Risk & Compliance

California Judge Says Lyft and Uber Drivers Are Employees

The injunction has 10 days to take effect, giving the ridesharing companies time to appeal the decision.
Lauren MuskettAugust 11, 2020
California Judge Says Lyft and Uber Drivers Are Employees

A judge in California ordered ridesharing companies Lyft and Uber to reclassify their drivers in the state as employees instead of as independent contractors.

In a 34-page ruling, Judge Ethan Schulman of San Francisco Superior Court cited the companies’ “prolonged and brazen refusal” to comply with state law, saying the plaintiffs showed an “overwhelming likelihood” they could prove Uber and Lyft classified drivers illegally.

In June, California Attorney General Xavier Becerra and a coalition of city attorneys filed for the preliminary injunction to force the companies to comply with Assembly Bill 5 (AB 5). In a lawsuit, the attorney general and the coalition have accused Lyft and Uber of denying drivers minimum wage, overtime, sick leave, unemployment insurance and other protections.

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The injunction has 10 days to take effect. Lyft said it will appeal the ruling. Uber is challenging the constitutionality of AB 5.

Uber, Lyft, and DoorDash have each given $30 million to support Proposition 22, a ballot initiative that would exempt them from AB-5. The companies are also suing Becerra over Proposition 22, alleging the ballot title chosen by the attorney general is “false, materially misleading, and prejudicial.”

Voters in California are expected to vote on the measure in November.

“Drivers do not want to be employees, full stop,” a spokesperson for Lyft said. “We’ll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers.”

On Monday, in an op-ed in the New York Times, Uber chief executive officer Dara Khosrowshahi said states should require companies to fund health benefits and paid time off benefits for gig workers. “Uber is ready, right now, to pay more to give drivers new benefits and protections,” Khosrowshahi said. “But America needs to change the status quo to protect all workers, not just one type of work.”

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