A California judge has ruled that Uber and Lyft should classify their drivers as employees in a brilliant preliminary assignment issued Monday afternoon. The assignment has been pending for 10 days, however, giving Uber and Lyft the opportunity to appeal the decision. Uber said it planned to file an immediate emergency call to block the ruling from going into effect.
Uber and Lyft are under increasing pressure to fundamentally change their business models in California, the state where both companies were founded and eventually flourished. At issue is the classification of riding horses as self-employed contractors. Uber and Lyft say drivers prefer the flexibility to work as freelancers, while unions and elected officials compel them to escape traditional benefits such as health insurance and workers’ compensation.
In May, Attorney General Xavier Becerra of California, along with city attorneys from Los Angeles, San Francisco, and San Diego, prosecuted the companies, claiming that their drivers were classified as independent contractors when they had to be employees under the AB5 Act. the state that went into effect on January 1st. Becerra later filed a motion for a preliminary injunction that would force companies to ride with classifying drivers directly as employees. AB5, which was signed into law last September, defies the so-called ‘ABC test’ to determine if someone is a contractor or an employee.
“It’s this simple,” California Judge Ethan Schulman wrote in his ruling, “drivers ‘drivers do not do work that is’ outside the normal course ‘of their business. Suspicion’ insistence that their businesses are ‘multi-faceted platforms’ instead of transportation companies is flat in accordance with the legal provisions governing their business as transport network companies, which are defined as companies ‘engaged in the transport of persons by motor for compensation.’ “
He added, “It also flies in the face of economic reality and common sense … To put it bluntly, drivers are central, not tangential, to the whole business of Uber and Lyft.”
In a statement with the statement, Becerra said that California and its workers’ should not have to pay the bills when large corporations try to skip over their responsibilities. We will continue to work to ensure that Uber and Lyft play by the rules. ”
This was just the last legal blow against Uber and Lyft in California. Last week, the state’s state commissioner claimed in a few lawsuits that companies paid drivers’ wages by refusing to classify them as employees.
Groups of executives who have put companies under pressure to classify their drivers celebrated the decision as progress. “Today’s statement confirms what California drivers have long known to be true,” said Mike Robinson, a Lift driver and member of the Mobile Workers Alliance, a group of drivers in Southern California, in a statement. I have rights and Uber and Lyft must respect those rights. “
But Uber and Lyft are maintaining these prevailing conflicts with the wishes of the majority of drivers and will lead fewer jobs during a global pandemic that is straining workers’ finances.
“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. “If more than 3 million Californians are out of work, our elected leaders should be focused on job creation, not trying to shut down an entire sector during an economic depression.”
A spokesman for Lyft agreed. “Drivers do not want to be employees, stop it,” the spokesman said. “We will immediately appeal to this statement and continue to fight for its independence. Ultimately, we believe this issue will be resolved by California voters and that they have a side with drivers. ”
If drivers were classified as employees, Uber and Lyft would be responsible for paying their minimum wages, overtime pay, paid rest periods, and compensation for the cost of driving for the companies, including personal mileage. But as independent contractors, drivers do not receive any of these benefits.
The California lawsuit and court decision comes ahead of the November election, when state voters will decide on an Uber-and-Lyft-backed voting measure that AB5 would pass by classifying ride-hail drivers and other gig-economy workers as independent contractors.
