for California lawmakers in their yearlong struggle to enforce AB 5, the controversial worker classification bill that went into effect Jan. 1.
San Francisco Superior Court Judge Ethan Schulman ruled in favor of California Attorney General Xavier Becerra’s argument that Uber and Lyft are violating AB 5, which says workers can only be considered independent contractors if they perform duties outside the usual course of a company’s business.
“The court has weighed in and agreed: Uber and Lyft need to put a stop to unlawful misclassification of their drivers while our litigation continues,” said Becerra. “While this fight still has a long way to go, we’re pushing ahead to make sure the people of California get the workplace protections they deserve. Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities. We’re going to keep working to make sure Uber and Lyft play by the rules.”
Schulman paused the injunction for 10 days to give the companies a chance to appeal the decision. Both companies made statements Aug. 9 saying that they will appeal the ruling.
An Uber spokesperson said, “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law. When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.”
“Ultimately, we believe this issue will be decided by California voters and that they will side with drivers,” Lyft said, referring to Prop 22, the upcoming ballot measure. Voters will decide Nov. 3 if rideshare drivers in California can remain contractors or if they have to become W-2 employees;
Becerra, along with the City Attorneys of San Francisco, Los Angeles and San Diego, filed their worker misclassification lawsuit against Uber and Lyft on May 5, followed by the motion for a preliminary injunction on June 24.
“This is a resounding victory for thousands of Uber and Lyft drivers who are working hard — and, in this pandemic, incurring risk every day — to provide for their families,” said Los Angeles City Attorney Mike Feuer. ”Of course, our fight is not over and we will vigorously pursue this litigation until these workers have the permanent protection they deserve.”
“Misclassification hurts drivers and it puts the burden on taxpayers to pay for benefits that Uber and Lyft should be providing,” said San Francisco City Attorney Dennis Herrera. “These companies have pocketed millions of dollars by leaving taxpayers to foot the bill. That’s unacceptable. During this global pandemic, it’s even more important for drivers to get access to protections like unemployment insurance. There is no rule that prevents these drivers from continuing to have all of the flexibility they currently enjoy. Being properly classified as an employee doesn’t change that.”