Uber and Lyft are still required to classify drivers as employees after a California judge dismissed a company’s attempt to delay a company’s prior dismissal. The two companies have threatened to leave the state if they are forced to change the status of their drivers from independent contractors to employees.
Earlier this week, Uber and Lyft were instructed by California Superior Court Judge Ethan Schulman to classify their drivers as employees. The ruling was in response to a preliminary injunction filed by California Attorney General Xavier Becerra as part of a lawsuit alleging that the companies violated the state’s AB5 law that was passed on January 1. went into operation. The law anchors the so-called “ABC test” to determine if someone is a contractor or an employee.
But neither Uber nor Lyft appear ready to pack their bags any more. Spokesmen for both companies said they would seek further relief from the courts and file a new appeal before the end of the week.
The 10-day term to force drivers to begin redistricting began when the judge handed down the ruling on August 10. If the extra appeal from Uber and Lyft is denied or not heard in time, the ride-haul companies say they will follow up on their threat to stop operations in California after August 20th.
Uber and Lyft say most drivers prefer it because of the flexibility and ability to set their own hours. But unions and elected officials doubt this of their traditional benefits such as health insurance and workers’ compensation.
Uber and Lyft, along with DoorDash, are funding a voting measure, Proposition 22, that AB5 would pass on by classifying ride-hail drivers and other gig-economy workers as self-employed contractors. The voting measure could be the companies’ latest slashing attempt if their efforts to reverse the state’s legal challenges fail.
