California appeals court: Uber and Lyft likely misclassified drivers as contractors

uber lyft car 3

Angela Lang/PJDM

Within the newest of a back-and-forth battle between the state of California and Uber and Lyft, an appeals court docket dominated Thursday night that an injunction issued towards the 2 ride-hailing firms over the standing of their drivers was an applicable measure.

The injunction was issued in August by Decide Ethan Schulman of the San Francisco Superior Court docket, who dominated that the ride-hailing firms must start classifying their drivers as employees in the state. The choose allowed the businesses 10 days to enchantment the ruling, which they did.  

The First Appellate District court docket in San Francisco heard arguments from the businesses final week and issued its ruling Thursday siding with Schulman. The appeals court docket mentioned in its 74-page ruling that there was an “overwhelming chance” Uber and Lyft are violating California regulation AB5. That regulation requires some employers that use impartial contractors to reclassify their employees as staff and supply extra employee advantages. 

The injunction stems from a lawsuit against Uber and Lyft filed by the state of California in Could. The go well with says the businesses “exploited a whole bunch of hundreds of California employees” by classifying drivers as impartial contractors and are violating AB5, which took impact in January.

As this lawsuit works its approach by means of the courts, Uber, Lyft and different gig economic system firms have sponsored a state ballot measure campaign with practically $200 million to deliver the problem to voters. Proposition 22 goals to create an exemption for the businesses to AB5 and permit them to proceed classifying their employees as impartial contractors.

Julie Wooden, a Lyft spokeswoman, mentioned the appeals court docket ruling makes the vote on Proposition 22 “extra pressing than ever.” The corporate mentioned it is contemplating different authorized choices, together with an enchantment to the California Supreme Court docket.

An Uber spokesman mentioned the corporate can also be contemplating its enchantment choices and emphasised the vote on Proposition 22. “Rideshare drivers can be prevented from persevering with to work as impartial contractors, placing a whole bunch of hundreds of Californians out of labor and certain shutting down ridesharing all through a lot of the state,” he mentioned.

Thursday’s ruling will not have a right away impact. The court docket gave the businesses at the very least a 30-day keep with out modifications concerning driver standing. 

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Dara Kerr