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Home / Business / The court ordered Uber and Lyft to reclassify the driver as an employee in California

The court ordered Uber and Lyft to reclassify the driver as an employee in California



Companies will have 10 days before the order goes into effect to allow an appeal, according to a copy of the ruling from San Francisco Superior Court judge Ethan Schulman. Uber and Lyft now treat their drivers as independent contractors.

The growing legal pressure to reclassify their workers in the state comes at a time of uncertainty for both companies. Uber (UBER) and Elevator (ELEVATOR) continued to grapple with the pandemic, which has significantly reduced demand for businesses that book their core vehicles. Both companies have gone through layoffs and have long loss histories.

According to the court ruling, “now, when the Respondent̵

7;s ridership is at an all-time low, it may be the best time (or least) for the Respondent to change course Their business knowledge to comply with California law without causing large-scale adverse effects on their drivers. “

In response to the order, Lyft spokeswoman Julie Wood said, “The driver doesn’t want to be an employee, completely stops.”

“We will immediately appeal against this ruling and continue to fight for their independence. Ultimately, we believe the matter will be decided by California voters and they will side with the drivers. “Wood said in a statement to CNN Business.

An Uber representative did not immediately respond to a request for comment.

The order on Monday came after California Attorney General Xavier Becerra and a coalition of city attorneys filed a preliminary order in late June to force the two ride-hailing companies to comply with California law. called AB-5. The ban was part of a lawsuit filed in May accusing companies of misclassifying their workers in violation of the law.

Under laws in effect January 1, companies must prove the employee is not controlled by the company and perform work outside of the company’s usual business process to classify workers as home. independent contractors, not employees.

The California Labor Commissioner sued Uber and Lyft for alleged wage theft

The lawsuit alleges Uber and Lyft stripped workers of their protections, including minimum wages, overtime, paid sick leave, and unemployment insurance they would be entitled to as employees. Uber, Lyft, and DoorDash each dropped $ 30 million on the voting initiative, with additional support from Instacart and Postmate, which Uber recently agreed to buy back. If passed, it will waive them from AB-5, but provide the driver with some benefits.

On Monday, The New York Times published a notice from Uber CEO Dara Khosrowshahi asking states to pass new laws requiring contract economic companies to set up welfare funds to help workers. have cash to enjoy benefits like health insurance or paid vacation time. “Right now, Uber is ready to pay more to provide drivers with new benefits and protections,” he wrote. “But America needs to change the status quo to protect all workers, not just one type of job.”

The AB-5 law has long been seen as a potential threat to many contract economy firms such as Uber and Lyft, which have built their businesses largely by treating workers as home. independent contractors, not employees. In addition to not getting certain employee protections, drivers pay their own costs, including gas and car maintenance.

Last week, the California Labor Commissioner filed lawsuits against Uber and Lyft for alleged wage theft by misclassifying workers on their claims as independent contractors instead of employees.

“The majority of drivers want to work independently, and we have made significant changes to our app to make sure it’s still under California law,” an Uber spokesperson said in a statement. father last week. “When more than 3 million Californians are out of work, our elected leaders should focus on creating jobs, not trying to shut down the entire industry.”


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