California Judge: Uber, Lyft Cannot Classify Their Drivers as Independent Contractors

In his ruling, the judge said that Uber and Lyft’s policies cause real, appreciable harm to workers.

A California judge has ordered rideshare companies Uber and Lyft to classify their drivers as employees rather than independent contractors.

According to National Public Radio, Superior Court Judge Ethan Schulman passed the ruling Monday. Should Schulman’s verdict survive Uber and Lyft’s inevitable appeals, it would have far-reaching consequences.

Uber, Lyft, and other tech companies reliant on gig workers have long sought to protect employees’ status as independent contractors. By framing workers as self-driven entrepreneurs, businesses can bypass state laws mandating employment insurance, base pay, and other benefits.

Schulman noted a particular irony in technology companies’ hiring philosophy: while they do not consider office workers independent contractors, they are willing to deny the benefits of traditional employment to the drivers responsible for the lion’s share of their profits.

In his ruling, Schulman said Uber and Lyft use a sort of “circular reasoning” to classify its tech workers as employees, while withholding the same status from drivers.

Rideshare companies have defended their employee classifications, saying that corporate focus is technology—not the actual provision of taxi services. Furthermore, Uber and Lyft have both maintained that the vast majority of their drivers prefer being categorized as independent contractors, since they can choose their working hours with minimal supervisor interference.

“Were this reasoning to be accepted, the rapidly expanding majority of industries that rely heavily on technology could with impunity deprive legions of workers the basic protections afforded by state labor and employment laws,” Schulman wrote.

However—as LegalReader’s reported before—recent changes to California law dictate that companies now evidence that their independent contractors are sufficiently free from corporate oversight. Perhaps more importantly, the same law also dictates that, in order for a worker to be considered an independent contractor, the work they perform must fall outside a business’s ordinary course of operations.

Schulman said that Uber and Lyft’s refusal to comply with this law exerts a definite, harmful impact upon workers, insofar as they are denied health care coverage, vacation time, and worker’s compensation.

“It bears emphasis that these harms are not mere abstractions,” Schulman wrote. “They represent real harms to working people.

“To state the obvious,” he continued, “drivers are central, not tangential, to Uber and Lyft’s entire ride-hailing business.”

Schulman’s ruling, adds NPR, has already won praise from California Attorney General Xavier Becerra, who has spearheaded numerous labor lawsuits against rideshare companies.

“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,” Becerra said. “Our state and our workers shouldn’t have to foot this 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.”

Sources

California Judge Orders Uber And Lyft To Consider All Drivers Employees

California judge rules Uber, Lyft drivers are employees

Uber and Lyft ordered by California judge to classify drivers as employees