Uber and Lyft drivers are employees, California appeals court affirms

The battle over Uber and Lyft drivers' status saw a significant development Thursday. A Californian appeals court has unanimously upheld a ruling that the ride-hailing companies' drivers must be classified as employees, meaning they're eligible for healthcare, paid sick leave, and other such benefits.

The stay on the Superior Court's August injunction will therefore soon be lifted, requiring Uber and Lyft to provide these benefits to drivers.

"[Uber and Lyft describe] the injunction here as 'radical' and 'unprecedented,'" wrote Justice Jon Streeter in his 74-page ruling. "But these adjectives perhaps say more about the reach of modern technology and the scale of today's technology-driven commerce than they do about the order itself... It is broad in scope, no doubt, but so too is the scale of the alleged violations."

Workers' rights campaigners are thrilled with the decision.

"This decision makes it abundantly clear that Uber and Lyft have been breaking the law for years," San Francisco City Attorney Dennis Herrera said in a statement. "For too long Uber and Lyft have illegally denied their drivers basic workplace protections and shifted that burden onto drivers and taxpayers."

"This is a huge victory for workers," driver advocacy group Gig Workers Rising said in a statement. "Uber and Lyft drivers deserve basic protections and benefits... This is about the future of work in this country. This is about securing good jobs with real benefits for generations to come."

Uber and Lyft were less happy with the appellate court's decision. “This ruling makes it more urgent than ever for voters to stand with drivers and vote yes on Prop. 22,” Lyft spokesperson Julie Wood said in an email statement.

"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," said an Uber spokesperson.

Proposition 22 is a Californian ballot measure that has been backed by various delivery and ride-hailing companies, including Uber and Lyft. If passed in November, it will give drivers limited benefits but keep them classified as independent contractors.

Uber claims 72 percent of drivers support Prop. 22, citing a survey of 718 drivers that the company commissioned. The company also argues that treating drivers as employees would cause prices to rise.

However, Gig Workers Rising told Mashable it considers Prop. 22 a "dangerous and deceptive" attempt to deny drivers their legal rights as employees.

"First the state legislature, then the governor, and now the courts have all agreed that drivers are employees under state law, and Prop. 22 is nothing more than an attempt by multi-billion dollar gig companies to undo that recognition," said Gig Workers Rising, urging Californians to vote against the proposition.

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The group further dismissed Uber and Lyft's threats to suspend services or withdraw from California if forced to treat drivers as employees, calling it "a bluff intended to scare voters during this election."

"These companies have never pulled out of a market as large as California before, even when cities across the world have sought to ensure they comply with local labor laws," said Gig Workers Rising. "It’s important drivers and riders don’t get distracted by Uber & Lyft fear-mongering... We cannot allow corporations to blackmail us into voting in their best interests."

"When Prop. 22 is defeated, the companies’ bag of tricks will have shrunk, as both voters and now the courts will have recognized that gig workers should receive employee benefits, protections, and wages."

Uber and Lyft will continue to operate as normal for now, as the ruling won't take effect immediately. The appeals court still has to transfer jurisdiction of the case back to the lower courts, which may take a few months, and the stay on the injunction will expire 30 days after that. However it may be extended again if Uber and Lyft file another appeal, a move that both companies are considering.