Uber and Lyft ordered to reclassify California workers

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Posted by Legal Team On August 20, 2020

The two major ride-hailing services in the nation, Uber and Lyft, pretty much based their business model on the idea that drivers on their platforms are independent contractors. While that lowers the operating costs for Uber and Lyft, it makes their drivers ineligible for all of the usual benefits that go along with being someone’s employee, like workers’ compensation, medical benefits, liability coverage, sick leave and protections against discrimination and sexual harassment.

Well, California has long been pushing both companies to reclassify their drivers as employees. With the court’s latest ruling, time may be running out for the companies to comply.

A Superior Court judge has denied motions by the companies to delay the reclassification of their drivers as employees. If the judge’s order isn’t stayed by an appellate action, the changes will go into effect on Aug. 20.

The action against Uber and Lyft was brought in a lawsuit by California Attorney General Xavier Becerra and attorneys representing San Diego, San Francisco and Los Angeles. They have jointly sought to make the two companies comply with AB 5, which broadly redefined workers in the “gig” economy as employees, not independent contractors.

To avoid classifying gig workers as employees, companies have to show:

  • A worker is able to perform services without the company’s direction or control
  • The work being performed is not part of the company’s usual business activities
  • The work is part of the worker’s customary and independently established occupation or trade

The fight with Uber and Lyft is far from over — and it could end up changing the way both companies do business (if they do it at all) in the state. However, worker misclassification isn’t a new thing. Many workers are misclassified because it’s more convenient for their employers.

If you think your rights as an employee have been violated due to misclassification by your employer, it may be time to learn more. An experienced attorney can assist you.