California appeals court rules Uber, Lyft must classify drivers as employees

KGO logo
Friday, October 23, 2020
State appeals court rules rideshare drivers are employees, not contractors
A California appeals court ruled Uber and Lyft violated a state labor law by misclassifying their drivers as contractors rather than employees.

SAN FRANCISCO (KGO) -- A California appeals court has ruled Uber and Lyft violated a state labor law. Thursday's ruling said the rideshare companies misclassified their drivers as contractors rather than employees.

That goes against Assembly Bill 5, which grants fair wages and benefits to workers classified as employees. Uber and Lyft have argued that the law does not apply to the rideshare companies.

RELATED: Here are both sides of Proposition 22, ballot measure that affects California's app-based drivers, gig economy

The appeals court ordered Uber and Lyft to reclassify their drivers after 30 days while the case is returned to the trial court. The two companies can use that time to appeal to the California Supreme Court.

The California appeals court ruling raises the stakes for Proposition 22, a November ballot measure that seeks to exempt Uber and Lyft from the state law.

RELATED: Seattle passes minimum pay law for Uber, Lyft drivers

The proposition, backed by both rideshare companies, would allow Uber, Lyft and food delivery apps to continue to categorize their drivers as independent contractors.

Uber and Lyft have threatened to leave California if they are forced to reclassify their drivers as employees.

See more stories and videos related to Uber and Lyft.