Uber and Lyft need to stay in their lanes after a unanimous California appeals court ruling affirmed Thursday that the ride-sharing companies are unable to classify their drivers as independent workers.
The decision, upholding an August court ruling, puts more pressure on Uber and Lyft to pass Proposition 22, a California ballot measure that would make Uber and Lyft exempt from a state law that requires both companies to treat drivers as employees. It also would create minimum earnings guarantees for engaged time.
“Uber and Lyft have used their muscle and clout to resist treating their drivers as workers entitled to those paycheck and benefit protections,” California Attorney General Xavier Becerra said in a statement after Thursday’s appeals court ruling. “It’s time for Uber and Lyft to play by the rules.”
The ride-booking companies have time to wait for the vote because their lawyers can move along to the 60-day process of asking for a California Supreme Court review. The temporary reprieve also lasts another 30 days while the case returns to trial court.
Uber CEO Dara Khosrowshahi told CNN that 71% of Uber drivers do not want to be employees. “They love the control that they have,” Khosrowshahi told CNN. “If they work hard and do well, they make more. They make a trade-off between earnings and flexibility.”
Becerra noted that Uber and Lyft do not pay into unemployment benefit funds for workers, meaning taxpayers cover gig workers’ unemployment benefits.
The gig could be up if Prop 22 does not pass.