On Monday, San Francisco County Superior Court Judge Ethan Schulman ruled that rideshare drivers in the state should be reclassified as employees, strengthening the AB 5 law passed last year.
Rideshare drivers ruled to be employees
Under Judge Schulman’s ruling, drivers for companies such as Lyft and Uber can no longer be classified as independent contractors, and will instead be employees with benefits such as health insurance and paid leave time.
“Were this reasoning to be accepted, the rapidly expanding majority of industries that rely heavily on technology could with impunity deprive legions of workers of the basic protections afforded to employees by state labor and employment laws,” said Judge Schulman in his ruling on California v. Lyft, Uber. “It bears emphasis that these harms are not mere abstractions; they represent real harms to real working people.”
Judge Schulman also denied a request from Uber and Lyft to delay the ruling to November, when a statewide vote over whether or not ride-sharing apps should be exempted from AB 5 will decide the rideshare companies ultimate independent contractor fate.
“Defendants are not entitled to an indefinite postponement of their day of reckoning,” said Judge Schulman of the request.
Supporters of AB 5 widely celebrated the move, including California Attorney General Xavier Becerra, whose upcoming lawsuit against the rideshare companies may be affected in his favor by the decision.
“The court has weighed in and agreed: Uber and Lyft need to put a stop to unlawful misclassification of their drivers while our litigation continues,” said Becerra in a statement on Monday. “Our state and workers shouldn’t have to foot the bill when big businesses try to skip out on their responsibilities. We’re going to keep working to make sure Uber and Lyft play by the rules.”
AB 5 author Assemblywoman Lorena Gonzalez (D-San Diego) also agreed, sending out a tweet in support of the ruling.
— Lorena (@LorenaSGonzalez) August 10, 2020
Rideshare companies mull appeal following Superior Court ruling
Rideshare companies vowed to appeal the ruling, noting that the majority of drivers want to remain independent and that forcing companies to recognize drivers as employees could possibly shut down the rideshare industry.
“The vast majority of drivers want to work independently, and we’ve already made significant changes to our app to ensure that remains the case under California law,” said Uber in a statement. “When over 3 million Californians are without a job, our elected leaders should be focused on creating work, not trying to shut down an entire industry during an economic depression.”
Lyft gave a similar statement, saying “Drivers do not want to be employees, full stop. We’ll immediately appeal this ruling and continue to fight for their independence. Ultimately, we believe this issue will be decided by California voters and that they will side with drivers.”
California and rideshare companies have fought back and forth several times since AB 5 was passed in late 2019, including a large still pending case over alleged labor right allegations, reclassification injunctions, and the ultimate voter decision this fall that would remove the main occupation under AB 5’s worker reclassification.
Many who are currently working or representing those around the employee reclassification issue at hand have said the issue has derailed away from it’s original purpose: helping employees in freelance industries.
“Everyone is fed up,” explained Lydia Pastore, a Los Angeles lawyer who has AB 5 freelancers as part of her clientele. “Most drivers just want to keep going, work their own hours, and do what they do. They don’t like becoming chips in a statewide political poker game.”
“They didn’t want to make it a giant issue, with some of the drivers working longer hours wanting some additional help, and others doing this on the side or off other work as additional pay without worrying about a big chunk of their pay going to benefits they never use.”
“But it’s turned into this, and many of my clients feel that [Assemblywoman] Gonzalez and the state just don’t care about them, and that they’re pushing their own agenda at their expense. A few of the people I represent immigrated to the US, and they’re equating all of this unknowing and having their fates being controlled by people they have no influence over or any way to get in touch with them as being stuck on the border in Immigration Worker’s hands. It’s that scary.”
Uber and Lyft have ten days to appeal before the ruling comes into effect, with an appeal likely to hold the Superior Court’s ruling. Both companies are expected to appeal some time this week.