The companies will have 10 days before the order goes into effect to allow a higher appeal, according to a copy of the ruling by Judge Ethan Schulman of San Francisco Superior Court. Uber and Lyft currently treat their drivers as self-employed contractors.
According to the court’s ruling, “now, when a defender’s driver’s drive is at an all – time low, it may be the best time (if not the worst) time for defenders to change their business practice to comply with California law without caused widespread negative effects on their drivers. “
In response to the order, Lyft spokeswoman Julie Wood said “drivers do not want to be employees, complete stop.”
“We will immediately appeal this ruling and continue to fight for its independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers,” Wood said in a statement to CNN Business.
Representatives for Uber did not immediately respond to a request for comment.
Under the law, which went into effect on January 1, companies must prove that workers are free from company control and perform work outside the normal course of business to classify workers as self-employed rather than as employees.
The lawsuit accuses Uber and Lyft of providing employees with protection, including a minimum wage, overtime, paid sick leave, and unemployment insurance, to which they are entitled as employees. Uber, Lyft and DoorDash have each put $ 30 million behind a voting initiative, with additional support from Instacart and Postmates, which Uber recently agreed to get. If passed, it would exempt them from the AB-5 law, but drivers offer some benefits.
The AB-5 Act has long been considered a potential existential threat to many gig economy companies such as Uber and Lyft, who built their businesses largely by treating workers as self-employed rather than as employees. In addition to not receiving certain employee protections, drivers also pay their own expenses, including gas and car maintenance.
“The vast majority of drivers want to work independently, and we have already made significant changes to our app to ensure that the case remains under California law,” an Uber spokesman said in a statement last week.. “If more than 3 million Californians are out of work, our elected leaders should be focused on job creation, not trying to close an entire sector.”
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