Appeals Court orders Uber, Lyft to classify drivers as employees

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SAN FRANCISCO, Calif. (KRON) — The Court of Appeals ordered rideshare apps Uber and Lyft to classify drivers as employees, the San Francisco City Attorney announced Thursday.

Lyft Spokesperson Julie Wood released a statement following the ruling.

““This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” she wrote.

Uber’s statement on the ruling:

“Today’s ruling means that if the voters don’t say Yes on Proposition 22, rideshare drivers will be prevented from continuing to work as independent contractors, putting hundreds of thousands of Californians out of work and likely shutting down ridesharing throughout much of the state. We’re considering our appeal options, but the stakes couldn’t be higher for drivers—72% of whom support Prop 22—and for the California economy, where millions of people are jobless and another 158,000 just sought unemployment support this week.”

San Francisco City Attorney Dennis Herrera released the following statement:

“This decision makes it abundantly clear that Uber and Lyft have been breaking the law for years. The only thing ‘radical’ and ‘unprecedented’ is the scope of Uber and Lyft’s misconduct. 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. For too long Uber and Lyft have illegally denied their drivers basic workplace protections and shifted that burden onto drivers and taxpayers. Uber and Lyft have pocketed millions of dollars by leaving drivers in the lurch and taxpayers to foot the bill. 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.”

Statement from California Attorney General Xavier Becerra:

Californians have fought long and hard for paycheck and benefit protections. Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections. The courts saw right through their arguments. In the midst of a COVID health and economic crisis, what worker can afford to be denied basic protections like paid sick leave, unemployment insurance, minimum wage, or overtime?

Today’s decision comes on the same day that the federal government reports that more than one million Americans filed for unemployment benefits — and 3 of every 10 of them are gig workers or self-employed. But remember, companies like Uber and Lyft that classify gig workers as “independent contractors” don’t pay into unemployment benefit funds for workers. That means that American taxpayers — not gig companies like Uber and Lyft — are covering the unemployment benefits that gig workers are receiving from the COVID bailout. That’s not fair to our workers and taxpayers. It’s time for Uber and Lyft to play by the rules.” 

In August, a California judge ordered both Uber and Lyft to treat their California drivers as employees instead of independent contractors, guaranteeing them benefits like any other full-time employee.

Uber said it will likely shut down operations in the state for several months if its required to do this.

Both Uber and Lyft immediately appealed to a higher court, putting the ruling on hold as the case continues.

If Proposition 22 passes, this means drivers will be provided new benefits and protections.

This is a breaking news alert, check back for updates.

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