California Supreme Court Rules That Uber and Lyft Drivers Will Remain Independent Contractors

The California Supreme Court connected Thursday ruled unanimously that drivers for app-based companies including Uber, Lyft, and DoorDash volition stay autarkic contractors, arsenic opposed to employees. The decision, upholding a authorities ballot measure called Proposition 22, was considered a large triumph for the gig-economy companies.

The question of whether those who thrust for the companies should beryllium treated arsenic employees oregon contractors has spurred a yearslong ineligible conflict successful the state. In 2020, California voters approved Proposition 22, allowing app-based companies to proceed to dainty their workers arsenic autarkic contractors. That ballot reversed an earlier tribunal ruling that recovered specified companies controlled excessively galore of their drivers’ moving conditions to dainty them arsenic contractors. The ballot measurement run outgo its advocates, including Uber, Lyft, Postmates, Instacart, and DoorDash, immoderate $200 million, breaking authorities records for spending.

Driver advocates person agelong argued that those down the instrumentality were owed the aforesaid benignant of benefits offered to full-time employees, including wellness care, sick pay, and workers’ compensation. The companies person said that gig enactment is an wholly caller and flexible signifier of work, and that treating drivers arsenic employees would reshape their businesses. One 2020 investigation suggested that treating drivers arsenic employees successful California would outgo Uber and Lyft astir $800 cardinal annually successful conscionable payroll taxes and benefits.

The 2020 ballot measurement required the app-based companies to institute a wage floor, astatine slightest for the clip drivers walk with passengers successful the car, and to wage retired wellness attraction stipends for workers who thrust capable monthly hours.

“Today’s determination was expected to bring justice, to corroborate that adjacent arsenic workers who are managed by apps connected our phone, by algorithms, by AI, that we are so workers with robot managers,” Nicole Moore, president of Rideshare Drivers United and a part-time operator successful Los Angeles, said during a briefing with reporters pursuing the decision. “And we merit the aforesaid rights and benefits arsenic each different workers successful our state. But that did not hap today.” Moore called connected lawmakers successful the authorities to find a “creative pathway” to guarantee that drivers are protected and paid fairly.

In a statement, Uber said the ruling enactment “an extremity to misguided attempts to unit [drivers] into an employment exemplary that they overwhelmingly bash not want.” Lyft besides praised the decision: “We are pleased to proceed to bring Californians person to their friends, family, and neighbors, and supply drivers with entree to flexible net opportunities and benefits portion preserving their independence.”

On a telephone for reporters hosted by proponents of Proposition 22, immoderate drivers said they were gladsome that app-based companies would support their flexibility. “I’m conscionable truthful grateful close now,” said operator Stephanie Whitfield, who works successful the Coachella Valley.

The ruling won’t person a nonstop effect connected different states’ gig idiosyncratic laws, but could power argumentation successful different places. Minnesota and Colorado some recently passed laws instituting amended wage standards for app-based drivers, though neither resolved whether workers should beryllium treated arsenic contractors oregon employees. The Biden medication has taken aim astatine idiosyncratic misclassification successful the gig system done caller labour rules, though app-based companies accidental those rules don’t impact their businesses.