Pressure is on for Uber, Lyft to reclassify drivers as employees in California
A judge has granted the state's request for a preliminary injunction forcing the ride-hailing companies to stop classifying their drivers as independent contractors.
Correction: An earlier version of this story misrepresented the plaintiffs in the case.
Uber Technologies Inc. and Lyft Inc. must recognize their drivers as employees in compliance with California law, a San Francisco judge held last week.
In a 34-page order, Superior Court Judge Ethan Schulman granted the state’s request for a preliminary injunction forcing the ride-hailing companies to stop classifying their drivers as independent contractors.
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“Now, when defendants’ ridership is at an all-time low, may be the best time (or the least worst time) for defendants to change their business practices to conform to California law without causing widespread adverse effects on their drivers,” Schulman wrote.
The judge stayed his ruling for 10 days at the defendants’ request.
“The court’s ruling is stayed for a minimum of 10 days, and we plan to file an immediate emergency appeal on behalf of California drivers,” an Uber spokesman said in an emailed statement. “The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law.”
A statement from Lyft said the company would appeal the injunction as well.
The injunction is similar to one granted in February by a San Diego judge who required Instacart to acknowledge that its shoppers are employees, not independent contractors.
“The Supreme Court announced Dynamex two years ago,” wrote San Diego Superior Court Judge Timothy Taylor, citing the California Supreme Court’s 2018 decision adopting the so-called “ABC test” for when workers should be classified as employees. “To put it in the vernacular, the handwriting is on the wall.”
The two rulings mark victories for state lawmakers eager to force the ride-hailing giants into compliance with Dynamex and related legislation, AB 5.
“Uber and Lyft have been fighting tooth and nail for years to cheat their drivers out of the basic workplace protections and benefits they have been legally entitled to,” AB 5 author Assemblywoman Lorena Gonzalez, D-San Diego, said in a prepared statement. “Today the court sided with the people of California.”
During an online hearing last week, Schulman appeared to question whether a preliminary injunction was the right vehicle at the right time to mandate a change affecting thousands of drivers.
“But if the injunction the people request will have far-reaching effects, they have only been exacerbated by defendants’ prolonged and brazen refusal to comply with California law,” Schulman wrote in Monday’s order. “Defendants may not evade legislative mandates merely because their businesses are so large that they affect the lives of many thousands of people.”
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