California Supreme Court rules that Uber and Lyft drivers remain independent contractors

The California Supreme Court ruled unanimously on Thursday that drivers for app-based companies such as Uber, Lyft and DoorDash remain independent contractors, not employees. a state ballot measure called Proposition 22This was considered a major win for gig-economy companies.

The question of whether those who drive for companies should be considered employees or contractors has sparked years-long legal battles in the state. In 2020, California voters approved Proposition 22, allowing app-based companies to continue treating their workers as independent contractors. That vote overturned a proposition previous court decision The ballot measure campaign raised nearly $200 million for its supporters, including Uber, Lyft, Postmates, Instacart and DoorDash, breaking state records for spending.

Driver advocates have long argued that those who drive should receive the same benefits offered to full-time employees, including health care, sick pay, and workers’ compensation. Companies have said that gig work is an entirely new and flexible form of work, and that treating drivers as employees would reshape their businesses. A 2020 analysis suggested that treating drivers as employees in California would cause Uber and Lyft to lose about $800 million annually in payroll taxes and benefits alone.

A 2020 ballot measure required app-based companies to set a minimum wage, at least for the time drivers spend in the car with passengers, and to pay a health care stipend for workers who drive a sufficient number of hours monthly.

“Today’s decision was meant to bring justice, to confirm that even though employees are managed by apps, algorithms, AI on our phones, we are in fact employees with robot managers,” Nicole Moore, president of Rideshare Drivers United and a part-time driver in Los Angeles, said during a briefing with reporters after the decision. “And we deserve the same rights and benefits as all other workers in our state. But that’s not what happened today.” Moore called on state lawmakers to find “creative paths” to ensure drivers are protected and paid fairly.

one of statementUber said the decision “puts an end to misguided attempts to coerce people into [drivers] into an employment model they absolutely do not want.” Lyft also said praised The Verdict: “We’re excited to bring Californians closer to their friends, family and neighbors, and give drivers access to flexible income opportunities and benefits while maintaining their independence.”

On a call for reporters organized by supporters of Proposition 22, some drivers said they were happy that the app-based companies would maintain their flexibility. “I’m just so grateful,” said Stephanie Whitfield, a driver who works in the Coachella Valley.

The decision will not have a direct impact on gig worker laws in other states, but could influence policy elsewhere. Both Minnesota and Colorado Recently passed laws Establishing better pay standards for app-based drivers, though neither has decided whether workers should be treated as contractors or employees. The Biden administration hit the target Although app-based companies say these rules do not affect their businesses, concerns are being raised over misclassification of workers in the gig economy.