California court ruling allows Uber, Lyft to classify drivers as independent contractors

Ride-sharing apps like Uber and Lyft can continue classifying their drivers as independent contractors, thanks to a Monday ruling from a California appeals court that reversed a lower-court decision barring them from the practice. 

The ruling comes after California voters in November 2020 approved Proposition 22, which OK’d drivers for ride-sharping and delivery apps to be classified as independent contractors.

In 2021, a California judge ruled the proposition unconstitutional, arguing that it infringed on the legislature’s power to set workplace standards. 

The state and the “Protect App-Based Drivers & Services” (PADS) coalition appealed that decision. Monday’s ruling comes down in their favor. 

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“We are pleased that the court upheld the democratic will of the voters and the fundamentals of Prop 22,” a spokesperson for Lyft said. “Prop 22 protects the independence drivers’ value and gives them new, historic benefits.” 

“After Prop 22 went into effect, more than 88% of California drivers surveyed said that it has been good for them. We are excited to continue operating our service with no changes.” 

Uber called Monday’s ruling “a victory for app-based workers and the millions of Californians who voted for Prop 22.” 

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“Across the state, drivers and couriers have said they are happy with Prop 22, which affords them new benefits while preserving the unique flexibility of app-based work,” Uber’s Chief Legal Officer, Tony West, said in a statement. “We’re pleased the Court respected the will of the people, and that Prop 22 will remain in place, preserving independence for drivers.” 

The PADS coalition called the ruling a “historic victory for the nearly 1.4 million drivers who rely on the independence and flexibility of app-based work to earn income, and for the integrity of California’s initiative system,” the coalition said. 

“The Appeals Court upheld the fundamental policy behind that measure – to protect the independent contractor status of app-based drivers in California, while providing drivers with new benefits.” 

The court’s decision was first reported by The Wall Street Journal.