California Judge Rules Uber, Lyft Drivers are Employees

Last Updated on August 15, 2020 by Mike Dean

A judge in the case has ordered ridesharing companies Uber and Lyft to treat California drivers as employees instead of independent contractors


With a lot of speculation happening all around, Uber and Lyft drivers have finally gained the status of being employees. A judge in California decided that Uber and Lyft must consider their drivers as workers in a staggering fundamental injunction, as issued on Monday evening. The judge said, “The order will provide steady incentives such as overtime, sick leaves, and reimbursement of certain expenses for the drivers who make up a large amount of their income only by freelancing as independent workers.”

The ruling was given by the judge of the San Francisco superior court, Ethan P. Schulman. But the order would not come into effect immediately. The order has stayed for ten days, but it allows Uber and Lyft a chance to bid the choice. Uber said that it wanted to document an emergency appeal as soon as possible to avoid the decision from going live.

Additionally, Uber and Lyft drivers are no longer considered independent contractors under California regulations and recognized as employees according to the California Public Utilities Commission.

Judges support the order

While Uber and Lyft are facing a situation of extreme dilemma, the judges stood strongly by the decision as an achievement in their battle to apply customary laborer protections to a quickly developing portion of the workforce. However, the Ridesharing companies have anyway condemned the choice, referring it takes steps to close them down during a pandemic prompted monetary downturn.

How will this benefit the workers?

State authorities have argued, “Uber and Lyft’s conduct harm to individuals other than drivers. Moreover, the Ridesharing companies don’t pay in the state’s unemployment protection subsidies that offer benefits to such individuals when they lose their positions. Uber and Lyft are facing an extreme constraint to adjust their plans of action on a fundamental level in California. In this state, the two organizations finally established and eventually flourished.”

This is the aftermath of categorizing the drivers as independently employed entities. Uber and Lyft have stated that the drivers are inclined towards the adaptability of functioning as independent workers. At the same time, labor unions and the authorities who were elected contradict this statement by saying that this denies them customary advantages like medical coverage and employees’ compensation.

The impact of this order

While this law will have a severe impact on many industries, organizations like Uber and Lyft will have to suffer the most. Hence, both Ridesharing companies have outrightly challenged the law in government court, where it endeavors to prevent it from coming into effect has failed until now. What’s more, they have vowed to spend about a hundred million dollars to help a ballot measure in November that would exclude them from the effect of the law, if the voters affirm it.

Attorney General Xavier Becerra, the California Attorney, and the city lawyers of Los Angeles, San Francisco, and San Diego sued both Uber and Lyft in May 2020. It contended that their drivers were wrongly categorized as independently employed entities when they ought to be employees under the state’s AB5 law that became effective on January first. He later documented a movement for a primary directive that could constrain the ride providing organizations to characterize drivers as employees right away. AB5, which came into law the previous September, reveres the alleged “ABC test” to decide whether somebody is a temporary worker or an employee.