California Supreme Court allows Uber, Lyft, and other companies to treat drivers as independent contractors

On July 25, 2024 local time, the California Supreme Court ruled that ride-hailing and delivery service companies such as Uber, Lyft, and DoorDash will be allowed to treat their drivers as independent contractors ( gig workers ). This has been welcomed by companies such as Uber and Lyft, but disappointing to labor groups.

Uber, Lyft, DoorDash (DASH) Prevail In California Prop 22 Gig-Worker Ruling - Bloomberg
https://www.bloomberg.com/news/articles/2024-07-25/uber-lyft-doordash-prevail-in-california-gig-worker-ruling

Uber, Lyft and Others Win California Ruling to Treat Drivers as Contractors - WSJ
https://www.wsj.com/business/uber-and-lyft-win-california-judgment-to-treat-drivers-as-contractors-e274cddf

Uber, Lyft, and DoorDash have finally won the Prop 22 gig worker battle - The Verge
https://www.theverge.com/2024/7/25/24206354/california-prop-22-uber-lyft-doordash-win

In August 2020, the California Supreme Court issued a preliminary injunction against Uber and Lyft requiring them to treat their drivers as employees rather than self-employed. This was in response to the implementation of California Assembly Bill 5 , commonly known as AB5, which established the standards for treating drivers as employees rather than self-employed.

Court orders Uber and Lyft to treat drivers as employees - GIGAZINE

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In response to this decision, companies such as Uber, Lyft, and DoorDash launched a campaign to pass California Proposition 22 of 2020 (Prop. 22) , which aims to deregulate AB5. The measure was passed in a referendum on November 3rd with 58.63% of the votes.

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However, Uber and Lyft drivers filed a lawsuit challenging Proposition 22. In 2021, the court ruled that 'Proposition 22 is unconstitutional,' but in 2023, the appeals court ruled that 'Proposition 22 is constitutional.' The case was brought to the California Supreme Court.

On July 25, 2024, the California Supreme Court ruled in favor of Proposition 22, allowing companies like Uber, Lyft, and DoorDash to continue treating their drivers as independent gig workers rather than as employees of their companies.

Proposition 22 requires companies to provide worker protections such as paying 120 percent of the minimum wage for every hour spent driving, providing health care benefits, and compensating for work-related injuries, but this is significantly narrower than the benefits that would be available to all workers if they were classified as employees.

Uber and Lyft issued statements welcoming the court's decision upholding Bill 22.

uber.com/newsroom/prop-22-upheld/
https://www.uber.com/newsroom/prop-22-upheld/

Prop. 22 upheld
https://www.lyft.com/blog/posts/prop-22-upheld

In a statement, Uber said, 'Drivers and couriers' freedom to work how they want, when they want, is now firmly enshrined in California law. This law puts an end to misguided attempts to force workers into employment that too many of them don't want.'

'We are thrilled that the California Supreme Court unanimously upheld the democratic will of the voters and ruled in a way that is right for California communities and our economy,' Lyft said in a statement.

Meanwhile, opponents of Proposition 22 have expressed disappointment. Lorena Gonzalez, president of the California Labor Federation, said in a statement, 'We are deeply disappointed that the Supreme Court has allowed tech companies to evade labor law, even though Proposition 22 contradicts the California Constitution. These companies are undermining our social contract, profiting from the inherent risks that come with the job, while exposing workers and Americans to them.'