In California, a law is confirmed that classifies Uber drivers as contractors rather than employees

A California appeals court on Monday upheld state law allowing Uber, Lyft and other app-based and on-demand companies to treat drivers as independent contractors rather than employees.

The ruling was a victory for ride-sharing companies and food delivery app platforms that backed a measure called Proposition 22 before it was passed in the state in 2020. “We’re glad the court respected the will of the people, and that Prop 22 will remain in place, preserving the independence of drivers,” Uber’s chief legal officer, Tony West, told AFP.

California’s voter-approved referendum that allows many gig workers to be treated as independent contractors was ruled unconstitutional in August 2021, sparking more legal battles over the controversial measure. Labor legislation strongly backed by Uber, Lyft and other app-based on-demand services effectively overturned a California law requiring them to reclassify their drivers and provide employee benefits.

A state judge later ruled that the law violated the California State Constitution because the power to legislate workers’ compensation rested with lawmakers. The appeals court, however, ruled that Proposition 22 “does not impinge on the legislature’s workers’ compensation authority.” The proposal remained in effect while the litigation unfolded.

Under this proposal, drivers remained independent contractors, but Uber and Lyft had to pay them a number of benefits, including a minimum wage, health care contribution and other forms of insurance. Labor groups that oppose the initiative have argued that it would erode workers’ rights and benefits.

The victory of California’s gig economy was expected to ripple across the United States, in a boon for app-based services while sparking fears that big companies will rewrite labor laws . Proposition 22 guarantees some support, such as a salary above the minimum wage and additional medical coverage, but it designates drivers as self-employed, which means they are not entitled to certain regular benefits.

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“We are all flabbergasted, angry and ready to keep fighting,” said Nicole Moore, Uber driver in Los Angeles, president of Rideshare Drivers United in California. Moore hoped the labor group that filed the Prop 22 legal challenge will appeal the latest ruling to the state Supreme Court.

Moore argued that the proposal has not benefited the majority of rideshare drivers in terms of compensation and medical benefits. “There’s nothing good about this law,” Moore told AFP. “We hope the (California) Supreme Court does the right thing.”

The World with AFP

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