Tides may be turning in a years-long legal battle over the classification of drivers for ride-hailing apps like Uber and Lyft. Earlier this month a California court ordered Uber and Lyft to follow a California law passed last year that requires them to classify their drivers as employees rather than independent contractors like they have been since their founding. The reactions from both companies have been strong, with both claiming they would discontinue their services in California if they were not exempt from the law.
For years, many drivers have argued to be classified as employees so that they have access to benefits like overtime pay, sick leave, and minimum wage laws. Uber and Lyft, however, have countered that drivers are not “fundamental” to their platforms, claiming that their apps are used for much more than just transportation. Judge Schulman flatly rejected that argument, stating that it "flies in the face of economic reality and common sense."
This lawsuit stems from California Assembly Bill 5, passed in 2019 and implemented in January 2020, which was intended to make more gig economy workers classified as employees rather than independent contractors. In response to the bill, Uber, Lyft, and DoorDash have contributed millions of dollars to support a ballot proposal, Prop 22, that would exempt them from the bill if passed. That proposal will be up for a vote by the public in the November 2020 election.
Uber and Lyft immediately filed their first appeal, which Judge Schulman swiftly denied. At this point, the companies announced they would shut down their operations in the state by August 20, the night before the ruling was to go into effect. However, the Court granted a last-second stay, giving the companies more time to create a plan for complying with the bill. Over the next few weeks, the companies will have to submit written plans for their compliance along with other legal documents.
Although this specific ruling applies only to Uber and Lyft, it can be expected that other companies like DoorDash and Instacart will be subject to these rules soon. These rulings bring hope to gig economy workers who have long-awaited better benefits and broader workplace protections in California.
Davtyan Law Firm Can Help
The legal team at Davtyan Law Firm focuses on protecting the rights of California workers by helping them navigate the legal field. We understand these quickly-changing rulings can be extremely confusing. If you are a gig economy worker or rideshare driver concerned about your legal rights, call Davtyan Law Firm to discuss your options.
Based in California, Davtyan Law Firm focuses exclusively on employment law and protecting employees' rights. The legal team handles a broad range of employment disputes, including wrongful termination, harassment, discrimination, retaliation, and wage and hour issues.