Appeals Court Says Uber and Lyft Must Treat California Drivers as Employees

“When violation of statutory workplace protections takes place on a massive scale, as alleged in this case, it causes public harm over and above the private interest of any given individual,” the court wrote in its decision on Thursday.

State officials have argued that the companies must comply with the law, known as Assembly Bill 5, so that workers can obtain sick leave, overtime and other benefits — needs that have become especially pressing during the pandemic.

“This is a victory for the people of California and for every driver who has been denied fair wages, paid sick days, and other benefits by these companies,” San Francisco’s city attorney. Dennis Herrera, said in a statement. “The law is clear: Drivers can continue to have all of the flexibility they currently enjoy while getting the rights they deserve as employees. The only thing preventing that is Uber and Lyft’s greed.”

But Uber and Lyft have argued that they are technology companies, not transportation businesses. Employing drivers would force them to raise fares and hire only a small fraction of the drivers who currently work for them, they said.

The companies are sponsoring a state ballot initiative, Proposition 22, to exempt them from the law and allow them to continue classifying drivers as independent contractors, while providing them with limited benefits. The court gave Uber and Lyft a grace period in which to make changes, and if the ballot initiative is successful, it could throw the ruling into question.

“This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” said Julie Wood, a spokeswoman for Lyft.

Article source: https://www.nytimes.com/2020/10/22/technology/uber-lyft-california.html