California Court Rules for Uber, Lyft in Ride-Hailing Case

App-based ride hailing and delivery companies like Uber and Lyft can continue to treat their California drivers as independent contractors, a state appeals court ruled Monday, allowing the tech giants to bypass other state laws requiring worker protections and benefits.

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The ruling mostly upholds a voter-approved law, called Proposition 22, that said drivers for companies like Uber and Lyft are independent contractors and are not entitled to benefits like paid sick leave and unemployment insurance. A lower court ruling in 2021 had said Proposition 22 was illegal, but Monday’s ruling reversed that decision.

“Today’s ruling is a victory for app-based workers and the millions of Californians who voted for Prop 22,” said Tony West, Uber’s chief legal officer. ”We’re pleased that the court respected the will of the people.”

The ruling is a defeat for labor unions and their allies in the state Legislature who passed a law in 2019 requiring companies like Uber and Lyft to treat their drivers as employees.

“Today the Appeals Court chose to stand with powerful corporations over working people, allowing companies to buy their way out of our state’s labor laws and undermine our state constitution,” said Lorena Gonzalez Fletcher, leader of the California Labor Federation and a former state assemblywoman who authored the 2019 law. “Our system is broken. It would be an understatement to say we are disappointed by this decision.”

The ruling wasn’t a complete defeat for labor unions, as the court ruled the companies could not stop their drivers from joining a labor union and collectively bargain for better working conditions, said Mike Robinson, one of the drivers who filed the lawsuit challenging Proposition 22.

“Our right to join together and bargain collectively creates a clear path for drivers and delivery workers to hold giant gig corporations accountable,” he said. “But make no mistake, we still believe Prop 22 — in its entirety — is an unconstitutional attack on our basic rights.”

The California Legislature passed a law in 2019 that changed the rules of who is an employee and who is an independent contractor. It’s an important distinction for companies because employees are covered by a broad range of labor laws that guarantee them certain benefits while independent contractors are not.

While the law applied to lots of industries, it had the biggest impact on app-based ride hailing and delivery companies. Their business relies on contracting with people to use their own cars to give people rides and make deliveries. Under the 2019 law, companies would have to treat those drivers as employees and provide certain benefits that would greatly increase the businesses’ expenses.

In November 2020, voters agreed to exempt app-based ride hailing and delivery companies from the 2019 law by approving a ballot proposition. The proposition included “alternative benefits” for drivers, including a guaranteed minimum wage and subsidies for health insurance if they average 25 hours of work a week. Companies like Uber, Lyft and DoorDash spent $200 million on a campaign to make sure it would pass.

Three drivers and the Service Employees International Union sued, arguing the ballot proposition was illegal in part because it limited the state Legislature’s authority to change the law or pass laws about workers’ compensation programs. In 2021, a state judge agreed with them and ruled companies like Uber and Lyft were not exempt.

Monday, a state appeals court reversed that decision, allowing the companies to continue to treat their drivers as independent contractors.

The ruling might not be the final decision. The Service Employees International Union could still appeal the decision to the California Supreme Court, which could decide to hear the case.

Click here to read the full article in AP News


  1. We don’t need the state to change our personal freedoms into state run tyranny. Get out of our way!

  2. Unions have no place in our society any more. We have laws that protect workers. In this case, SEIU is trying to force a service into the union. They failed and will continue to fail. If people don’t want to be union, that is their right. They shouldn’t be forced into it, but they are.

    For example, Stater Bros in California is a union store. You *must* join the union in order to work there. The union signs you up for PAC contributions which they use to support those politicians that put in place the laws they want. (PAC stands for political action committee)

    This ruling is correct and lawful. It is not opinion. I applaud the judge for making the right decision. SEIU is extorting money from their members and telling them they represent them. They represent themselves and their jobs – not yours. I want to live long enough to see unions dissolved.

  3. This is an appropriate ruling but I doubt it will survive the liberal Cal Supreme Court. It is very difficult to understand why these ‘gig’ workers could not make their own choice whether to be an ’employee’ or an ‘independent contractor.’ Or why they could not allow those who only wanted to work under a certain number of hours, say for example, 25 hours per week, to be paid as independent contractors.
    On the other hand–these ride-share companies do have many, many rules and regulations they enforce on all drivers so they operate much more like an ’employer’ and thus should have the duty to provide the full benefits of employment including workers comp, medical insurance, etc.

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