SAN FRANCISCO (AP/CBS13) — A California appeals court on Thursday upheld an order requiring Uber and Lyft to treat their California drivers as employees instead of independent contractors, less than two weeks before voters will be asked to exempt the ride-hailing giants from the state's gig economy law.
The decision won't have any immediate impact because it doesn't take effect for at least 30 days, well after the Nov. 3 vote on Proposition 22.
"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," California Attorney General Xavier Becerra said. "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."
Uber and Lyft and DoorDash, who heavily bankrolled the measure, had appealed an August preliminary injunction by a San Francisco judge. But the appellate ruling found "no legal error" and allowed it to stand.
"We conclude that the injunction was properly issued in accordance with enduring principles of equity," the 74-page ruling said. "It is broad in scope, no doubt, but so too is the scale of the alleged violations."
Uber and Lyft issued statements noting that the ruling doesn't take immediate effect and urging voters to approve Prop. 22. Lyft also said it also is considering appealing to the California Supreme Court.
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