By now, you should be well aware of the battles between Uber/Lyft and the State of California regarding the classification of the drivers working for these ride-hailing companies. The battle centers on the State’s desire to have those working for Uber/Lyft to be considered employees, and Uber/Lyft’s desire to have them classified as independent contractors. This is one of the many issues raised by California’s AB5 legislation.
On October 22, 2020, the California Court of Appeals for the First Appellate District in The People of the State of California v. Uber Technologies ruled that Uber and Lyft must classify their drivers as employees rather than independent contractors, siding with a lower court that each of the companies were likely violating state labor law. Uber and Lyft will likely appeal this ruling to the California State Supreme Court.
In the meantime, California voters may decide on the law’s future because it’s on the November ballot as Proposition 22, which would allow ride-hauling and food delivery apps to keep their drivers as independent contractors while giving them limited benefits but not the full protections of employment status.
Kristi W. Dean, Managing Partner
Stone Dean LLP